[Canadian Catholic News] – A new report from the Frontier Centre for Public Policy warns that removing the “advancement of religion” from Canada’s list of recognized charitable purposes could have far-reaching social and financial consequences for churches and other faith-based organizations.
The 38-page report, Revoking the Charitable Status for the Advancement of Religion: A Critical Assessment, by senior fellow Pierre Gilbert, responds to a December 2024 recommendation from the House of Commons Standing Committee on Finance to amend the Income Tax Act and eliminate the long-standing charitable category.
If adopted, the recommendation in the committee’s pre-budget report could strip churches, mosques, temples, and synagogues of charitable status — ending their ability to issue tax-deductible receipts and, in many cases, their income-tax exemptions. Gilbert warns that the change could also trigger a one-time revocation tax equal to most of their assets, effectively “wiping out what they own.”
“The committee’s recommendation, driven by lobbying from the BC Humanist Association, represents a direct threat to religious freedom and the vital role faith communities play in Canadian society,” Gilbert said.
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He cites research estimating that religious organizations contribute about $16.5 billion annually to Canada through education, social services, community programs, and cultural activities. The report argues that revoking charitable status would be “fiscally shortsighted and socially destructive.”
Gilbert traces charitable status for religion to English common law and the 1601 Statute of Charitable Uses, noting that Canada inherited this framework. He outlines how churches historically provided education, health care, and welfare long before the modern state assumed those roles, and says the decline of church influence has paralleled the rise of secularism in public life.
The report describes the Finance Committee’s proposal as part of a broader movement among secular and humanist groups seeking to eliminate tax benefits for religious institutions. It notes that the BC Humanist Association, which supports ending property-tax exemptions for places of worship, is itself a registered charity.
Gilbert estimates that eliminating charitable status for religion would yield between $1.7 billion and $3.2 billion annually in federal revenue but warns this “low-hanging fruit” would come at the cost of social cohesion and community support networks.
He argues that congregations’ economic “halo effect” — the measurable community benefit of their programs and facilities — outweighs foregone tax revenue roughly tenfold. Faith groups also risk a 100 per cent revocation tax under existing Income Tax Act provisions unless their assets are transferred to another registered charity within a year.
Rev. Andrew Bennett, director of faith community engagement at Cardus, echoed those warnings in a Sept. 11 Financial Post commentary that begins, “When Finance Minister François-Philippe Champagne introduces his federal budget this fall, there’s at least one item he should leave out: eliminating the ‘advancement of religion’ as a charitable purpose.”
Bennett noted that about 38 per cent of Canadian charities are registered under the advancement-of-religion category and that removing it would have “significant sector-wide implications.”
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“Atheist activists have long sought to eliminate charities’ ability to issue tax receipts to donors if their primary purpose is the advancement of religion,” Bennett wrote. “Minister Champagne should reject the idea explicitly.”
Faith communities, he said, clearly serve the common good — providing both spiritual and material support “from birth to death.”
Research cited by Cardus links participation in religious communities with lower social isolation, reduced mortality, and improved quality of life.
“Faith-based charities have never been the initiative of the state, but rather the initiative of religious people who sought to improve their and their neighbours’ lives,” Bennett wrote. “These Canadians do not undertake this work for the good of their own faith group, but for the good of all.”
He added that Canada’s intricate network of faith-based charities could never be replaced by government. “The state could not fill that void, given the breadth and depth of these charities’ activities, nor could it do so as efficiently and effectively as these charities do,” he said.
“For the good of all Canadians,” he said, “the advancement of religion should remain a charitable purpose.”
The Frontier Centre report is urging churches to prepare for potential legislative changes by educating members, engaging in advocacy, and reaffirming their public mission. It recommends collaboration with organizations such as the Evangelical Fellowship of Canada, the Canadian Centre for Christian Charities, and the Christian Legal Fellowship to defend the current legal framework.
Gilbert said churches must “reclaim their prophetic mission” and respond boldly to cultural and political challenges. “Only by embracing such audacious action,” he writes, “can the church restore its status as an important and relevant institution within Canadian society.”
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