From the Frontier Centre for Public Policy

By Pierre Gilbert

Ottawa has churches in its crosshairs. A federal fiscal squeeze could strip religious organizations of tax breaks, crippling Canada’s community backbone

Proposals to revoke charitable status for faith-based groups would devastate the community services thousands rely on

Canada’s churches, synagogues, temples, mosques and charities like the Salvation Army are at the heart of our communities, offering hope, support and services to thousands. But a storm is brewing in Ottawa that could strip these vital institutions of their charitable status, threatening their very survival—and much of our country’s social fabric.

The 2025 House of Commons Standing Committee on Finance, which makes recommendations to shape the federal budget, dropped a bombshell in its prebudget report, an influential document often used to set priorities for the year ahead. It included two recommendations that could hit religious organizations hard.

The first is that the government revoke the charitable status of pro-life groups. These agencies are being singled out because of the support they provide to pregnant women who do not wish to abort their children.

The second is that the “advancement of religion,” one of the four long-standing categories under which Canadian charities qualify for registration, be eliminated. The recommendation was based on a single proposal by the B.C. Humanist Association, a provincial nonprofit organization in British Columbia that represents atheists, humanists, agnostics and non-religious people.

If included in the next federal budget, these ideas would strip religious organizations across Canada of tax exemptions, the ability to issue donation receipts and, if provinces follow suit, property tax breaks.

Why target these groups?

Ottawa desperately needs the cash. The federal government is on a spending binge of gargantuan proportions with no end in sight. Canada’s balance sheet is drenched in red ink, with no credible plan to address the structural budget deficit, which the C.D. Howe Institute, a Toronto-based policy think tank, estimates will reach a record $92 billion this year. While the tax exemptions amount to only between $1.7 and $3.2 billion annually, the temptation to grab what it can from churches may prove irresistible.

But it’s not just about the dollars. Religious institutions have increasingly faced criticism from secular voices in Ottawa and academia. The Catholic Church, for example, is still facing harsh criticism over its role in Canada’s residential school system and over recent allegations of unmarked graves of Indigenous children at some schools.

As for Protestant and Evangelical churches, public perception casts these institutions as clashing with modern societal norms. Critics claim that churches opposing abortion or prevailing views on human sexuality should be compelled to align with government policies on these issues.

The message seems to be: shape up or ship out. This isn’t just a policy debate; it’s a cultural attack on institutions that have shaped Canada for generations.

Despite the criticism, there are compelling reasons to preserve the charitable status of religious organizations.

First, a recent study by Cardus, a Canadian faith-based think tank, shows that for every dollar of tax exemption, religious groups deliver $10 in community services.

Second, religious congregations offer substantial intangible benefits of immeasurable value. They foster vibrant communities where individuals find friendship, emotional support and spaces to explore questions of meaning and purpose. They also provide opportunities for people to experience a sense of transcendence and spiritual connection.

When the current focus on materialism comes to an end, as it must, many Canadians will turn to the church for guidance in addressing the most profound questions about human existence.

Ottawa needs to get its fiscal house in order, not raid ours. It’s time for Canadians to speak up. Write to your MP, attend community forums and demand that the charitable status for religious organizations be preserved. Doing so will ensure that churches and other places of worship continue to serve Canadians for generations.

Pierre Gilbert, PhD, is an emeritus associate professor at Canadian Mennonite University and a senior fellow at the Frontier Centre for Public Policy. He is the author of Revoking the Charitable Status for the Advancement of Religion: A Critical Assessment and God Never Meant for Us to Die (2020).