Donations among Canadians continues to fall. Photo Credit: iStock.
At this time of year, many Canadians look at their charitable activities and consider making some donations to worthy organizations. The looming year-end is also a consideration if people are looking to realize some tax deductions in the current calendar year. A recent study by the Fraser Institute looked at how much Canadians were donating to charities measured by a Generosity Index, and found this index fell in 2022 to the lowest level in 20 years.
Overall, the proportion of Canadians filing charitable deductions on their tax return fell from 22.4 per cent in 2012 to 17.1 per cent in 2022. Another measure, the amount of aggregate income donated to charities, also fell somewhat over this period. Among the provinces, Manitobans were the most generous, with 19.3 per cent supporting charities. Ontario and Quebec were in second and third place, with 17.6 and 17.4 per cent respectively. The lowest proportion of charity donors was found in New Brunswick at 14.7 per cent.
Although there were differences in charitable giving among the provinces, the extent of charitable giving fell in all regions over the ten-year period studied. Declines in support to charities were largest in Saskatchewan, P.E.I. and Alberta.
Compared to the U.S., Canadians are not as generous as their American cousins. Although data are not available for the U.S. to compare to the Generosity Index, tax information shows that in 2021, American contributed 1.22 per cent of their total income to charities – more than twice the 0.55 per cent donated by Canadians in the same year.
As to the question of why charitable donation activity varies among regions and countries, other studies have shown a number of possible reasons. For example, some obvious incentives include income levels, tax deductions available, demographics such as population age and level of education, religious affiliation volunteer activity. The state of the economy and people’s confidence levels in government are also important considerations as donations are more likely to be held back if uncertainty prevails. The differences between donations to charities in the U.S. compared to Canada could easily be explained by some of these factors.
Despite recent trends, Canadians really shouldn’t be called a nation of Scrooges. Studies have shown over the years that bigger government levying higher taxes is typically accompanied by a reduction in generosity to charity. This is a pretty logical finding as higher rates of taxation leave less disposable income in people’s hands, necessitating a reduction in spending on many things, including charitable donations. As well, a growing government gives the impression that the public sector is stepping into areas where private sector charities previously acted, which will promote the thought that private donations are not needed as government is taking care of the problem with the increased taxes levied. Considering the massive increase in the federal government under the Trudeau administration and the increases in various forms of taxation, it shouldn’t come as a major shock that charitable giving has suffered.
Sadly, history shows that government never does a particularly good job at this, spending more money than is needed via an expensive bureaucracy with massive overhead. Government programs also are often driven by partisan political considerations such as “is the service being provided in a riding that supports our political party?” rather than addressing those most in need. With some exceptions, private charities tend to be more effective and efficient at delivering the needed services than government.
Another factor in Canada worth considering is the recent explosion in the number of organizations which have been given charitable status while appearing to really be organizations with objectives that are more political than charitable. Many environmental charities would fit this description, as would others promoting progressive outcomes involving gender identity, various racial theories and other leftist causes. The WE charity and the scandals surrounding it is a good example. The charitable activities of these groups are questionable as often it seems their goals are merely to prop up sympathetic governments and promote a particular political cause as opposed to actually helping people.
Under former prime minister Stephen Harper, a major audit of charities’ political activities was underway to determine which were legitimate and which should be stripped of their valuable charitable status, but this review was cancelled when Prime Minister Justin Trudeau took over. It used to be that if an organization spent more than 10 per cent of their resources on political activities, they would be under scrutiny. Trudeau removed this restriction. Unfortunately, classifying such questionable groups as charities has likely undermined Canadians’ confidence in charities generally and reduced the desire to donate.
That being said, there are many worthwhile charities that deserve our support, especially in our current unfortunate economic circumstances and at this time of year. A little research will usually show which charitable organizations are legitimate and deserve support and which are questionable.
Speaking of this time of year, this author would like to take this opportunity to wish all Niagara Independent readers a very Merry Christmas, Happy Holidays and a wonderful 2025. We may have our challenges in Canada at present, but we remain a country with massive unrealized potential, and it appears that the next year will bring the changes we sorely need. It’s about time.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
