Clergy residence deduction cost $1 billion over last decade

In its latest report, the BC Humanist Association (BCHA) has estimated that the clergy residence deduction has cost the Canadian government over $1 billion over the past decade as individual religious officials are able to reduce their taxes by one-third.

Reviewing estimates from the Ministry of Finance, the BCHA found that in 2021 the deduction is predicted to cost the federal treasury $105 million in foregone revenue. Between 2011 and 2021, the Government of Canada has lost out on $1.035 billion.

BCHA Policy Research and lead author on the report Adriana Thom said, "This $105 million represents funds that the government could have been collecting, funds that could have been used to support or expand public expenditures, such as the COVID-19 Emergency Food Security Fund, which costs roughly $100 million."

Each year the deduction is claimed by fewer than 30,000 priests, ministers and other religious clergy. This allows them to deduct their housing costs from their net income on their income tax returns. For the median religious official, this represents a reduction of $1,829 in 2015.

Through tax collection agreements, provincial income taxes in every province except Quebec are also reduced by the clergy residence deduction. This reduces the median clergy member's taxes from $2,150 in New Brunswick to $5,155 in the Northwest Territories.

Vancouver's highest Anglican paid priest could reduce their taxes by $6,276.

"Through the clergy residence deduction, the government is explicitly supporting religion over non-religion, a clear violation of the government’s duty of religious neutrality," said report co-author and BCHA Research Coordinator Dr Teale Phelps Bondaroff.

"If the goal of the deduction is to support those who work from home, there are other deductions that do not specifically promote religion over non-religion, and one specific religion, the majoritarian religion, over others. It's time for this antiquated deduction to be abolished."

MPs vociferously defended the clergy residence deduction during committee considerations when this deduction was considered in 1949. Gordon Graydon said Canadians "would regard it as a privilege and an honour to bear any extra burden of taxation" to support the religious leadership, while Thomas Langton Church called for it to "be liberally interpreted to include all the Christian clergy."

"If we are looking to venerate workers for their labours, then where are the deductions for the healthcare workers, the grocery store clerks and the delivery drivers who kept this country running during the pandemic?" asked BCHA Executive Director and report co-author Ian Bushfield.

"Instead we have a system that subsidizes priests on the backs of Canadian workers."

Link to share the report

Image credit: flickr/Obert Mandondo CC BY-NC-SA 2.0

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