Should Churches Pay Property Tax in Ontario?

If we’re looking for new revenue streams to fund the construction of affordable housing in Ontario, tax the churches.

All real property (i.e. land) in Ontario is subject to assessment and taxation. Ontario’s Assessment Act (“Act”) provides exemptions from property tax for some philanthropic and charitable organizations, depending on how the property is used and occupied. According to the Act, land owned by a church or other religious organization is exempt from the application of property tax. A church or religious organization can further extend tax exemption to buildings which are vacant or unoccupied and buildings used as businesses.

The exemption for churches and other religious buildings is based on the premise that religious institutions operate in the public interest and fulfill a public good. Indeed, many religious institutions contribute meaningfully to the community in many ways, including the sponsorship of refugees, providing children’s daycare, or by feeding the hungry. That said, charitable activities are typically the secondary purpose of religious institutions, following proselytization and growth of the congregation.

This leads to the question: should all religious buildings in Ontario automatically benefit from property tax exemption, or should they be expected to meet the same requirements as other charitable entities and non-profits?

Unlike a local library or a hospital, the benefit to the community from a church or other religious building may not be felt universally. Whereas in the past local churches may have formed the backbone of many communities and been instrumental in the provision of certain social services, times have since changed. In fact, many who have experienced discrimination or other serious harm at the hands of a religious institution may avoid or feel unwelcome in religious-affiliated spaces. Recall, for instance, the role that Christian churches had in Canada’s genocidal residential school system.

Unlike the property tax exemption for non-profits, churches need not demonstrate charitable activities to qualify for exemption. Moreover, this tax exemption works to the benefit of small and large churches alike. It is not just local, deserving community churches who benefit from the exemption, but institutions capable of constructing multimillion dollar megachurches. For example, fundraising efforts for Catholic cathedrals and other buildings across Canada reached nearly $300 million in 2021, according to data gathered by CBC News. Even so, the cash flow constricts when it comes to recompensing victims of residential schools.

It’s time for the provincial government to take matters into its own hands. I do not suggest that the province do away with property tax exemptions for religious buildings, but that religious organizations be required to justify an exemption, as is the case with other charitable entities.