Charitable giving on the wane in Atlantic Canada

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Appeared in the Halifax Chronicle Herald, December 18, 2023
Charitable giving on the wane in Atlantic Canada

The holiday season is a time of giving and every year many Atlantic Canadians spend their time and money giving to charitable causes. As the cost of living rises, charitable donations are critical in assisting vulnerable individuals and families obtain basic necessities such as food, housing and clothing.

However, according to a new study published by the Fraser Institute, both the percentage of tax-filers donating and the share of income donated to charity are on the decline over the last two decades in Atlantic Canada and across the country.

According to data from Statistics Canada from 2021 (the latest year of available data), the percentage of tax-filers who gave to registered charities in Atlantic Canada ranged from a low of 15.4 per cent of tax-filers in New Brunswick to a high of 17.6 per-cent of tax-filers in Prince Edward Island. Residents in P.E.I. donated the highest share of income to registered charities (0.48 per cent) among the Atlantic provinces whereas Newfoundlers and Labradorians donated the smallest share (0.32 per cent).

Notably, all four provinces have experienced long-term declines on this measure. Between 2011 and 2021, the percentage of tax-filers giving to charity decreased by 25.2 per cent in Newfoundland and Labrador, 26.0 per cent in New Brunswick, 27.1 per cent in Nova Scotia and 29.6 per cent in P.E.I.

For Canada as a whole, from 2011 to 2021, the percentage of tax-filers donating to charities dropped every year, from 23.0 per cent to 17.7 per cent. And the percentage of income donated to charity dropped from 0.59 per cent to 0.55 per cent.

While this trend persists across the country, the Atlantic provinces tend to be at or near the bottom of most measures of charitable giving. Why?

The determinants of charitable giving are complicated, but economic research reveals two possible explanations. First, Atlantic Canada has relatively fewer high-income earners than other provinces and high-income earners tend to give disproportionately more to registered charities. Second, high marginal tax rates on personal income can affect rates of charitable giving, and the four Atlantic provinces have some of the highest rates in North America.

Admittedly, generosity is a difficult concept to measure. The data reported here are gleaned from tax-filing data from the provinces, and many people contribute their time and money without reporting the contribution on a tax return. However, the data reveal a clear trend toward less giving both in the Atlantic region and across the country. As a result, charities will likely have less resources to pursue their respective missions. Cost of living concerns loom large for many families, so let’s hope these troubling trends turn around in the new year and beyond.

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