By Steve Weatherbe

ONE of the holdovers from the days of state churches, which even the most ardent Protestant is happy to accept, is the property tax exemption for places of worship. But some people are not so happy with that tradition.

The Victoria Secular Humanist Association went to City Hall recently to begin dismantling the exemption. They did not succeed; but they aren’t giving up. At least one Christian observer thinks churches will have to show their usefulness to society if they hope to retain the privilege.

At issue are not the provincially-mandated exemptions for the land parcels on which places of worship sit, but the so-called ‘permissive’ exemptions which municipalities choose to grant to attached land beyond the actual churches.

The Victoria secularists did not ask city council to cancel this second class of exemptions outright – but, as group representative Jill Stainforth told BC Christian News, rather to “require disclosure of the amount of money raised . . . such as [by] renting out the halls and grounds and running thrift shops. We asked that organizations disclose what they spend the money on, and where.”

Money spent on feeding the local poor would be justified, said Stainforth, “but sending funds overseas for missionary work should not be subsidized by local taxpayers.”

The province automatically exempts both places of worship and charities.

 Not all B.C. municipalities exercise the option to exempt the attached properties.

The secularists also asked the city to require that all groups receiving the exemption be “in full compliance with the Canadian Charter of Rights and Freedoms.”

This could possibly open the door to cases involving churches that condemn homosexuality, or allow such doctrines to colour their hiring practices

However, the committee of Victoria city council that heard Stainforth’s submission wasn’t prepared to vet churches on each dollar they raise or spend. City staff calculate the amount the city foregoes with its discretionary tax exemption for churches is just $300,000. This is not only far less than what it loses to the exemption for other kinds of charities (about $1.6 million), but also less than it would cost to administer the collection of a tax.  “We might be trying to count angels on the head of a pin,” commented councillor John Luton.

Committee chair, councilor Geoff Young, told BCCN he was sympathetic to the idea of charities and churches paying property tax. “I’m inclined to the view that everyone should pay rather than that some shouldn’t pay, because everyone benefits from the services the tax pays for – the police, the fire department. When these groups are exempted, others have to pay more.”

But he agrees the city does not want to be in the business of assessing the worthiness of individual organizations or individual parcels of land. As for Stainforth’s example of missionary activities being distinguished for tax purposes from support for the poor locally, Young commented: “Every few years we review the overall policy.”

As far as he knows, city council has never considered revoking its tax exemption. It would generate a lot of opposition from the organizations affected, and their supporters.

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The lot that a church sits on is automatically exempted from the property tax by provincial law – a tradition common in other provinces, said Brian Hawkins of the B.C. Assessment Authority (BCAA). But if the church has purchased adjoining properties for halls or parking lots, this land may be taxed at the discretion of municipalities. In B.C., some do tax – such as Sidney, just north of Victoria; but Victoria issues a blanket exemption for these additional properties.

Hawkins said the BCAA can remove the provincial exemption if a church does something to disqualify itself – for example, by losing its Revenue Canada charity registration.

In 1981, it wouldn’t exempt a Pentecostal summer camp at Nanoose Bay –  because the camp benefited only a few, not the general public in the local tax district. But the B.C. Supreme Court overruled it, arguing that the benefit to society as a whole could be indirect, through the benefits are given directly to a few. It issued no written explanation for this judgment, perhaps because it seemed self-evident in 1981.

But not in 2005. This time the Supreme Court affirmed the BCAA’s ruling that a second Christian summer camp operated by Young Life in Jervis Inlet should lose its tax exemption. The court ruled that it was neither a place of worship nor a general benefit to society in the local district. What’s more, the judge did not find evangelization of youth a public good in itself, and noted that few of the campers were locals.

John Stackhouse, professor of theology and culture at Regent College in Vancouver, said the secularist challenge to the tax exemption cannot be ignored. “In our pluralist society, if religious organizations want tax breaks they need to demonstrate their public utility – that they are more than just a club. We can no longer rely on past privileges.”

He believes churches can make the necessary argument. He cited the case of Tenth Avenue Church in Vancouver, which defended itself against city hall’s demand that it apply for a social service permit for its ministry to the poor, on the grounds that this work was integral to its existence as a church.

Don Hutchinson, director of the Evangelical Fellowship of Canada’s Centre of Faith and Public Life in Canada, said part of the problem is that the positive contributions of religious people and institutions in the past – such as the creation of schools, hospitals and social welfare organizations – are often ignored; while negative aspects, such as residential schools, are the focus of news media attention.

As well, he noted, “when religious people do good works they aren’t good at beating their own drum about it, because humility is part of our ethic.”

September 2009