As Ottawa's social benefit outlays doubled since 1961, the share of Canadians donating to registered charities has fallen by nearly a third
As government social spending has more than doubled as a share of Canada's economy over the past six decades, private charitable giving has moved in the opposite direction, according to new research.
The Fraser Institute study, authored by Sandra J. Peart, Dean of the Jepson School of Leadership Studies at the University of Richmond and a Fraser Institute senior fellow, examines federal, provincial, and local social benefit transfers to households from 1961 through 2025, alongside Canada Revenue Agency and Statistics Canada data on individual charitable donations over the same period.
While Peart stops short of claiming causality, the parallel trends she documents carry practical implications for financial advisors whose clients integrate philanthropy into their wealth plans.
Spending up, donations down
According to the study, social benefit spending as a share of GDP roughly doubled between 1961 and 2025, rising from 4.8 per cent to well over 9 per cent, according to Statistics Canada's national accounts data (Table 36-10-0477-01). On a per-capita basis, adjusted for inflation to 2025 dollars, spending climbed from $1,149 to $7,374 over the same period; a real-terms increase of more than 600 per cent.
Private giving moved in the opposite direction. The percentage of Canadian taxpayers who claimed charitable donations on their tax returns fell by nearly a third, from 24.5 per cent in 1961 to 16.8 per cent in 2023, based on CRA and Statistics Canada T1 return data.
The share of disposable income allocated to registered charities also declined materially over the same stretch, from 1.60 per cent in 1961 to 0.80 per cent in 2023, despite a series of legislative changes since the 1990s that made tax treatment of charitable gifts increasingly favourable.
That last point matters. Canada has added at least 20 tax incentives to encourage charitable giving since 1996, including enhanced credits for larger donations and in-kind gifts of appreciated securities. The fact that participation rates continued to fall even as these incentives were introduced suggests the drag on private giving goes beyond tax mechanics.
What crowding out means for advisors
The study describes two pathways through which expanded public spending may suppress private donations. The first is straightforward: higher taxes reduce the discretionary income available for charitable acts.
The second is more behavioural; taxpayers may simply feel less personally obligated to support those in need when they believe government programmes already cover that role.
Advisors who have integrated philanthropic planning into client conversations increasingly report that charitable intent is alive but concentrated.
As Danielle Robinson, National Director, Philanthropic Advisory Services at BMO Private Wealth, noted in a December 2025 WP interview, high-net-worth Canadians have made donating a more proactive and planned element of their financial lives, even as broader participation rates have declined.
That concentration at the top of the wealth spectrum is itself an advisory opportunity.
Donor-advised funds often achieving greater charitable impact for the same after-tax cost. Advisors interested in this area can explore how donor-advised funds can support high-net-worth client relationships as part of a comprehensive planning approach.
Limits of the analysis
Peart acknowledges that the correlation between rising government outlays and falling private donations is not, by itself, proof of causation. Several alternative explanations are plausible. The decline in religious affiliation in Canada over the same period may independently explain some of the drop in donor participation, given the historical link between faith communities and charitable giving. Canadians may also have redirected giving toward informal family support or non-registered organisations that fall outside the CRA data.
What the study cannot capture is the qualitative dimension, whether Canadians feel less compelled to give because they trust the state to meet social needs, or whether broader financial anxieties, including concerns about retirement savings and cost of living, are crowding out discretionary giving independent of government policy.
Understanding clients' personal motivations for giving, or not giving, requires the kind of conversation that a skilled advisor is well placed to have.
The broader planning conversation
The Fraser Institute study arrives at a moment when Canadian advisors are being asked to broaden the scope of what comprehensive planning looks like.
Access to professional financial guidance is itself a dimension of the issue: FP Canada and the Institute of Financial Planning jointly launched the Canadian Foundation for Financial Planning in late 2024, targeting financially vulnerable Canadians who may lack access to the kind of structured advice that helps them make intentional decisions about giving, saving, and planning for the future.
The full study, Whose Job Is It to Care for the Poor? Public Support, Private Charity, and Crowding Out in Canada Since 1960, is available at the Fraser Institute website.
