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.