St. Michael's Cathedral Basilica in Toronto, Ont., on Thursday, August 5, 2021.Tijana Martin/The Globe and Mail
Investigation • The Catholic Church’s assets and residential-school reparations
It’s an age-old question: How rich is the Catholic Church?
The church, which ran most residential schools in Canada, faces a reckoning after the recent discoveries of more than 1,200 probable unmarked graves at former school sites across the country.
The discoveries have led to renewed calls for financial reparations and other atonements.
But in 2016, after a failed effort to raise $25-million as part of a legal settlement for abuses at residential schools, a lawyer for various Catholic entities told The Globe and Mail many of the church organizations were near bankruptcy.
Given this response and growing calls for action, Globe reporters set out to unravel the church’s finances.
Tallying the church’s money isn’t easy: In Canada, Catholic entities are decentralized, meaning no single authority or organization handles church assets. Church organizations are incorporated and run independently, and many parishes operate under the oversight of a regional diocese.
The Globe first considered diving into just the assets of Canada’s largest dioceses, such as those of Toronto, Vancouver and Montreal. But this would provide an incomplete picture of such a vast, sprawling organization.
So we considered how churches and religious organizations in Canada are structured. Given that they rely in large part on donations, most are charities, meaning they are registered federally with the Canada Revenue Agency (CRA) and are required to file a summary of their financial position each year in a form known as the T3010 Registered Charity Information Return.
We requested 2019 T3010 data for all registered Roman Catholic religious organizations. That dataset listed more than 3,000 organizations – mostly Catholic parishes and dioceses.
The Globe’s initial analysis focused on summarizing Canada-wide revenue, property and net assets. But as the analysis became more detailed, it became clear we needed the help of experts in charity finance.
We turned to Charity Intelligence Canada, a charity that provides analysis and ratings on the finances and transparency of the charitable sector. Charity Intelligence reanalyzed The Globe’s data to arrive at a picture of the Roman Catholic Church’s finances in Canada.
Relying on T3010 data has some drawbacks. For one, CRA did not guarantee the accuracy or completeness of the filings.
Since there was no way to filter specifically for Catholic monasteries and nunneries, organizations with sizable assets that are in a different category in CRA’s system, those were excluded.
Charity Intelligence filtered the data further, limiting the analysis to organizations reporting the long-form version of the T3010′s financial statements, known as Schedule 6. Long-form reports are required only for charities that meet certain minimum financial thresholds. Charity Intelligence also removed orthodox churches that had erroneously reported themselves as Roman Catholic.
Lastly, Charity Intelligence summarized the CRA filings into categories commonly seen on the financial statements for public companies.
The Globe’s accompanying story represents an overall picture of the Catholic Church’s finances in Canada.
Charity Intelligence identified 3,446 Catholic organizations, which received a combined $886-million in donations in 2019. After accounting for revenue and expenditures, the organizations saw a profit of $110-million.
Their assets totalled $5.2-billion, with $1.7-billion from cash and investments and $3.3-billion from property. Including liabilities, the Catholic Church’s combined net assets amounted to nearly $4.1-billion.
Roman Catholic Church in Canada
A financial consolidation of 3,446 Catholic
registered charities for 2019. All figures are
in millions of dollars.
REVENUES
DONATIONS
Donations tax receipted
601
Grants from Canadian foundations
106
Other donations not tax receipted,
like collection plate
179
Total donations
886
GOVERNMENT FUNDING
Federal government
3
Provincial governments
18
Municipal governments
2
Total government funding
22
INTEREST AND INVESTMENT INCOME
95
RENTAL INCOME
48
OTHER REVENUES
Net proceeds from property sales
39
Membership dues and association fees
11
Sale of products and services*
113
Other revenues
305
Total other revenues
468
1,519
TOTAL REVENUES
*Candles, mass intentions, religious services, etc.
SPENDING
Religious services and ministry
943
Grants to other charities
129
Management and administration
152
Fundraising
22
Other and unallocated spending
163
TOTAL SPENDING
1,409
SURPLUS OR ‘NET PROFIT’
110
BALANCE SHEET
ASSETS
Cash
490
Investments
1,212
Property
3,297
Other assets
179
Total assets
5,178
LIABILITIES
Deferred donations
124
Other liabilities owed to
non-related parties
961
Total liabilities
1,085
NET ASSETS
4,093
THE GLOBE AND MAIL, SOURCE:
CHARITY INTELLIGENCE CANADA ANALYSIS
OF CANADA REVENUE AGENCY FILINGS
Roman Catholic Church in Canada
A financial consolidation of 3,446 Catholic registered
charities for 2019. All figures are in millions of dollars.
REVENUES
DONATIONS
Donations tax receipted
601
Grants from Canadian foundations
106
Other donations not tax receipted,
like collection plate
179
Total donations
886
GOVERNMENT FUNDING
Federal government
3
Provincial governments
18
Municipal governments
2
Total government funding
22
INTEREST AND INVESTMENT INCOME
95
RENTAL INCOME
48
OTHER REVENUES
Net proceeds from property sales
39
Membership dues and association fees
11
Sale of products and services*
113
Other revenues
305
Total other revenues
468
1,519
TOTAL REVENUES
*Candles, mass intentions, religious services, etc.
SPENDING
Religious services and ministry
943
Grants to other charities
129
Management and administration
152
Fundraising
22
Other and unallocated spending
163
TOTAL SPENDING
1,409
SURPLUS OR ‘NET PROFIT’
110
BALANCE SHEET
ASSETS
Cash
490
Investments
1,212
Property
3,297
Other assets
179
Total assets
5,178
LIABILITIES
Deferred donations
124
Other liabilities owed to non-related parties
961
Total liabilities
1,085
NET ASSETS
4,093
THE GLOBE AND MAIL, SOURCE: CHARITY INTELLIGENCE CANADA
ANALYSIS OF CANADA REVENUE AGENCY FILINGS
Roman Catholic Church in Canada
A financial consolidation of 3,446 Catholic registered charities for 2019.
All figures are in millions of dollars.
REVENUES
DONATIONS
Donations tax receipted
601
Grants from Canadian foundations
106
Other donations not tax receipted, like collection plate
179
Total donations
886
GOVERNMENT FUNDING
Federal government
3
Provincial governments
18
Municipal governments
2
Total government funding
22
INTEREST AND INVESTMENT INCOME
95
RENTAL INCOME
48
OTHER REVENUES
Net proceeds from property sales
39
Membership dues and association fees
11
Sale of products and services*
113
Other revenues
305
Total other revenues
468
1,519
TOTAL REVENUES
*Candles, mass intentions, religious services, etc.
SPENDING
Religious services and ministry
943
Grants to other charities
129
Management and administration
152
Fundraising
22
Other and unallocated spending
163
TOTAL SPENDING
1,409
SURPLUS OR ‘NET PROFIT’
110
BALANCE SHEET
ASSETS
Cash
490
Investments
1,212
Property
3,297
Other assets
179
Total assets
5,178
LIABILITIES
Deferred donations
124
Other liabilities owed to non-related parties
961
Total liabilities
1,085
NET ASSETS
4,093
THE GLOBE AND MAIL, SOURCE: CHARITY INTELLIGENCE CANADA
ANALYSIS OF CANADA REVENUE AGENCY FILINGS
But beyond the fact that the analysis already excludes many Catholic organizations, there are also issues with estimating the value of the church’s property.
General accounting practice is to record property as a capital asset; it is then depreciated (or discounted in value) over its “useful life” – often 30 to 40 years. In other words, an organization starting with a $10-million property and a useful life of 30 years will record its property as decreasing in value each year until it reaches zero.
But church properties are unusual. Some exist for hundreds of years, most are in continuous use, and virtually all are repaired and renovated over and over – extending their useful life indefinitely.
This means some churches may report a depreciated value for their property, or report zero assets. In fact, the CRA data obtained by The Globe found seven Catholic organizations reporting $1 in property assets. (It isn’t clear whether these properties have depreciated to a nominal figure, or whether the organizations arrived at that value through other means.)
In one case, the challenge of valuing church properties has led to an altogether different approach.
In 2019, the Archdiocese of Toronto reported $2 in property assets, and has done so in all but one year since 2010, according to the website charitydata.ca.
The archdiocese’s 2020 audited financial statements, like those of other charities, are publicly available upon request to the CRA. They showed that the organization reported $940-million in property assets, a discrepancy of nearly $1-billion.
Questions remain even for parishes reporting larger property values. Churches are specialized buildings lacking accoutrements would-be purchasers expect, meaning that regular methods for estimating market value may not apply. Many of those constructed decades or even a century ago sit on what is now prime real estate.
In other words: Until a church property is sold, its actual worth is hard to pin down.
According to Kate Bahen, Charity Intelligence’s managing director, the incomplete picture of Catholic organizations’ charity filings is a symptom of the federal government’s lax transparency rules.
“There is a national crisis in the transparency of charities in Canada,” she says.
During its reporting, The Globe asked the CRA for the financial statements of several Catholic charities. Many of the files provided, including those of the Archdiocese of Toronto, were partly redacted. The Archdiocese of Vancouver’s financial statements were two pages with no indication that they were audited.
“Is it any wonder that some religious organizations are not financially transparent?” Ms. Bahen says. “When you actually take the time to find their audited financial statements, you see all of these irregularities.”
Canadians should be able to hold charities accountable because they receive tax benefits and donations from the public, Ms. Bahen continues. “We have a right to know how charities spend our money.”
In England and Wales, charities must attach their audited financial statements to their annual filings, Ms. Bahen says, and those statements are posted online.
“The charitable sector is supported by all Canadian taxpayers,” CRA spokesperson Sylvie Branch said in an e-mailed statement. “For this reason, the CRA is committed to enhancing the transparency and accountability of charities by providing relevant information about charities to the public at large.” The CRA makes public a list of all charities, along with their financial filings to the federal department, she said.
When the Indian Residential School Settlement Agreement was announced in 2006, dozens of Catholic entities agreed to pay restitution. Those commitments included millions to Indigenous healing projects, and a national fundraising campaign.
But that campaign fell short.
Catholic entities raised just $3.7-million, and, in 2015, a court in Saskatchewan released them from their remaining commitments.
Since then, Indigenous leaders have repeatedly called on the Catholic Church to pay the rest of what it promised – even if it’s no longer legally required to do so. A common refrain from the church, according to their lawyers and leaders, was that no funds were available.
If you have further information about this story, please e-mail tips@globeandmail.com.
The Decibel: Inside The Globe’s investigation
Reporter Tom Cardoso spoke with Tamara Khandaker about how he and Tavia Grant deciphered the finances of the Catholic Church in Canada. Subscribe to The Decibel for more episodes.