As church attendance and religious affiliation continue to decline across the West, many have lamented the spiritual and social side effects, including a weakening of civil society and the fragmentation of community life. What is less discussed, however, is the economic impact of such a shift.
In a new report, The Hidden Economy: How Faith Helps Fuel Canada’s GDP, researchers Brian and Melissa Grimm explore this very thing, offering an estimate of the socioeconomic value of faith and religion to broader society. The report, which is published by Cardus and focuses specifically on Canada, concludes that religious activity contributes an estimated $67.5 billion to the larger economy, making religion “the country’s ninth-largest enterprise, just behind TC Energy and ahead of Bank of Montreal.”
“The data are clear,” the authors conclude. “Religion is a highly significant sector of Canada’s economy. Religion provides purpose-driven institutional and economic contributions to health, education, social cohesion, social services, media, food, and business itself.”
Drawing from a diverse mix of prior research, the authors stitch together a range of contributions from religious organizations and institutions, leading to three distinct estimates (conservative, mid-range, and higher-end), as summarized below.
Estimate 1: Revenues of faith-based organizations ($30.9 billion)
Positioned as the most conservative estimate, this includes revenues from faith-based educational institutions, healthcare providers, congregations, media, and charities (e.g., anti-poverty programs, social outreach, and missionary organizations).
“While this first estimate has the most concrete data,” the authors write, “we believe that it is certainly an undervaluation because it focuses on annual revenues rather than on the fair-market value of the goods and services that religious organizations provide.”
Estimate 2: Adding in “halo effects” of congregational social services ($67.5 billion)
Described as “a more reasonable estimate,” this number adds in various “halo effects” – a term used to describe the social benefits that stem from religious congregations and faith-related businesses and institutions. Building on the first estimate ($30.9 billion), the authors draw from a range of other studies to quantify the value of “having the stable, attractive force of a congregation in a community.” They include “the broader impact of faith-based charity work beyond its direct finances, the economic activities of faith-related food businesses, and the economic value of congregation-based substance-abuse recovery support groups.” They come to a valuation of $36.6 billion – which, when added with Estimate 1, totals $67.5 billion.
For example, congregations provide significant value through communal support, direct spending in local economies, use of facilities/grounds, and various “magnet effects,” resulting in “visitors spending money at local restaurants and other small businesses.” They also provide an “invisible safety net, including the volunteer and in-kind support that augments a city’s network of social services.” This includes a range of financial, educational, and social support for the country’s immigrants. “Half of Canada’s newcomers receive some kind of material support from a religious community after arriving here,” explains Dijkema the video above.
“Every dollar in the budget of a church, mosque, temple, synagogue, or other religious community produces an estimated $4.77 worth of benefit for the surrounding community,” he continues. “That’s called the halo effect: the fair market value of the things they do every day that benefit neighborhoods, cities, businesses, and even people who never attend worship services.”
Estimate 3: Revenues of religiously affiliated Canadians ($689.5 billion)
The authors are quick to emphasize that this is not a “preferred estimate.” Yet by acknowledging such a number, they hope to recognize “that people of faith conduct their affairs to some extent (however imperfectly) inspired and guided by their faith ideals.”
Their findings hold a host of implications, such as whether declines in religiosity are likely to correspond with negative economic consequences. As we have seen in America, such a connection seems increasingly obvious, with religious life playing a pivotal role in both preventing social disruption and empowering communities when economic crises occur.
But the findings also draw our attention to the importance of religious liberty. “Safeguards for religious freedom – including constitutional protection of freedom of conscience and religion as a fundamental right – help to ensure a dynamic religious marketplace,” the authors write.
Further, as Dijkema concludes:
Absent a faith motivation, and the legally protected religious freedom to act on that freedom, much of that common good would shrink or disappear. When church buildings close, when worship service attendance drops, when the number of unaffiliated or irreligious Canadians grows, when we fail to protect religious freedom, it leaves more than just the collection plate empty. It leaves all of us with a poorer, less humane public square.
Religion remains a highly significant sector of Canada’s economy. What’s more, religion provides purpose-driven institutional and economic contributions to health, education, social cohesion, social services, media, food, and business itself. Religion feeds the soul, feeds the body, and ensures that we have a healthy public life.
In the wake of modernity, the void of religious life is increasingly apparent. In response, our solutions ought to be refined accordingly, relying on far more than policy maneuvers and social engineering. To create and sustain flourishing communities, we will also need a renewed focus on the lifeblood of our communal life.
That will require a robust cultural witness across all spheres of society – but especially in our religious communities.