Tax incentives for food donation

Tax Incentives

For Food Donation

Rewarding food donation

Food banks were originally meant as a short-term solution to food insecurity and hunger. According to Food Banks Canada ,”Thirteen percent of Canadians live in a state of food insecurity, which means they do not have reliable access to adequate amounts of safe, good-quality, nutritious food. The root cause of hunger in Canada is low income, which consistently affects more than four million of us at any given time.

Food banks are an important method of addressing this need. Each month, over 850,000 people turn to food banks for help; more than one-third are children and youth.”

The need for food banks continues to increase as these charitable non-profit organizations that predominately depend on donations and volunteer labour, bridge the increasing gaps and shortfalls of our welfare system and other government policies that impact poverty issues.

Communities across Canada have benefited from these safety nets while many of these organizations have faced funding challenges. Not only do food banks need food to stock shelves but there are costs of transportation, storage, disposal, leases, and administration.

Food banks rely on food donations.

In 2012, Food Banks Canada issued a report titled, Stimulating Canada’s Charitable Sector: A Tax Incentive Plan for Charitable Food Donations, recommending the creation of a tax incentive to stimulate charitable food donations to food banks. The proposal would allow food manufacturers, importers, distributors and retailers to deduct from taxable income the production cost of food donated to food banks, plus one half of the unrealized appreciation (with a maximum deduction of twice the production cost). Currently there is no financial benefit for the donation of food to a food bank.

Recently, The National Zero Waste Council has been also promoted a tax incentive for charitable food donations to encourage food donation to food banks in its National Food Waste Strategy. It is believed that this strategy will increase access to food stuffs and lower garbage disposal costs for municipalities as well reducing greenhouse gases.

Tax incentives for food donations is also advocated in the United States by organizations like The Food Waste Reduction Alliance (FWRA), an initiative of the Grocery Manufacturer s Association, the Food Marketing Institute, and the National Restaurant Association. Food donation tax credits are also legislation is being shaped in many states.

Sounds like a great idea, but is it a win/win for everyone?

Remember when we stated that food banks were meant to be a temporary solution. Graham Riches, CCPA-BC Research Associate and Professor Emeritus of Social Work at the University of British Columbia argues that “ reliance on charity has been steadily weakening Canada’s once progressive social safety net, and continues to threaten current anti-poverty strategies.” He concludes that domestic hunger remains invisible as a human rights and social justice issue on Canada’s public policy agenda. The corporatization of hunger allows our governments to keep looking the other way.

Sometimes one policy gives while the other takes away. Food banks have disposal issues and costs just like retailers and restaurants but imagine if it is now food banks that acquire the costs dealing with food that is not edible. Or imagine that a change in garbage fees ,a policy set by municipal government ,impacts the costs of food banks performing these needed services.

Not all donated food is safe, appealing or nutritious. Food Banks and Soup Kitchens: An Overview a report by The N.B. Common Front for Social Justice Inc highlights the experiences of food bank and soup kitchen patrons with spoiled food, the variety of food is limited, and does not meet daily nutritional requirements.

But where is the money for food banks?  Tax incentives may increase costs for small volunteer run food banks including increased paperwork for donations.  Increases of donated food may lead to increased sorting, storage, transportation costs.  Food banks often rely on grants for equipment and improvements to programs; these grants are not always from governments. In fact we see that encouraging charitable food donation reduces waste costs for local governments but they are not always major financial supporters of food banks, The report referred to in the previous paragraph gives the examples of “Shediac’s Vestiaire Saint-Joseph annually receives a grant of $14,000 from the government, yet it spends over $100,000 on food alone, excluding its other expenses. Vestiaire Saint-Joseph’s survival rests on the profits it generates through the sale of second-hand clothing. The “Open Hands Food Bank”, which served 14,607 clients in 2009, only received $17,000 from the government, while its annual expenses were over $60,000.

Aart Schuurman Hess, CEO of the Greater Vancouver Food Bank also has voiced concerns about politicians not doing enough consultation on the impacts of this tax incentive policy on volunteer run organizations.”

Zero Waste Canada advocates for sustainable solutions to make our country and our earth a better place to live.

Yes we must reduce food waste.

Yes tax incentives will promote food donations to food banks.


While food banks are a doing fantastic job, they are a short term fix. Food banks are not supposed to be a long term solution to poverty and food insecurity therefore it is not a sustainable solution. Governments  need to address the root causes of food insecurity and create policies that reduce the dependence on food banks.