In the budget announced a couple of weeks ago, there seemed to be no question that the proposed Canada Child Benefit (CCB) was the ‘star’ of the federal budget – the key measure the Liberals have introduced to help families and children experiencing poverty.
According to the Liberal government, the CCB aims to provide more “tax-free money tied to income” to low- and middle-income families than the former government’s suite of child benefits. The Liberals believe this new benefit will provide more support for low-earning families and contribute to lifting many children, families and single parents out of poverty.
The CCB is an important departure from the previous child care benefit, the Universal Child Care Benefit (UCCB) which provided $1,920 annually to all families with children under 5 years of age and $1,200 for children ages 6-17. Alternatively, the CCB will be more directly connected to those families who need support. In a household with children under the age of 18, families earning a net income of under $30,000 will receive the full amount of the benefit ($6,400 for children under 6, and $5,400 for children under 18).
It seems like the CCB is a big step forward for families experiencing poverty – but we have some questions about what this will actually mean for people in poverty.
What about child care? How does the CCB fit into the rest of the picture?
While the CCB may be a step in the right direction, we currently lack a nation-wide child care program. Meanwhile, the shortage of available spaces for children in licensed day care centres continues to grow. The reality is that increased income through the CCB will not address the lack of access to high-quality child care – we need a coordinated government child care plan to support it.
In 2012, there were only enough regulated child care spaces for 20.5% of Canada’s children aged 0-12. Licensed child care spots are both limited and expensive, causing parents to rely on more affordable, unlicensed care. In Ontario, some parents pay more than $12,000 a year for an infant in child care.
Over the past few years, Canada has performed dismally on child care spending measures. Among OECD countries, Canada is one of the lowest spenders on early childhood education and child care (ECEC). In 2009, Canada spent between 0.2 and 0.34% of its GDP on ECEC, making us the fifth lowest spender of OECD countries. Canada’s spending is half the OECD average and one third of the recommended minimum GDP spending for children ages 0–5. Unsurprisingly, we also have some of the highest child care fees among OECD countries.
The lack of affordable child care in our country has not gone unnoticed by the international community. The Committee on the Elimination of All Forms of Discrimination against Women has called on Canada “to step up its efforts to provide a sufficient number of affordable childcare spaces.” It connected this recommendation with the need to increase access to “affordable and adequate housing options”.
While this government has shown some intention to explore child care, as noted by the Childcare Resource and Research Unit, the government missed a chance to act since funding for a child care framework has been pushed back to the 2017 federal budget.
Will the full benefit amount be available to those who need it most?
It is absolutely critical that the CCB not result in claw backs that deny the most impoverished Canadian families additional income to help meet their children’s needs. Along with other organizations, CWP is seriously concerned that the CCB might lead to claw backs in social assistance payments.
The amount of social assistance someone is entitled to depends on their income. An individual accessing social assistance who also receives income from other sources (e.g. other social benefits) may have their social assistance payment reduced if their total income from all sources exceeds a certain amount. This reduction in their social assistance payment is called a claw back.
Social assistance rates across Canada are shockingly low. Rates would have to increase by almost 50% to raise recipients above the poverty line, when using the Low Income Cut-Off After Tax measure. The actual claw back in payments comes from the provincial or territorial government – but the federal government could add a condition to payments through the Canada Social Transfer to prevent claw backs. So far, the federal government has yet to take a lead in making sure all individuals, especially those who need it most, have access to the full CCB.
The CCB will not take effect until June/July 2016, which means eligible families will receive benefits in the following year and the current child benefit system will remain in place for the upcoming tax year.
And what about the other people living in poverty?
Single adults, seniors, and those unable to file income tax returns will not benefit from this program. While other benefits exist – for example, some seniors are eligible for Old Age Security benefits – Canada still lacks a national anti-poverty plan to coordinate these programs.
Do you have any questions about the CCB or any other poverty related issue in Budget 2016? Let us know by filling out the form below:
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Jillian Premachuk is a Carelton BSW Student and Morgan Teeple Hopkins is a University of Ottawa Law Student.
Canada Without Poverty is a non-partisan, not-for-profit, charitable organization dedicated to the elimination of poverty in Canada. CWP is here because of your support. We would not be able to continue our work in eliminating poverty without your help. Please consider making a donation to CWP to support our work in ending poverty for everyone in Canada.
