Liberal proposals to drop the Child Tax Benefits will especially hurt single-income families
Human Resources Development Canada (Lloyd Axworthy’s Ministry) has recently released a new booklet called Have Your Say. It’s available at local postal outlets. In it, Canadians are invited to give their comments about the future of social programs in Canada.
The booklet covers many topics from Unemployment Insurance to education funding to federal funding of provincial welfare programs. You might have already heard that there are proposals to cut back significantly the amount of funding for post-secondary education. However, there is an even more important issue raised which has not generated much press. But it could ultimately be devastating to middle income families in Canada.
Buried deep in the booklet is the little phrase that at first seems innocent. On page 13 the following comment is made: “the Child Tax Benefit could be targeted so that low-income families get more money. Some higher-income families would receive a lower benefit, or no benefit at all.”
At first glance, the comment seems to apply only to high income families. Who could argue with the idea of taking from the rich and giving to the poor. Seems noble, right!
But there is more. The booklet also states: “Not all details and information can be included in a book this size. If you would like more information call 1-800-735-3551… to get a copy of the Improving Social Security in Canada discussion paper.”
As in many lengthy documents it is important to read the fine print. The government discussions of proposals to amend Social Programs is no exception. One of the items in the full booklet is titled “Redirecting funding to new priorities.” Three sentences describe the notion of what the new priorities might involve.
Better income support for low-income families with children could be provided through a strengthened federal Child Tax Benefit. One way to accomplish this would be through better targeting of the current Benefit to low-income families. This would mean that middle – and higher-income families would receive a smaller benefit, or no benefit at all. (page 77)
Translation into English: the federal government is considering dropping the Child Tax Benefit for middle-income families. (For more details see the separate book Income Security for Children. In particular, page 16).
It is hard enough these days to raise a family without the government taking away it support. Single-income families are especially having a tough go of it in recent years. If a mother chooses to remain at home and raise the children, she gets of a credit for income tax purposes than if both parents are working and earning the same total income. Now, the government seems to be willing to take away the one support it can give to the middle-income families of this country.
How did this happen?
Years ago, children were “deductions” on the income tax return. The government also gave a “family allowance” to the parents who were rightly providing a great service to society by bringing up the future citizens of our land.
However, in 1993 the then Conservative government changed the structure of the tax system. No longer were children “deductions.” Instead the system changed to make the support of families with children a “Child Tax Benefit.” What it meant was that the government would view the support of families not as a deduction for the expenses associated with the raising of children for which credit should be given, but rather as an expenditure which the government was paying for out of its own pocket. In the stroke of a pen, the government became a donor of money to families instead of recognizing costs associated with the raising of children as an expense suitable as a tax deduction.
Imagine the outcry from businesses if business expenses were no longer deemed a deduction from income but as a payment by the government for costs associated with running the business. Aren’t the costs associated with the raising of children much more a proper deduction from the income of a family? Aren’t children more important than widgits? However, in 1993, families still got about the same net income so there was no outcry.
Well, today there should be huge outcry for middle-income families and families with stay-at-home mothers.
If the suggestions in the report are made into law, it will be increasingly difficult for middle-income families to raise their children. For them, the Child Tax benefit will disappear. The costs associated with the raising of children will no longer be recognized as an expenditure worthy of being called a deduction or deserving of repayment as a benefit.
Have your say. Go to your local post office. Ask for the booklet. It contains an envelope which you can use to send your response. Raise the issue with other families in your area. Visit your Member of Parliament about the protection of the family. Do not stop raising your concerns even after the date contained in the booklet of January 16, 1995. Until there is a new law, your concern over protection of the family will have to be raised again and again until any idea of taking away the Child Tax Benefit for middle income families is put to reset.
