The first Conservative budget in 14 years, publicly presented by Finance Minister Jim Flaherty on May 3, is a historic shift that recognizes the central importance of families in society.
The budget statement said: “Strong families are the cornerstone of a sound and prosperous society, and are key to ensuring a bright future for Canada. The most important investment we can make as a country is to help families raise their children.”
REAL Women responded with effusive praise. In a press release, Gwen Landolt, vice-president of the pro-life and pro-family women’s group, said, “We finally have a government that addresses the real concerns of Canadians.”
The most significant aspect of the budget for families was the $100 per month universal childcare benefit that is paid directly to parents of children aged six years and under. The new system allows families to choose from a greater variety of childcare options, including in-home care, a baby-sitter, private or church daycare centres or institutional state-run daycare.
Prime Minister Stephen Harper ran on the $1,200 benefit and polling found that it was one of the most important issues during the campaign. The Liberals under Paul Martin, in contrast, supported a national daycare scheme paid for by taxpayers’ dollars and accessible to all. The problem, said pro-family groups, was that it penalized single-earner families by providing care for children whose parents put them in daycare, but offered nothing to families who make sacrifices so that one parent can stay at home with the kids. Columnist Ted Byfield wrote in the Western Standard magazine that the child allowance is indispensable, because “it confers real power on the traditional family” by reversing the trend of government policies to “diminish the family’s role” in raising children.
In his budget statement, Flaherty said, “This government understands that no two Canadian families are exactly alike. Each has its own circumstances and needs. Parents must be able to choose the child care that is best for them.”
REAL Women applauded the budget, stating in a press release: “REAL Women of Canada is pleased that the budget recognizes, as a core priority, choice in childcare and has moved to fund parents directly rather than fund institutions … Parents are a child’s primary caregivers and the best advocates for their care.”
John Williamson, the federal director of the Canadian Taxpayers Federation, told The Interim the child allowance is a “good policy,” because it “strengthens the family without telling them how to spend the money.” Furthermore, he said, it does not penalize stay-at-home parents.
The government did set aside $250 million to subsidize the creation of daycare spots for private companies and community groups, but it was a small fraction of the lowball estimate of $5 billion per year for the Liberals’ national scheme.
Shari Mills is a stay-at-home mother of three children in Mississauga. She appreciates the $1,200 annual allowance, even though her oldest son will turn seven later this year. “It validates our decision to keep the kids at home,” she told The Interim. “It isn’t just the money, it’s the recognition (from the government) that it is our decision how to best raise our kids, not theirs.”
Mills said that the money for the two youngest will cover monthly expenses like diapers, baby wipes, Vaseline, baby food and the “occasional new outfit,” but that “it won’t come close to covering the costs of raising a child in Canada in 2006.” But that doesn’t matter. “It will make it easier for us to raise our family. We won’t have to count the pennies as much.”
As well as implementing the Universal Child Care Benefit, the budget also proposed a children’s fitness tax credit beginning in 2007 that would provide parents with up to $500 per year in eligible fees for physical activity programs for each child under age 16. The tax credit for monthly public transit passes will also aid some families in large urban centres that rely on buses and subways to get to school. More significant, scholarships will no longer be taxed, providing aid to families with post-secondary age children.
The CTF’s Williamson said that families with young children “rocket ahead” financially and that the gap between dual- and single-income families will be lessened with this budget. He applauded the universality of the child allowance and noted that it will be a great benefit to single-income households, because the spouse with the lower income will be taxed on it. “The benefit,” he explains, “is stronger for single-earner families.”
Williamson said that although the tax credits are a form of social engineering from the right, they are small but helpful to families trying to make ends meet.
The government also announced plans to immediately cut the GST from 7 per cent to 6 per cent, with another one-point cut in the future. While the GST cut is an across-the-board tax reduction,, it will benefit families by reducing the weekly bills.
Williamson said the CTF estimates a single parent with one child earning $20,000 will save $88 a year; a single-earner family with two children earning $60,000 will save $275 a year; a dual-income family with two children earning $100,000 a year will save $476 a year. He criticizes those who scoff at the amounts of money saved by the GST cut. “Opponents of tax relief always say it is too big or too small,” he said. “Every little bit returned to families is helpful.”
Mississauga mom Mills told The Interim that the GST cut, while not “life-changing,” will make a difference. “How dare anyone dismiss what a 1 per cent cut in my bills means to our family,” she said. Between the baby products such as diapers, baby wipes and vaseline (on which she estimates she’ll save approximately $15 a year after the GST cut), there are other bills the family incurs, such as water, gas and hydro that will also be affected. “It comes down to families, all Canadians, saving money when they buy things. That’s good for us. It’s not Ottawa’s money, it’s our money and the more I get to use for our family, the better.”
The tax cuts, child allowance and tax credits add up. REAL Women said, “This budget is a step in the right direction to assist families in their vital work, which is the cornerstone of our society.”
But it also called upon the government to go further and provide greater aid for single-income families in future budgets: “Public policy should be neutral on the issue of career choice for women and treat women at home and in the workplace equally.”
Not all social conservatives were excited by the budget. In its reaction, the Christian Heritage Party said the budget was “not bad” because it provided some marginal tax relief to parents, but the party wondered what it would do to arrest the assault on life and family.
Its press release concluded: “What’s sad is not what this budget does, but what it lacks the courage to do.”