“If the well-being of Canadian children was a priority for this government, they would be putting a national child care program ahead of yet another tax cut for the wealthy.” — James Clancy, NUPGE National President.
Ottawa (31 Oct. 2014) — Only the wealthiest families will gain from income splitting and the small increase to the child benefit announced on October 20 by the Conservative government. Most families will be financially worse off, as the billions of dollars required to pay for this new spending will mean less money for programs that actually help low- and middle-income families.
Income splitting favours the rich
Income splitting will not help those most in need. A family with two parents working for minimum wage or a single parent family, will get nothing. A professor of tax law, Kathleen Lahey, found that only 12 per cent of the billions spent on income splitting will go to families with incomes below $82,000.
In contrast, the wealthy will do very well with income splitting. Families with incomes over $182,000 will gain an average of $1,730.
Even many small-c conservatives feel there are problems with the proposal. The C.D. Howe Institute has pointed out that 85 per cent of Canadian families will not benefit.
Canada needs a real national child care program, not increases to the baby bonus
For all but the wealthiest families, an increase in the child benefit will likely leave them worse off. Low- and middle-income families benefit more from program spending than from lump sum payments. Child care is a good illustration of why that is the case.
A $15 per day child care program, like the NDP recently proposed, would save a family as much as $1,652 a month, depending on where they live and on the age of the children. In contrast, the proposed child benefit increase will provide only $120 a month for a family with two children under the age of six. Yet the Conservatives are choosing to pour billions into the child benefit and income splitting that could have been used to make child care affordable for all families.
“Federal funding for 370,000 affordable child care spaces would cost less than income splitting and do much, much more to help families with small children," said James Clancy, National President of the National Union of Public and General Employees (NUPGE). “If the well-being of Canadian children was a priority for this government, they would be putting a national child care program ahead of yet another tax cut for the wealthy.”
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE