It’s not easy to stir up a public uproar by writing about the finer points of Canada’s tax code, but our columnist Kyle Carruthers managed to pull off the trick recently.
Boosters of the federal Conservatives have been quick to criticize the column in question, in which Carruthers reckons the government’s expanded Universal Child Care Benefit may be worth as little as $1.19 a month to some families, thanks to a variety of clawbacks. Carruthers reached his especially low tally by making an observation that nobody else had until now: Ottawa’s cancellation of its child tax credit resulted in the elimination of a parallel credit in the Yukon.
You can debate the merits of including that disappeared credit in your math. Conservatives say it’s off-point, since it’s a territorial affair. Maybe more to the point, the territorial government introduced a number of perks that appear to more than offset the lost credit, in the form of lower personal income taxes and a boost to another child tax benefit.
Let’s be charitable and set aside the lost territorial credit. Even then, a Yukoner taking home $50,000 can expect to keep less than $15 per month of the new child tax benefit. And as for that generous cheque you may have recently received from the federal government? Expect to pay a big chunk of it back come tax time.
You don’t have to take our word for it. Those are the same conclusions drawn by a tax accountant recently interviewed by the Globe and Mail. An analysis by the CBC came to similar conclusions, saying that most Canadians should expect to keep no more than one-third of the hand-out, and in many cases less than one-quarter.
As for the lost territorial child credit, if you expected Yukon Premier Darrell Pasloski to speak to its disappearance, which had gone unnoticed by many until now, you haven’t paid much attention to our premier’s penchant to duck subjects he deems inconvenient. Our leaders could have made a decision to keep the tax credit. They didn’t, and as far as we can tell, they’ve never publicly acknowledged that decision.
As for the complaints by Conservative supporters that Carruthers’ observations are politically manipulative, well, that’s a bit rich. How else do you describe splashing more than $3.5 million at Canadian parents immediately before an election?
To recap, back in the fall the government boosted the monthly cash credit for parents with children under six to $160, from $100. As well, a new $60 credit was rolled out for parents with children between six and 16.
As the government tells it, it just so happens that the payment of this new money, which was supposed to take effect in January, was sufficiently complicated that it had no choice but to hold back seven months’ worth of payments until the cusp of the territorial election in July. If that didn’t look tacky enough, the minister responsible declared that the payments were “Christmas in July” and bragged about the spending spree while wearing a blue golf shirt emblazoned with the Conservative Party’s logo.
It all smacks of an attempt to bribe the public with our own money. But remember, it’s the people who dare criticize the handling of all this who are playing politics.
Critics note you could sock this money away in a tax-sheltered savings account or use income splitting to avoid being dinged. But that’s probably not much help to the hardworking families struggling to make ends meet that are described in the government’s own advertising campaigns. Indeed, the prime minister has boasted that the child benefit cheques will result in a spending spree that he says will help stimulate the sluggish economy, so it seems the government is actually banking on parents not saving much of the money that they will eventually be expected to repay.
There’s a grab-bag of other criticisms. Conservatives complain that Carruthers focussed on the increase to the child benefit, rather than the total amount. But the Conservative Party is the one bragging about the increase as a new goodie being offered to voters.
Critics also note that lower-income Yukoners will keep a bigger share of their child benefit cheques, while the now-gone child tax credits would have offered a smaller benefit, as non-refundable credits count for little when you aren’t expected to pay much tax. That’s fair enough, although the fact remains that residents with lower incomes will be expected to give a big chunk of their cheque back. And it’s a little odd to frame the child benefit cheques as a poverty-fighting program, when the money is also being given to business executives and deputy ministers.
The other parties, of course, have their own inducements aimed at families. The NDP, while promising to continue paying the bigger child allowance, also wants to throw billions at a new national daycare program that would cap costs for parents at $15 per day.
The Liberals, meanwhile, say they’ll roll the existing hodge-podge of child benefit programs into one big, new income-tested program and kick another $2 billion into the pot. The Grits say that, under their scheme, a typical two-parent family, with two children, earning $90,000 a year, will get $490 tax-free every month, while a typical one-parent family, with one child, earning $30,000 a year, will get $533 tax-free every month.
Both these plans look considerably more generous than what the Conservatives are offering, but you’ll have to judge for yourself whether you think their proponents will be able to make good on this and other commitments, without breaking the bank.