You have to have a grudging respect for the relentless scheming of the Conservative Party in Ottawa. The Prime Minister’s Office must be like the set of Rowan Atkinson’s classic Blackadder series, where a character says “I have a cunning plan!” every five minutes.
With less than 90 days before the next election, the federal government has sent families cheques that in many cases are well over $1,000.
And in a move that fans of Blackadder’s Dunny-on-the-Wold by-election episode will admire, the minister responsible happened to have forgotten his suit that day. He made the television announcement in a bright blue Conservative polo shirt with a prominent Conservative Party logo.
All the opposition could do was sputter about federal government guidelines that are supposed to keep the maple leaf unsullied by crass partisan brand attacks.
Blackadder’s dim sidekick Baldrick could have thought that up. However, the real Blackadderesque cunning comes from how the new Universal Child Care Benefit (UCCB) cleverly plays with the numbers to make you think you are a big winner when, really, you’re probably not.
You see, the new UCCB gives you $60 a month for every child aged six to 17, plus $160 for each child under six. Since the program started in January but took awhile to set up, parents are now getting big cheques to catch up. If, for example, you have three children in the six-to-17 age bracket, and one child who annoyingly was born in 1996 and is too old, you got a cheque for $1,260.
I wonder how Blackadder got the federal computer programmers to be slow enough that people got cheques over $1,000, and fast enough that the cheques arrived just in time for the election.
Unfortunately for you, the cheques are taxable at both the federal and territorial level. Furthermore, they replace the previous child tax credit, which you may remember fondly from your old tax returns.
The man in the Conservative polo shirt said that every family in Canada would be better off under the new scheme.
However, the Globe and Mail, an Outside newspaper, interviewed a tax expert with Ernst & Young. He said that when you added up all the gains and losses, parents in the “middle to high tax brackets” would keep about $15 per month.
CBC calculated that an Ontario parent earning $50,000 per year would be better off to the tune of $13.18 per month per child.
Accusations of vote buying are as old as Parliament itself. Sir Robert Walpole, speaking of the House of Commons, is said to have remarked that “I know the price of every man in this house, except three.”
The man in the Conservative polo shirt thinks your number is around $15 per month.
He might be right. Mainstreet, a research firm, released a telephone poll last week reporting that parents who followed the UCCB news were 15 points more likely to vote Conservative than those who didn’t know about them. All polls must be taken with caution these days, but the Mainstreet poll did have a relatively large sample size of over 5,000 respondents.
So, what should you do with the money?
People who go out and blow the whole cheque like some kind of windfall will be in for surprise next April when they do their taxes. With a higher income thanks to the cheques, and lower tax deductions because they replace the old child tax credit, many people will face a higher tax bill.
So before your spouse takes the whole cheque to go put a deposit on a new snowmobile, tell her to stop.
What might be a more fitting way to spend the cash? Fifteen bucks will get you five kilograms of potatoes to feed the kids. Or a dozen litres of gasoline to get to work.
Or you could take the kids to Riverside for a malt, and then tell them they’re celebrating the fact that in the future you’ll be putting each month’s money into their Registered Education Savings Plan instead of buying them malts.
If you start doing that when a child is born, and you manage to achieve a five per cent tax-free return annually, he will have about $37,000 when he’s 17. That assumes you pay the extra income tax each year, and max out the government RESP grant.
However, as you may have seen in Kyle Carruthers’ column earlier this week, Yukoners may end up with even lower benefits than other Canadians. That’s because we had a matching Yukon child tax credit that is now also going the way of the Beringian Yukon Camel. Depending on how your taxes work out, your net benefit may be an extra bag of potatoes a year, rather than per month.
Of course, that also assumes the man in the Conservative polo shirt wins the next election.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won this year’s Ma Murray award for best columnist. You can follow him on Channel 9’s “Yukonomist” show or Twitter @hallidaykeith