In his column Kyle Carruthers dissected the child benefit cheques parents are now receiving and labeled them ‘cynically orchestrated and a misleading ploy’. I suspect, however, Kyle’s analysis has more to do with what I perceive as the liberal/socialist bias of his columns than it does with reality.
Why have the NDP and Liberals both announced they would keep the child benefit? If their accountants had reached the same conclusion as Kyle that its net worth will only be $1.19 a month, would not both parties be making a big political stink about it?
Kyle ought to have expanded his analysis to include using the RESP (Registered Education Savings Plan) and the Tax Free Savings Account (TFSA).
Under the Conservative government’s Child Benefit Program, parents now receive $1,920.00 per child under six. If put into an RESP, the government will contribute an additional 20 per cent = $384.00/year of extra saving for your child – a total of $2,304.00/year to accumulate tax free!
Don’t forget, this is CASH, not a mere deduction from your tax. Yes, there still remains the loss of the Child Tax Credit, (which is claimed off tax owed at the lowest tax rate), however, leaving that aside for the moment, contrast this extra $384.00 against the extra tax some parents will have to pay which Kyle calculated as $223.20, and you get a net positive benefit of $160.80.
If your income is lower than the net taxable $50k per year Kyle used for his calculations, the benefit is even larger. If you are among the millions of working poor who pay little or no tax at all, you get to keep it all. That would seem pretty much in line with Trudeau’s view that the benefit should be directed toward poorer families and that wealthy families like his should not get the child benefit, although if they only get Kyle’s $1.19/month, Justin would probably not object.
Putting the child benefit money into a tax free savings account is also an option that can pay large dividends for families. Have a chat with a registered financial planner or an accountant to check it out and don’t forget to also plan for children 6-17 for whom families will receive $60/month per child.
Don’t buy the baloney of those who are criticizing the Conservatives for their spending on the Child Benefit Program. Perhaps it was somewhat self serving of the government to payout those big cheques just before an election, but cynical it was not. It is a great program for families and Minister Poilievre is well justified in his promotion of it.
It seems to me Kyle’s cynicism would be better visited upon the opposition parties and their promises. If either the Liberals or NDP win the election, the Child Benefit Program and many other benefits which the Conservatives have instituted will likely be lost despite their assurances to the contrary. But perhaps Kyle really doesn’t care about that.