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Child Benefits in Canada: Politics Versus Policy

June 10, 2015 | By |

Child benefits are social programs that can be powerful tools to combat poverty and inequality.

They not only help low-income families but also the middle class. The federal and provincial/territorial governments over the years have achieved considerable progress in strengthening the architecture of child benefits in Canada.

Unfortunately, the current federal government took an about-face on child benefits when it came to power in 2006. It imposed a series of programs intended to help not only low- and middle-income families — the traditional target of child benefits ­— but also affluent   households that do not need help from government.

Policy Objective

The policy objective for child benefits in our social architecture is to build a single, streamlined and progressive support with a strong poverty reduction impact and improved income security for modest- and middle-income families.

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Current Status

Core objectives

To properly understand the current debate over federal child benefits, we first must explain what their core purposes are. In Canada, child benefits — meaning income payments on behalf of children, delivered either in the form of cheques or income tax reductions — have historically pursued two fundamental and related purposes: poverty reduction and parental recognition.

Under the poverty reduction objective, child benefits help fill the gap between the earnings of low- and modest-wage parents and their families’ income needs, based on the long-recognized reality that a market economy does not vary wages

and salaries to take into account the number of family members dependant on that income. The parental recognition objective views child benefits as an important way for society to provide some financial recompense for the fact that parents bear expenses that childless households, at the same income level, do not.

These dual objectives are interrelated. Both assume that society has an interest and obligation to help parents with their child-rearing costs. Children grow up to become workers and taxpayers and so it is in the interest of everyone — including those without children — that the value of this work is recognized and parents are supported in the child rearing work that they perform.

Old as they are, the twin aims of child benefits ­are as relevant today as they were when instituted decades earlier. Profound social, economic and demographic changes challenge the capacity of our social architecture to help Canadians [Mowat Centre 2015, Caledon Institute of Social Policy 2006]. Many families struggle to raise their children in a Canada of persistent poverty, stagnating incomes, precarious employment and widening inequality. Fortunately, child benefits play a crucial role in supplementing incomes for lower- and middle-income households.

Important social programs such as child benefits need to be modernized. Child benefits are a major but unappreciated element of federal income security policy. Not surprisingly, child benefits architecture has changed significantly over the years though the evolution has not been smooth and steady.

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Ken Battle

Release Date

June 10, 2015

Release No.