Study
| EST. READ TIME 2 MIN.Households earning less than $40,000 now receive 16% of total federal child benefits—down from more than 21%
Is the Canada Child Benefit Targeted to those Most in Need?
- This essay assesses the federal government’s multiple claims that the Canada Child Benefit (CCB) is targeted to those who need it most.
- Any program providing benefits to 90 percent or so of families will struggle to be targeted to only those in need.
- Of the total benefits paid under the CCB, 8.3 percent is allocated to families with a gross income below $30,000; that proportion increases to 16.2 percent if gross family income is $40,000 or less.
- More than half of the total CCB (50.3 percent) is allocated to families with incomes of $70,000 or higher.
- The CCB represents a material increase in costs from the previous combination of the Universal Child Care Benefit (UCCB) and the Canada Child Tax Benefit (CCTB). The cost estimate for the CCB for 2019-20 is $24.4 billion, an increase of $5.7 billion, or 30.5 percent, compared to the previous programs.
- The most pronounced increase from the old UCCB plus CCTB programs compared to the new CCB were for those families with incomes between $40,000 and $120,000; the CCB also increased benefits to families with a gross income of up to $180,000.
- Under the previous programs, eligible families with incomes below $40,000 received 21.8 percent of the benefits whereas under the CCB, they receive 16.2 percent of the total.
- Families with incomes between $50,000 and $120,000 previously received 44.4 percent of the total benefits whereas they now receive 56.9 percent, a marked 28.1 percent increase in the distribution for middle-income families.
- The CCB cannot be credibly referred to as a targeted program and it transfers relatively more to the middle class than did the previous child benefits system.
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Infographic
Read Part II: Financing the Canada Child Benefit
Read Part III: The Distribution of the Canada Child Benefit by Family Type and Income Level
Read Part IV: Does the Canada Child Benefit Targeted to those Most in Need?
Read Part V: Adjusting for the Canada Child Benefit’s Tax-Free Status
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Christopher A. Sarlo
Professor of Economics, Nipissing University -
Jason Clemens
Executive Vice President, Fraser Institute
Jason Clemens is the Executive Vice President of the Fraser Institute and the President of the Fraser Institute Foundation. Hehas an Honors Bachelors Degree of Commerce and a Masters Degree in Business Administration from the University of Windsor as well as a Post Baccalaureate Degree in Economics from Simon Fraser University. Before rejoining the Fraser Institute in 2012, he was the director of research and managing editor at the Ottawa-based Macdonald-Laurier Institute and prior to joining the MLI, Mr. Clemens spent a little over three years in the United States with the San Francisco-based Pacific Research Institute. He has published over 70 major studies on a wide range of topics, including taxation, government spending, labor market regulation, banking, welfare reform, health care, productivity, and entrepreneurship. He has published over 300 shorter articles, which have appeared in such newspapers as The Wall Street Journal, Investors Business Daily, Washington Post, Globe and Mail, National Post, and a host of U.S., Canadian, and international newspapers. Mr. Clemens has been a guest on numerous radio and television programs across Canada and the United States. He has appeared before committees of both the House of Commons and the Senate in Canada as an expert witness and briefed state legislators in California. In 2006, he received the coveted Canada’s Top 40 Under 40 award presented by Caldwell Partners as well as an Odyssey Award from the University of Windsor. In 2011, he was awarded (along with his co-authors) the prestigious Sir Antony Fisher International Memorial Award for the best-selling book The Canadian Century. In 2012, the Governor General of Canada on behalf of Her Majesty the Queen, presented Mr. Clemens with the Queen Elizabeth II Diamond Jubilee Medal in recognition of his contributions to the country.… Read more -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more