The real cost of Harper's phony child care cheques
Thursday, August 3, 2006
Calling what the Conservatives are doing “universal childcare” is like calling Mike Harris’ landlords’ bill of rights “the Tenant Protection Act”. It’s a cruel joke on Canadian parents who are desperate to find quality, affordable care for their children – both to allow them to work and to foster the early development of their children. That said, even on its own terms – as a straight up payment of $3.28 a day to parents of young children – the Harperites’ cheques for children scheme is a huge failure.
First off, let’s deal with the fact that the payment is being administered separately from the existing Canadian Child Tax Benefit (CCTB). This will necessitate the creation of an entirely new bureaucracy and a massive marketing program to inform people of the need to apply (both of which you might assume that Harper would oppose). If Harper’s goal was to increase benefits to parents of young children, the infrastructure was already there to do it (he could even have established a floor of $100 per month for families that were previously ineligible due to their higher incomes). In fact, if he really wanted to ensure that parents of young children had money to spend on their care, he would have concentrated on requiring provinces to stop clawing back a portion of that credit from parents whose source of income is welfare (including Ontario, where Dalton McGuinty has promised to stop the clawback, but so far not done so).
The existing CCTB used to offer extra money to parents of children up to the age of six (the Young Child Supplement). The Conservatives forgot to mention that they were going to be cancelling that benefit. So, while many parents got their first installment of $100 on July 20, they also saw that their monthly CCTB payment was reduced by $20.75. In other words, instead of $3.28 a day, parents will actually be getting an extra $2.60 (except the wealthiest parents who, because they never qualified for the CCTB, will be getting the full $3.28).
But, unlike the CCTB, the new benefit is fully taxable. The Conservatives set up a new bureaucracy to send out $100 cheques, but they’re planning to reap $224 million in additional federal income taxes on the new benefit. And, parents will be paying tax on the full $3.28 per day – not just on the measly $2.60 per day that they actually get to keep. And, thanks to the income tax increase that Harper quietly implemented on July 1 (which, among other things, added nearly 200,000 low-income Canadians to the tax rolls), there will be even fewer crumbs available for parents.
The non-partisan Caledon Institute on Social Policy has calculated that “an Ontario two-earner couple with net family income of $30,000 will end up with just $199” after the cut in their CCTB and taxes are taken into account. In case you’re wondering, that brings the value of the benefit down to 54 cents a day. That won’t even buy you a cup of coffee, let alone child care.
Let’s not forget that your 54 cents per day is coming at the expense of a much-delayed child care program that actually showed some promise. After more than a decade of promises, the Liberals were finally delivering new money to create child care spaces. Now, the Conservatives say that their plan will create child care spaces as well. But, their plan to give $10,000 incentives to employers who create child care spaces has been tried before in Ontario, where it was an unmitigated disaster. Mike Harris offered employers $10 million in incentives between 1998 and 2004, but less than $500,000 was utilized before the program was discontinued.
The Ottawa Citizen obtained a copy of the Reformatories’ briefing book on this subject and it showed that they are very much aware that their approach won’t work. Besides citing the Ontario failure, the book notes that “employer-sponsored child care accounted for only about three per cent of the almost 600,000 child care spaces across Canada in 2000. It also said provinces that have introduced incentives to expand employer-supported child care have had limited success, and that the take up of tax incentives has been ‘extremely low’.
So, what are the consequences of the Harper government’s actions? Besides the fact that you might have some extra change rattling around in your pocket, you’ll have to look even harder before finding a child care space. You just may have to settle for the first space that comes available, rather than being able to choose the child care program that is best for both you and your child. And, since many child care centres are reportedly taking advantaged of the perception that parents will have an extra $100 per month to pay for child care, you’ll probably be paying more (especially if your additional taxable income prevents you from qualifying for a child care subsidy). That’s a heck of a price to pay to satisfy Stephen Harper’s ideological predispositions.