The federal government is shifting the share of overall child benefit spending from low-income households to middle- and upper-middle income households at an even greater rate than previously thought. Research at the Fraser Institute Say.
This study examines the Canadian Child Benefit (CCB), a tax-exempt payment for low- and middle-income households, and how that tax-exempt benefit affects the distribution of spending across programs.
CCB expenditures adjusted for tax-exempt status are combined with actual CCB expenditures under two previous federal programs that were not tax-exempt (Universal Child Care Benefits (UCCB) and Canadian Child Tax Benefits (CCTB)). Compare with both Replaced by CCB in 2019.
According to the study, total CCB value increased from an estimated $24.9 billion to $32.5 billion in 2019, including tax-exempt status benefits.
However, comparing adjusted CCB spending to actual CCB spending for all eligible households, households with incomes below $10,000 showed no change in share of the overall distribution of spending. In contrast, for households with incomes in the $10,000 to $70,000 range, the share of CCB spending decreased from 44.7% to 40.7%. For families with incomes greater than $70,000, CCB’s share of total spending increased from 55% to 59%.
“Given CCB’s tax-exempt status, the shift in spending across CCBs to middle- and upper-middle-income earners is even greater than previous analyzes concluded,” the study said.
Comparing adjusted CCB spending to the distribution of spending under both the UCCB and CCTB programs reveals greater differences in benefit rates among families with different income levels.
For households with incomes below $60,000, CCB’s share of total spending decreased from 42.9% to 29.7%, while for households with incomes between $60,000 and $180,000, the share of spending increased, down from 49.2% in the previous two periods. increased from %. The program is 66.8%. Families with incomes greater than $180,000 decreased their share of total CCB spending from 7.9% to 3.5%.
“The federal government often insists that child benefits are directed to Canadian families who need it most, but changes in overall spending are another story,” said Jason Clemens, vice president of the Fraser Institute. said. news release August 18th.
“At a time when Ottawa is running a never-ending deficit, the CCB is yet another targeted federal program.”