Slim Majority Votes Yes: New CCB Better than UCCB and Family Tax Cut

Knowledge Bureau Report’s monthly poll for October asked: “In your opinion is the new Canada Child Benefit (CCB) better than the combo of UCCB, Child Tax Benefit and Family Tax Cut?”  The results were almost evenly split: 52% voted yes and 48% voted no.

Respondents were also split on the value of the credits themselves, indicating that the planning required to maximize changes to family taxation and income redistribution is not well understood.

RRSP planning between now and February 28, 2017, is a critical component of maximizing the CCB. By making an RRSP contribution to reduce family net income to under $65,000, more of the credit will be received by families who would otherwise be in a clawback zone.

Some of the comments received in October’s poll were quite interesting:

From Laura: We found that most young families that were receiving the $100/month benefit under the Harper government were saving it into the kids RESPs. Most parents haven’t stopped saving if they no longer receive the $100/month, and yet most parents haven’t increased their savings as a result of getting more either.

Rachel saw the opposite: My clients, mainly low- and middle-income families, are overjoyed at this windfall. Most of my clients were not helped at all by income splitting… Is the money [from the CCB] put directly towards the children? Probably not, but it allows the family to have pizza night; put fuel in the car; pay for TV, internet, heat, groceries and other general household items to improve the overall household, being that of a family.

Patrizia agreed with Rachel: Agreed, I do not know any parent that is using that money to save for their child’s future. Again, scrap the child benefit and have free daycare for all working single mothers.

Lise thought the reason for the lack of savings was simple: At most times this money is not even used for the children, but to pay bills. As with the increase in minimum wage, everything went up in prices. This does not help the low-income families nor the children.

Frank offered this insight: In my opinion, the whole child tax benefit program is wrong. In which family, no matter the income, is the benefit used for the child? We would be much better off to spend the money on programs like full free daycare, free school meal programs or non-OHIP-covered medical for kids. (Spend) directly, and only to the child and not the parent.

Last word goes to Peter, who makes an important observation: It puts more money in the hands of lower-income families who presumably need it the most. So in that respect it makes sense. I could never understand the point of giving $100 per month to millionaires to help look after their children. The only problem is that the new Canada Child Benefit is not indexed, so I wonder how much it will be worth five years from now?

Thanks to everyone for participating in the Knowledge Bureau October Poll. Please join us with your opinions on this month’s poll question:

Do you agree that the new reporting changes for 2016 will result in significant audit activity on the disposition of principal residences?

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