Canada Child Benefit

The Ontario Child Benefit gives low-income to moderate-income families up to $1,607 per child per year to help with the cost of raising children. You can receive this benefit if you are working or if you are not working.

We investigate whether child tax benefits reduce child poverty and labor force participation among single mothers within the context of the 2015 expansion of the Canadian Universal Child Care Benefit (UCCB) and the 2016 introduction of the Canada Child Benefit (CCB). We compare single mothers to single childless women as single mothers have historically had the highest poverty rates. Our analysis indicates that both reforms reduced child poverty, although the Canada Child Benefit had the greater effect. We find no evidence of a labor supply response to either of the program reforms on either the extensive or intensive margins.

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Food insecurity is a pervasive public health problem in high income countries, disproportionately affecting households with children. Though it has been strongly linked with socioeconomic status and investments in social protection programs, less is known about its sensitivity to specific policy interventions, particularly among families. We implemented a difference-in-difference (DID) design to assess whether Canadian households with children experienced reductions in food insecurity compared to those without following the roll-out of a new country-wide income transfer program: the Canada Child Benefit (CCB). Data were derived from the 2015-2018 cycles of Canadian Community Health Survey. We used multinomial logistic regressions to test the association between CCB and food insecurity among three samples: households reporting any income (N = 41,455), the median income or less (N = 18,191) and the Low Income Measure (LIM) or less (N = 7579). The prevalence and severity of food insecurity increased with economic vulnerability, and were both consistently higher among households with children. However, they also experienced significantly greater drops in the likelihood of experiencing severe food insecurity following CCB; most dramatically among those reporting the LIM or less (DID: -4.7%, 95% CI: -8.6, -0.7). These results suggest that CCB disproportionately benefited families most susceptible to food insecurity. Furthermore, our findings also indicate that food insecurity may be impacted by even modest changes to economic circumstance, speaking to the potential of income transfers to help people meet their basic needs.

Known as the Canada Child Benefit, the amount your family receives depends on factors like household income, family size, and your province or territory of residence. Fortunately, the process of applying for this benefit is fairly straightforward.

For example, you can apply for the CCB when you register the birth of your newborn child, usually at the hospital or birthing centre. As long as you provide your consent and social insurance number (SIN), the CRA will get your information.

Tax Credit: Benefits where the amount of tax owed is reduced; thisis different from a tax deduction, which reduces the amount of taxable income (thiswould only benefit those who have an income and owe taxes).

Introduction: Food insecurity-the inadequate access to food due to financial constraints-affects 1 in 6 households in Canada, with serious health implications. Family benefit programs supplementing income have shown potential in mitigating the risk of food insecurity, but there is little understanding of their protective effects. The authors aimed to estimate the impacts of the additional Canada Child Benefit provided to families with children aged

Results: Receipt of the additional Canada Child Benefit ($724 on average) was associated with 2.89 (95% CI=1.35, 4.42) percentage points lower probability of experiencing food insecurity among recipients with children aged

Conclusions: The authors found plausibly causal evidence that the more generous Canada Child Benefit for Canadian families with young children reduces their probability of food insecurity. Increasing benefits for economically disadvantaged households, characterized by low incomes, single parenthood, and renting (versus owning), may improve the program's efficiency and equity in supporting families' food security.

In January 2008, Congress and the George W. Bush administration came together to pass a stimulus bill that contained the first refundable tax credit ever included in such a bill. One component of that credit was what was a one-time credit of $300 per child for families with earnings above $3,000. In October of that same year, Congress temporarily lowered the earnings requirement for the Child Tax Credit from the indexed $10,000 to $8,500.

The next major change to the credit came with the Tax Cuts and Jobs Act (TCJA) of 2018. The TCJA changed the Child Tax Credit in five significant ways, transforming it into the largest federal expenditure made that directly benefits children (costing over $120 billion per year), but low-income children were left behind when it came to reaping the full benefit of this expansion. The TCJA:

As this brief history of the Child Tax Credit shows, the credit has consistently benefited children in families who had sufficient earnings to qualify; on the other hand, the children who would benefit the most from the credit have consistently been left out of the full benefit. That said, the policy has incrementally covered more and more children, and become more generous (nearly matching the maximum benefit levels of peer countries under the TCJA), so the next step is to ensure that the children who would benefit the most have full access to this credit.

Canada has a long history of both means-tested and universal child allowances. The Canadian Child Benefit, established in 2016 by the Trudeau government, streamlined several child-based policies and substantially increased their generosity.

To compare the potential impacts of these proposals, we model a reform to the Child Tax Credit that would make it similar to the Canada Child Benefit. Under this reform, families would be eligible for a maximum credit of $4,80349 per year for each of their younger children (age 0 to 5) and $4,053 per year50 for their older children (age 6 to 17).51 Families with adjusted gross incomes below $22,095 would receive the maximum credit, and it would phase out for families with earnings above this threshold. The phaseout rate depends on income levels and household size (see Table B1 in the Appendix B for the details regarding phaseout rates across the income distribution). Figure 2 depicts the credit values that a two-parent family with two children (one younger and one older) receives under existing policy compared to a credit modeled on the Canada Child Benefit.

It has been argued that universal programs have greater political feasibility and greater protection in the long run, while targeted programs are vulnerable to cuts during periods of fiscal constraint.52 Some find that redistribution is actually greater (that is, lower-income families benefit more) in systems where benefits are universal due, in part, to these political forces.53 Universal child benefits are also thought to be less distortionary, particularly with regard to employment and labor market participation because the benefits do not decrease as earnings increase.54 An additional argument in support of universal programs is that they do not require complex (and often costly) administrative systems like those that are regularly attached to targeted programs.55 Other arguments for universal benefits are that they are not stigmatizing and promote social solidarity in contrast to programs targeted solely to families in poverty. Benefits from a program that is nearly universal, even if targeted heavily to families in poverty, are unlikely to be stigmatized.56 A common argument in support of targeted programs is that they are less expensive, and that they free up resources and allow those who need benefits the most to receive more than they would under a universal system.57 Note that is only true if the budget of the program is able to hold, given the scrutiny that targeted programs often face and the challenge of protecting them.

Looking at the cost estimates of the Child Tax Credit reforms explored in this report, a child allowance in the United States similar to the Canada Child Benefit would cost between $50 billion and $80 billion per year (on top of the existing costs of the Child Tax Credit),58 The American Family Act is estimated to cost $105 billion, per year59 and making the existing Child Tax Credit fully refundable is estimated to cost $23 billion per year.60 A credit modeled after the Canada Child Benefit is less expensive than the American Family Act because of the steep phaseout and targeting of the benefit. There are, of course, costs to this targeting that we do not explore in this report, ranging from the administrative costs associated with targeted programs to the potential behavioral impacts on labor force participation. These effects, may be greater for a program that begins to phase out earlier in the income distribution and at a steeper rate, on average. What the results do show, however, is that if there was a hybrid program similar to the American Family Act that provided additional benefits (as generous as those provided through the Canada Child Benefit) to children in lower-income families, we could cut poverty among children by half.

The analysis in this report shows that reforming the Child Tax Credit to establish a child allowance could be an effective method for reducing child poverty in the United States. Further, it could help ensure that children suffer less from the consequences of economic inequality and that they have more equal access to opportunity. These policy reforms also provide stability in times of uncertainty, a guarantee that is particularly important in light of the impact that COVID-19 has had on millions of families and children. But uncertainty and instability are not unique to times of national crisis, and policies that provide stability are, no matter the circumstances. e24fc04721