House of Commons Update
OTTAWA – POLITICS – This week the Conservatives tried to buy the votes of millions of Canadian parents by sending them huge cheques, but as with everything this government does there is a catch. Many actually.
I’d like to say first off, that New Democrats and our leader Tom Mulcair have committed to keeping the Universal Child Care Benefit (UCCB) should you elect us to govern this fall. Tom has said this publicly many times, but the Conservatives campaign machine has repeatedly said that we won’t. We understand that many families need help as the costs of raising children is increasing, the number of good paying jobs is decreasing, and that many like the UCCB. But for reasons outlined below, and in addition to keeping the $160 monthly payments to parents, New Democrats will also create 1 million childcare spaces costing parents no more than $15 per day.
When it was announced earlier this year, the increase in the UCCB from $100 per month to $160 was welcomed relief for many parents. At the same time they announced the increase however, the Conservatives also decided to make the changes effective as of January 1, 2015. Since an election was to come in October the Harper government decided that rather than issue one UCCB cheque per month as usual, they would make parents wait six months so that they could give them a much larger “retroactive lump sum payment,” and that was delivered to mailboxes and bank accounts this week. For a parent with one child under 8 years old it meant that their “retroactive lump sum” deposit this week could reach $720. This decision, to make a lump sum payment a few months ahead of an election was designed to win people’s votes, but I think it is worth (everyone) remembering that this is nothing more than Conservatives attempting to bribe parents with their own tax dollars.
In addition to the big new cheques there has been also been significant dishonesty from the Conservatives about the actual benefits of this new program. On the same day the new UCCB came into effect (Jan. 1) the federal government also eliminated an existing annual child tax credit of $2,255, which was worth $337.50 per child annually in 2015. That change alone wipes out almost half of the UCCB increase. However, the Conservatives went a step further and also made the UCCB taxable, both federally and provincially, which it was not previously. This means that an Ontario parent earning $50,000, for example, pays income tax at a combined marginal rate of 31.15 per cent. So, with $720 of added income from the UCCB, an additional $224.28 would be clawed back on the person’s taxes next year. Those two factors leave the new benefit at just $158.22 a year per child for that Ontario parent, or $13.18 a month. So parents received big new, pre-election, cheques this week but will have a much (much) smaller tax refund cheques next year (about 6-8 months after the election).
There are other catches too. For instance, and thanks to Canada’s new recession and budget deficit, the $3 billion needed to fund this program will be borrowed. With the oil price cash – and massive declines over the past decade in manufacturing, forestry, agriculture, tourism, and other sectors – Canada is set to become the only G7 country in a recession in 2015. As a result, federal tax revenue is also crashing because fewer tax dollars are being collected from energy companies, Canadian families, and the banks that finance them. As a result, New Democrat Finance Critic Nathan Cullen asked the independent Parliamentary Budget Officer to update our fiscal forecast using the Conservatives’ own budget formula, and he reported this week that the federal government will have at least a $1 billion deficit in 2015-16.
What does it all mean? It means that all of the parents that got these huge cheques this week will lose up to 80% of it when they file their taxes next year. It means that that the Conservatives’ put their own electoral interests ahead of good fiscal management and a balanced budget, and that the children of the parents who received these cheques will have to pay the interest upon this new debt for decades to come. It also means that the Conservatives’ will say or do absolutely anything to get themselves re-elected, including bribing Canadians with their own money and misrepresenting how much they of it they will actually get to keep.
You deserve better, and New Democrats are ready to provide the honest and fiscally responsible federal government we need.
John Rafferty MP
Thunder Bay Rainy River