OTTAWA -- There will be big cheques coming for 4 million Canadian families with children under 18 on July 1, 2015. The federal government will provide six months' worth of increases to the Universal Child Care Benefit all at once, part of a pre-election wave of tax cuts aimed at families with small kids.
The Harper government is also pressing ahead with income splitting for families with kids under 18 -- a multibillion-dollar Conservative election promise from 2011 that critics have said would benefit too few Canadians.
The so-called "Family Tax Cut'' will allow an eligible taxpayer to transfer up to $50,000 of income to his or her spouse for tax purposes in order to collect a non-refundable tax credit of up to $2,000 per year. The cap of $2,000 is a new element of the plan, designed to assuage critics' complaints that the tax cut would disproportionately benefit wealthier Canadian families.
Prime Minister Stephen Harper, in announcing the cuts, said they would mean the federal budget would still be in deficit in the 2014-2015 fiscal year, before returning to surplus the following year. But he said the budget "will still be balanced during the life of this Parliament."
PBO, last week, said we were on track to post $3.6B surplus this year. PMSH just spent $3.06B of that this afternoon. pic.twitter.com/dy9OPLLxCH
— David Akin (@davidakin) October 30, 2014
The Conservative government is boosting the universal child care benefit to $160 a month for kids under six, up from $100, and introducing a new benefit of $60 a month ($720 a year) for children aged six through 17, effective in 2015.
Over the first six years they are in place, the tax cuts all told are estimated to cost $26.8 billion, according to the government's own figures.
"Under the plan that we have announced today, every single Canadian family with children will benefit. Everyone will have more money in their pockets," Harper said.
"We are fulfilling our commitment to Canadian families and ... we are doing this while remaining on track as we promised to balance our budget in 2015."
The existing Child Tax Credit will be scrapped. It would have been worth $400 million in 2014-2015 and $1.8 billion in 2015-2016.
The family tax cut is expended to cost $2.4 billion in 2014-2015 and $1.9 billion in 2015-2016. Some 1.7 million families are expected to benefit.
Additionally, the Child Care Expense Deduction will be increased by $1,000 but only effective in the 2015 taxation year.
The government says the measures would provide $4.6 billion in annual relief to about four million families with children.
Middle class families shouldn’t have to pay more to give families like Mr. Harper's and mine a $2,000 tax break.— Justin Trudeau, MP (@JustinTrudeau) October 30, 2014
.@althiaraj Harper has no respect for #EarlyChildhoodEducation or experts.#childcare never meant to replace parents.Many need to pay bills— Jinny Sims (@jinnysims) October 30, 2014
The move was praised by the Canadian Taxpayers Federation, which nonetheless noted it would have preferred broader tax cuts, as opposed to ones focused on families with small children.
But the plan "is considerably better than a giant institutionalized national daycare system,” CTF federal director Aaron Wudrick said in a statement, referring to the NDP's recently announced proposal for a federally funded day care system.
Asked whether the new, $2,000 cap on the income-splitting benefit meant this was a "watered down version" of his 2011 election promise, Harper stressed the new was a "much expanded version" of the election promise, and the income-splitting "Family Tax Cut" alone would benefit 1.7 million families.
Original Article
Source: huffingtonpost.ca/
Author: The Huffington Post Canada | By Althia Raj
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