Fraser Institute News Release: Share of total spending on child benefits for families with incomes less than $60,000 fell from 42.9% to 29.7%

VANCOUVER, British Columbia, Aug. 18, 2022 (GLOBE NEWSWIRE) --

The federal government has shifted the share of overall spending on child benefits away from lower-income families to middle- and upper-income families?to an even greater degree than previously thought, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"While the federal government often claims that child benefits go to Canadian families who need the money the most, the shift in overall spending tells a different story," said Jason Clemens, executive vice-president of the Fraser Institute and co-author of Adjusting for the Canada Child Benefit's Tax-Free Status.

In 2016, the federal government replaced two child-benefit programs with the Canada Child Benefit (CCB), which provides tax-free benefits to eligible families with children under the age of 18.

The study, based on data from Statistics Canada, measures the shifts in the share of child-benefit spending due to this change?although unlike previous analyses, this study accounts for the tax-free status of CCB payments (most other government income transfers are taxable).

Specifically, the elimination of the previous two programs and their replacement with the CCB?coupled with a recognition of the CCB's tax-free status?results in the share of total child-benefit spending on families with incomes less than $60,000 declining from 42.9 per cent under the previous two programs to 29.7 per cent.

At the same time, the share of total child-benefit spending on families with incomes between $60,000 and $180,000 increased from 49.2 per cent to 66.8 per cent.

While the share of total child-benefit spending on families with incomes above $180,000 declined from 7.9 per cent to 3.5 per cent.

"At a time when Ottawa is running deficits with no end in sight, the CCB is yet another poorly targeted federal program," Clemens said.

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.