Daily BrewAll the "free money" Canadian parents get - and why
Kids can be expensive – costing more than $240,000 to the age of 18 by some estimates. But there’s money in those gurgling bundles of joy too, thanks to government programs that help parents out with everything from grants towards Liam’s future post-secondary education to money for childcare to tax breaks for Shannon's ballet lessons.
Funded as they are out of the country’s tax base, there are those without kids who complain they are forced to contribute to programs that only parents can benefit from. They ask, why should they keep paying and covering at work for someone else while yummy mommy’s off on mat leave? That ignores the fact that society as a whole benefits from children who are well-supported as they grow up, says Nora Spinks, CEO of the Ottawa-based Vanier Institute of the Family.
“From an economic perspective it’s an essential thing to do,” Spinks said.
“Investing in children and families is an investment in our own collective future … I may have a child I raise and that child may take care of me personally when I’m old. However that child may also be the doctor that looks after you, even though you didn’t have any kids.”
Recognizing the nation does better when it’s replacing itself, including creating the next generation of taxpayers, the governments of Canada and its provinces provide many different benefits to help offset the costs of having kids, paying for them and caring for them. Here are five biggies:
1. Universal Child Care Benefit
This is the one grabbing all the headlines lately. The UCCB has been around since 2006 and initially was there to help out with childcare costs for kids under age six, regardless of whether a child was in an organized childcare or not. Eligible families received $100 per month per child, which was also taxable. That figure has increased to $160 monthly under the expanded program, which started to pay out this month, retroactive to the start of 2015. Families with kids ages six to 17 will also receive money -- $60 per child a month. The funds however are not automatic. Parents who want to get the benefit must be signed up for it. All told, the lump sum retroactive payments represent nearly $3 billion. Meanwhile, parents can also claim a separate childcare expense deduction on their income tax, up to $8,000 for kids under seven and $5,000 for seven to 16.
2. Employment Insurance Maternity and Parental Leave Benefits
You’ve been to the parties and said your farewells to co-workers going off on “mat leave,” the so-called paid vacation for women expecting babies or adopting a child. Daddies are eligible too. But while it does give parents time off work for the heavy lifting of caring for newborns and helping adopted children adjust, EI parental leave benefits don’t pay out a worker’s full salary. New moms can take up to 15 weeks off, in addition to a 35-week parental leave that either parent can take or split. The payment however is 55 per cent of their salaries to a maximum of $524 per week (Quebec has its own plan). Low-income earners may also be eligible for a special supplement that can increase their EI payment to as much as 80 per cent of their weekly earnings.
3. Canada Education Savings Grant
You want to make sure Junior makes it past high school and earns a degree or diploma towards that dream job so that your basement does not become his adult reality. But we all know college and university are big ticket items, so every dollar counts. Fortunately the federal government will kick in up to $500 a year – to a lifetime maximum of $7200 -- for any child up to age 17 with a Registered Education Savings Plan (RESP); but that money is contingent on parents contributing $2500 to get that $500 maximum. Children in low-income and middle-income families can receive an extra top-up of 10 per cent to 20 per cent for contributions their families make to their RESPs.
4. Children’s Fitness Tax Credit
The Children’s Fitness Tax Credit was brought in by the Harper government in 2006 to get kids under age 16 (under 18 if they have a disability) off the couch and into/onto the nation’s hockey arenas, swimming pools, soccer pitches and the like. The credit was doubled to $1000 for 2014 and will become refundable in Canadians’ 2015 taxes. Ontario offers a complementary credit to a lesser amount for children involved in activities such as music or dance.
5. Provincial benefits for having kids and childcare
In addition to what’s offered by the Canadian government, each province has its own menu of grants and subsidies to help parents with the general costs of raising kids and specific programs dedicated towards childcare and other expenses. In Ontario parents can receive the Ontario Child Benefit, targeted towards lower-income families with a maximum payout of $1336 per child annually. Alberta, among several options, offers parents who stay at home or work part-time up to $1200 a year for each child who attends a pre-school program.
