How to Do a Children’s Budget and a Tax Cut Budget in 2000

Ottawa is under pressure to deliver a so-called ‘children’s budget’ in 2000, but there are also demands to ease the tax burden. Caledon offers a package of proposals that would accomplish both tasks. The centerpiece is a two-stage boost to the new Canada Child Tax Benefit: 1. a third major increase to reach the level of $2,500 per child for low-income families needed to complete the important task of replacing welfare benefits on behalf of children with an income-tested system that provides equal payments to all low-income families with children, including the working poor; and 2. broadening the Canada Child Tax Benefit to restore and increase payments to modest- and middle-income families, in the process achieving a de facto substantial tax cut and laying the foundation for an effective family income security system. In addition, Caledon proposes reindexing the income tax system, refundable GST credit and Canada Child Tax Benefit, and raising the middle and top income tax brackets raised (e.g., from 29,590 to $32,000 and from $59,180 to $64,000, respectively). Maternity and parental leave benefits under Employment Insurance should be improved (e.g., increased to provide a combined full year, and made more accessible by amending the qualifying and requalifying work requirement rules). The federal government should establish a national child development fund to invest in provincial and community infrastructure for parents and children (e.g., early childhood development, child care, employment supports).

ISBN – 1-894159-71-3