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Don't expect a $1,200 cheque in the mail from the Conservatives' "choice in child care" plan.
Expect a nasty surprise -- higher income taxes and lower tax benefits and credits.
The Caledon Institute of Social Policy, one of Canada's leading public policy research centres, warns the centrepiece of the Conservative election platform is "unfair, irrational and inequitable."
The Child Care Allowance pays different amounts to different types of families with the same income.
Traditional one-parent-at-home families are favoured over single-parent families and two-earner families at all income levels. And low-and middle- income families get about half what the top-income families do.
In a paper released Monday, Caledon Institute executive director Ken Battle warns that what Canadian families see on the surface is not what they will get. Because the "choice in child care" package is actually a taxable benefit, it will raise every family's taxable income and therefore reduce every family's Canada Child Tax Benefit and Goods and Services Tax Credit.
The face value of the Conservatives' campaign centrepiece is touted as $1,200 for each child under six. "But this is an illusion," Caledon continues. "The scheme's true value for the vast majority of Canadian families would be less than that -- considerably less, in many cases."
The biggest losers? Families close to the poverty line. The biggest winners? One-parent-at-home families earning $100,000.
A single parent at the poverty line of $27,000 to $29,000 receives $481 of the $1,200. A two-earner couple at $36,000 realizes $388. But a one-parent-at-home family at $33,000 gets $650.
At the $100,000 level, one-parent-at-home families capture $1,032 of the $1,200, versus $778 for a two-income couples and $655 for single-parent families.
Theoretically, the poorest families on welfare should obtain the full $1,200. But, Caledon warns, Ottawa would have to negotiate with the provinces to exempt the Canada Child Care Allowance from the calculation of social assistance.
Since most provinces would likely resist, these families -- the poorest of the poor -- would be left out in the cold.
The plan is not only unfair, Caledon continues, it really isn't a child care plan at all, but a new child benefit. And this despite the fact affordable, quality child care is not only an urgent need for most families, but a vital contributor to an efficient labour market and national economic competitiveness.
The institute's final criticism of the plan is that it offsets only a fraction of child care costs. Most recent figures for full-time child care fees range from $6,000 to $12,000 annually for infants and from $5,000 to $8,000 for pre-schoolers.
The Conservative scheme would provide "an unnecessary subsidy to upper income families on top of their existing child care expense deduction while doing little to ease the often heavy burden of child care expenses for the large majority of families with low or middle incomes."
Finally, the Caledon Institute says the Conservatives' intention to break the child care agreements the Liberal government negotiated with the provinces will be particularly onerous to smaller provinces like Manitoba.
"It would be a big cost they can ill afford. It would really mean that poorer provinces would now have no fiscal room for any other social initiatives."
- reprinted from the Winnipeg Free Press