Effective on July 2016, the Trudeau Government rolled out the new Canadian Child Benefit program (CCB). The main purpose of this is to strengthen the middle class, which was one of the focuses of the 2016 Federal Budget.
This program is to replace the Universal Child Care Benefit (UCCB) and non-taxable Canada Child Tax Benefit, helping families with a net income under $65,000 per year. As mentioned in the 2016 Canadian Federal Budget, CCB will offer up to $6,400 a year per children under the age of 6, and $5,400 a year for those children aged 6 to 18.
The previous UCCB paid $160 per child per month to families with children under 6, and $60 aper month to families with children aged 6 – 17, regardless of the income level (CBC). The new CCB shifts the focus towards families earning less than $190,000.
Household incomes over $30,000 will not receive the full benefit, and household incomes over $190,000 will not receive any CCB. In other words lower income families will benefit greatly benefit from the new CCB, where higher income families will receive less benefits, or no benefit at all in some cases.
The Trudeau Government claimed that “families benefiting will see an average increase of almost $2,300 in the 2016-17 benefit year.” This aligns with the Trudeau Government’s objective to strengthen the Canadian Middle Class, ensuring that the economy is still strong.
In March, Finance Minister Bill Morneau said “this is a plan to help families more than any other public policy since public health care.” The Trudeau Government estimated that there will be 300,000 less children in poverty during 2017, compared to 2014 – as a result of the new CCB.
In general, government stimulus is one way to boost consumer spending – which is one of the most important aspect of any economy. The CCB can lead to a snowball effect of creating more jobs, and growing the Canadian economy, since it could potentially raise consumer spending.
Although the new CCB is expected to indirectly raise consumer spending – the new program is expected to cost approximately $22.4 billion over five years (CBC). The question many economics may consider – will the benefits to the Canadian Economy (and the Canadian Middle Class) be greater than $22.4 billion over the next five years?
The benefit received by the Canadian Economy and Canadian Middle Class depend on the changes in consumer spending.
— Bill Morneau (@Bill_Morneau) July 19, 2016
Use this Canada Child Benefit Calculator provided by the Government of Canada to estimate your benefits, which depends on the family income, and number of children (under the age of 6, and between the ages of 6 – 17).
Taking advantage of Government Incentives are one of the many effective ways Millennials (and Middle Class families) can increase their income, helping them save more.
You may also be interested in: 3 Main Focuses of the 2016 Federal Budget
Writer: Jelani Smith
Disclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.