Question Period Note: CANADA CHILD BENEFIT

Canada Child Benefit Update - Inflation

• The Government introduced the Canada Child Benefit to provide increased support for low- to middle-income families with children. Because it is tax-free and based on income, it provides more support to those who need help the most.
• The CCB has helped reduce the number of children living below the poverty line by hundreds of thousands since 2015 by putting more money in the pockets of parents who need it most.

• We provided families with children with a one-time payment in May 2020 of up to $300 as well as the temporary Young Child Supplement in 2021 of up to $1,200 to help offset the effects of the Pandemic and the rise in the costs these families faced. These measures have helped families build resilience.

• We recognize the importance of adjusting the CCB to reflect the increasing cost of living. That is why the CCB has been annually indexed since 2018.

• That said, we also recognize the current rate of inflation is creating additional challenges for all Canadians. We will continue to prioritize the needs of children and families.

• In July 2016, the CCB replaced three different previous benefits—the Canada Child Tax Benefit including the National Child Benefit Supplement, and the Universal Child Care Benefit—with one simplified, fair and tax-free monthly child benefit.

• To ensure that the CCB continues to help Canadian families over the long term, the Government began indexing the CCB, starting in July 2018, to keep pace with the cost of living.

• In the 2022-23 benefit year, the maximum annual benefit is $6,997 per child under 6 years of age, and $5,903 per child aged 6 through 17. Families with less than $32,797 in adjusted family net income receive the maximum benefit. This represents a 2.4% increase since the last benefit year (2021-22). Both the maximum benefits and the income thresholds are indexed annually based on the Consumer Price Index (CPI).

• A family with one child age 5 and one child age 9 with an average family net income of $65,000 will receive $8,553 in 2022-23. This represent $406 more than they would have received in 2021-22 ($8,147).

• The formula for CCB indexation, which uses prices from the previous year, generally works well except in periods of rapidly rising inflation. Benefit increases are currently not keeping up with the rise in the cost of living, but are mitigating them to some extent.

• A foster parent may not be considered primarily responsible for the care and upbringing of a child if the child is legally, physically, or financially maintained by a child welfare agency. In those cases, a children’s special allowance is paid to the agency and the CCB is not available to the foster parent.

• The Children's Special Allowances (CSA) program provides payments to federal and provincial agencies and institutions (such as children's aid societies) that care for children. The monthly amount payable for each child is equal to the maximum amount of the CCB. For eligible children, the CSA payment may also include the Child Disability Benefit. An agency can request that CSA payments be made directly to a foster parent of the child.

• In addition, there is a Child Disability Benefit (CDB) which is a monthly benefit included in the Canada Child Benefit to provide financial assistance to qualified families caring for children who have a severe and prolonged impairment in physical or mental functions. For the 2022-2023 benefit year, the Child Disability Benefit provides $2,985 for each child under the age of 18 who is eligible for the Disability Tax Credit.

• The Department of Finance is the policy lead on the CCB, and the Canada Revenue Agency administers the benefit. ESDC contributes to ongoing policy development by working collaboratively with them and with provincial and territorial governments, to help ensure that the CCB continues to result in strengthened systems of support for all low- to middle-income families with children across Canada.

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