Scheer unveils plan to make maternity benefits tax-free
OTTAWA — Andrew Scheer says a Conservative government would make parental employment insurance benefits tax free.
Scheer announced the policy in a campaign-style news conference in Toronto on Tuesday. The Conservative party estimates a Canadian parent earning $50,000 per year would save about $4,000 in taxes.
The policy is similar to a private member’s bill Scheer introduced last year, which was defeated in the House of Commons in June 2018. An analysis by the independent Parliamentary Budget Officer estimated the plan would have cost $607 million in 2018-19. Because the benefit could carry over if a new parent wasn’t taxed that year, the PBO estimated a “future liability” of $261 million in subsequent years.
“The government shouldn’t tax parents for the time they take to care for and bond with their new child when they’re already making such a huge sacrifice,” said Scheer, flanked by two mothers and their children at a child care centre.
His announcement comes as the pre-election race begins to heat up after a relatively quiet summer of politicians on the barbecue circuit.
In the Greater Toronto Area — a battleground both the Liberals and Conservatives believe will be decisive — the Conservatives are pushing an affordability message, trying to make the case that a Scheer government would be better for Canadians’ pocketbooks.
The Conservative plan would introduce a non-refundable tax credit of 15 per cent for any income received from employment insurance parental benefits. The program would introduce an equivalent credit for parents in Quebec who receive payments from the Quebec Parental Insurance Plan. New parents who don’t pay taxes while on parental leave would be able to carry forward the credit for future years.
Earlier this year, the Liberal government increased the payout from the Canada Child Benefit to a maximum of $6,639 for each child under six, and $5,602 for children between six and 17. The Liberals have tied increases in the benefit to the rate of inflation. According to the government, the Canada Child Benefit has reduced the number of children living in poverty by 278,000 since the Liberals introduced the increased benefit in July 2016. It replaced the former universal child benefit.