B.C. child benefit plan could do much better

It’s time to bring program in line with those in other provinces, write Rhys Kesselman and Adrienne Montani.

Jessie is celebrating her daughter’s sixth birthday this month. Along with the celebration, though, Jessie is worried about how to make ends meet as a single mother. Although she works full-time, Jessie and her daughter live below the poverty line.

Now that her daughter is six, and without a change to Jessie’s income, the federal Canada Child Benefit will decrease by $85 a month and the B.C. Early Childhood Tax Benefit (BCECTB) of $55 a month will disappear entirely. Jessie relies on that monthly $140 to buy food and the two transit passes she now needs to get her daughter to school.

The B.C. government has no power over the federal child benefit, but it has full policy discretion over the BCECTB’s design. That program was introduced by the provincial government in 2015 as part of its Early Years Strategy to support parents with the costs of young children, including child care. Yet, the BCECTB lags behind the counterpart child benefit programs offered by seven other provinces.

All the other provincial child-benefit programs cover children through age 17, while B.C.’s benefits end when a child reaches six. Some of the other provincial programs also provide monthly benefits per child well above B.C.’s $55, with Ontario more than twice that figure and Quebec more than triple. Moreover, some of the other provinces index their benefits each year to inflation, whereas B.C.’s benefit has been frozen at its 2015 level.

As the Horgan government prepares the 2019 budget, it has an opportunity to correct all these deficiencies by extending benefits through age 17, increasing their level, and indexing for inflation. The BCECTB would be recast as the B.C. Child Benefit, since benefits would no longer be limited to early childhood. This reform would help families like Jessie’s and others living in poverty, as well as many moderate-income families with children aged six and older.

Like the current Canada Child Benefit program, the BCCB would reflect key properties of a basic income. Its benefits are calculated on family income with no other conditions, and they are paid regardless of whether parents are working, jobless, studying or minding the children. Payments are based on the number of children and incomes reported on tax returns, and the Canada Revenue Agency disburses benefits along with Canada Child Benefit payments.

One aspect of the original BCECTB needs to be revised in reforming the program as a BCCB. The current scheme, as formulated in 2015, pays the full benefit for eligible families with incomes up to $100,000 and phases the benefit to zero only at incomes of $150,000. This departs from the provisions in other provinces, which begin the phase-out of benefits at much lower incomes and end them entirely well below $100,000.

By making benefits more targeted to family incomes, a BCCB could economize on the budgetary cost of the reform. For example, Alberta’s child benefit level is 70-per-cent higher than B.C.’s and covers three times as many children; yet because of tighter targeting, Alberta’s budgetary cost is just 25-per-cent larger than B.C.’s. This shift would also ensure that poorer families are the largest beneficiaries. B.C. could frame the new policy as a key initial component of its poverty reduction strategy.

Unlike most policy proposals that have counterbalancing pros and cons, the arguments for reforming B.C.’s child benefit are clear. It’s time to bring B.C.’s program in line with those in other provinces. For many families, an enhanced child benefit aimed at r educing poverty would ensure that a child’s sixth birthday is not cause for greater economic hardship.