Scheer prom­ises tax credit for par­ents

The Prince George Citizen - - News -

An­drew Scheer made a pre­cam­paign play for parental votes Tues­day as he promised that a Con­ser­va­tive govern­ment would in­tro­duce a tax credit for new moth­ers and fathers re­ceiv­ing spe­cial em­ploy­ment in­sur­ance ben­e­fits so they can stay home with a new child.

The govern­ment taxes em­ploy­ment in­sur­ance ben­e­fits for new par­ents, along with any em­ployer top-up, while on ma­ter­nity or parental leave, although par­ents can be in for a sur­prise at tax time if not enough money was de­ducted off each pay­ment.

What the Con­ser­va­tive leader pro­posed Tues­day – dur­ing an event at a Toronto day­care, sur­rounded by new and soon-to-be­moth­ers – is a non-re­fund­able tax credit on 15 per cent of what­ever a new par­ent earns while they are on leave to re­duce their taxes at the end of the year.

It’s an idea he first un­veiled through a pri­vate mem­ber’s bill in early 2018, part of an early gam­bit to en­cour­age fam­i­lies to sup­port the Con­ser­va­tives in the Oct. 21 vote. He also vowed to keep the Canada Child Ben­e­fit.

The par­lia­men­tary bud­get of­fi­cer cal­cu­lated in May 2018 that Scheer’s plan would cost the fed­eral trea­sury about $600 mil­lion in its first year, and $261 mil­lion in fu­ture years, since the plan would let fam­i­lies carry over any un­used credits.

Scheer ar­gued that the pro­posal would be a “sig­nif­i­cant tan­gi­ble ben­e­fit” di­rectly to par­ents to help ease the cost of car­ing for chil­dren in that first year – part of a larger theme of cost of liv­ing that he said will per­me­ate the Con­ser­va­tive elec­tion plat­form.

“It is a Con­ser­va­tive prin­ci­ple to pro­vide sup­port di­rectly to par­ents, that’s some­thing that Lib­er­als fought against for decades,” he said.

“Of course we’re go­ing to con­tinue to sup­port that pro­gram (Canada Child Ben­e­fit) and any pro­gram that pro­vides those child care dol­lars or sup­port for rais­ing chil­dren di­rectly to par­ents.”

Polling data sug­gest Con­ser­va­tives fare poorly with younger fe­male vot­ers – par­tic­u­larly ones who claimed the ma­jor­ity of the al­most $4 bil­lion in ma­ter­nity and parental ben­e­fits the fed­eral govern­ment doled out in 2017-18.

Of­fer­ing those vot­ers some ad­di­tional fi­nan­cial help could help the party while also mak­ing it dif­fi­cult for their op­po­nents to at­tack the mea­sure, said Chris­tian Bourque, vice-pres­i­dent of Mon­treal polling firm Leger.

“What they’re an­nounc­ing... ac­tu­ally tar­gets the least likely voter for the Con­ser­va­tives,” Bourque said. “They’re do­ing well among women 55-plus, so no need to throw money at them – that’s the other way of see­ing it.”

EI cov­ers 55 per cent of earn­ings, up to a max­i­mum amount, over 12 months for those who have enough qual­i­fy­ing work hours to be el­i­gi­ble for ben­e­fits.

The Con­ser­va­tive pro­posal wouldn’t ap­ply to any other ben­e­fits that new par­ents might mix in, such as care­giver ben­e­fits if a new­born falls ill, or sickness ben­e­fits for the par­ents them­selves – those would re­main taxed at the same rates.

Nor would there be any changes to an ex­emp­tion that al­lows new par­ents to keep a por­tion of any ex­tra cash they earn with­out los­ing too much of their ben­e­fits.

Scheer said that the value of the credit would put about $4,125 into the pockets of a par­ent earn­ing on av­er­age $50,000. The fig­ure is based on a 15 per cent credit on the 27,500 from EI – or 55 per cent of $50,000 in­come.

The par­lia­men­tary bud­get of­fice pre­vi­ously said that the pro­posal, if im­ple­mented, would likely help those at higher in­come lev­els more by re­duc­ing the amounts they owe.

Those at lower in­come lev­els

al­ready pay lit­tle, if any, taxes.

Ex­perts, labour and busi­ness groups have called for other changes to the parental leave sys­tem to al­low more par­ents to qual­ify and boost the value of ben­e­fits paid out.

As is, about one-quar­ter of moth­ers out­side Que­bec aren’t el­i­gi­ble for ben­e­fits be­cause they don’t

have enough qual­i­fy­ing hours.

Jen­nifer Rob­son, an as­so­ciate pro­fes­sor of po­lit­i­cal man­age­ment at Car­leton Univer­sity in Ot­tawa, ques­tioned how much the Tory pro­posal would ac­tu­ally save at the end of the year.

She also ques­tioned how much it would help low-in­come par­ents, hav­ing spent years study­ing the EI

ma­ter­nity and parental ben­e­fits sys­tem.

“If you have a higher in­come be­fore start­ing leave as a par­ent, you’re al­ready more likely to qual­ify for EI. But 30 per cent of new moms don’t get $1 out of EI, even if they paid into it. Maybe there are bet­ter ways to help more fam­i­lies with in­fants?”


Fed­eral Con­ser­va­tive leader An­drew Sheer holds four-month old Antonio Wang while care­giver Anna Yang watches at a Toronto child care fa­cil­ity where he gave an an­nounce­ment Tues­day.

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