June 8, 2018
All Tax Articles

In the 2016 Budget, the newly-elected Liberals announced a large increase in the Child Tax Benefit, renamed the Canada Child Benefit. It is now $6,400 per year for each child under 6 and $5,400 for each child age 6-17. It is gradually phased out once the parents’ net income exceeds $30,000, but the phase-out is quite slow. For example, with 4 children age 6-17 the benefit disappears entirely only when the family net income reaches $211,375.

As originally announced, the Canada Child Benefit was not going to be indexed to inflation. Possibly the Liberals wanted future political credit for announcing increases, or else wanted the real cost eroded over time to reduce the federal deficit. However, the Parliamentary Budget Officer, in September 2016, publicized the fact that the new program would cost the government less than the old program by about 2025. As a result, indexing was restored, but it would not start until July 2020.

However, in its October 2017 Economic Statement, the government announced that indexing of the Canada Child Benefit will begin in July 2018 (instead of 2020). The earlier indexing was attributed to “growing economy and improved fiscal track”. 

This letter summarizes recent tax developments and tax planning opportunities from a third-party affiliate; however, we recommend that you consult with an expert before embarking on any of the suggestions contained in this blog post, which are appropriate to your own specific requirements. Please feel free to get in touch with Lee & Sharpe to discuss anything detailed above, we would be pleased to help.
Adam H. Sharpe

Hello, my name is Adam Sharpe, I am a partner at Lee & Sharpe.

Related Posts

Want to hear more?
Subscribe to our monthly newsletter below

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form