Watch above: Stephen Harper made some big promises to families. Shirlee Engel explains what it all means for you.
OTTAWA – Prime Minister Stephen Harper is pressing ahead with income splitting for families with kids under 18 — a multibillion-dollar Conservative election promise from 2011 that critics have said would benefit too few Canadians.
To address that complaint, the Conservative government is also boosting the universal child care benefit — $160 a month for kids under six, up from $100, plus a new monthly benefit of $60 for children aged six through 17, effective in 2015.
The so-called “Family Tax Cut” will allow an eligible taxpayer to transfer up to $50,000 of income to his or her spouse for tax purposes in order to collect a non-refundable tax credit of up to $2,000 per year.
The two measures together will cost $3.1 billion in 2014-15 and $4.5 billion in 2015-16.
“Our goal has always been to make sure that Canada is the best country in the world in which to raise a family,” Harper told a campaign-style event in Vaughan, Ont.
“Our government is utterly convinced of one thing: when it comes to the cost of raising a family, Canada’s moms and dads deserve all of the help that we can give them.”
The government is also adding $1,000 to the various limits on the child care expense deduction, which allows taxpayers to claim child care expenses incurred in order to work or go to school.
That measure carries an estimated cost of $15 million in 2014-15 and $65 million in 2015-16.
Harper repeatedly hammered home the message that the entire suite of measures —he described it as an expanded version of the government’s original income-splitting promise — would benefit all Canadian families with children.
And he acknowledged the whopping price tag, which he said the government would well be able to afford.
“The measures we announced today, while very significant in terms of cost, are completely affordable within the current budget projection, still allowing us to balance the budget next year, and do all the other things we do as a government,” he said.
“At the same time, we’re doing this in a way that ensures that the things we promised in the last election will actually reach people in the life of this Parliament.”
There’s a very significant reason why that particular timing is such a priority for the government: were the government to wait, families would not feel the tax help until after the next federal election, slated for October 2015.
To be sure, Thursday’s event had all the trappings of a campaign event, complete with two ‘average’ Canadian families on the stage, both of whom briefly exchanged awkward small talk with the prime minister about the daily challenges of raising a family.
“We know Canadians work hard for their money; we know they work hard raising their families too,” Harper said.
“Under the plan we have announced today, every single Canadian family with children will benefit. Everyone will have more money in their pockets.”
WATCH: How might income splitting affect your family? Sean O’Shea reports.
The Conservatives made the income-splitting promise during the 2011 election campaign, but it was contingent on the federal books being balanced.
Harper has said the federal deficit in the past fiscal year would be $5.2 billion, a fraction of the $16.6 billion forecast, but insisted there won’t be a surplus until next year.
Earlier this month, the Conservatives doubled the children’s fitness tax credit starting this year — another 2011 commitment that was contingent on the federal books being balanced.
A promise to double the maximum annual contribution limit on tax-free savings accounts to $10,000, the last of the three major surplus-contingent 2011 promises, has yet to be implemented.
Harper hinted Thursday that the tax-free savings expansion would be contained in the next federal budget in the spring.