OTTAWA – The parliamentary budget watchdog says the government’s cornerstone child benefit will end up costing billions more after the next election if its value increases with the cost of living.
The Canada Child Benefit isn’t indexed to inflation for now, and the Liberals haven’t agreed to do that until 2020 – after the next scheduled federal election in 2019.
The parliamentary budget officer previously forecasted that the cost to the government would fall over time to the same level of spending as seen under the previous Conservative system of benefits and tax credits which the Liberals replaced with the new, income-tested benefit.
The PBO says in a report today that keeping up with inflation would cost federal coffers an extra $301 million in 2020, rising to an extra $5.8 billion in 2026.
The total extra cost over that time frame? Almost $22.3 billion, if the government in 2020 follows through on the Liberal plan.
The new benefit, a central plank in last year’s Liberal election platform, kicked in on July 1.