Caledon's analysis concludes that the people who will benefit least from the Connie campaign plank are the people who need the help in child care the most:
The proposed Child Care Allowance would pay its lowest amount to families with modest incomes close to the poverty line:[p.4, emphasis added]
*• A two-earner couple with two children (one child under 6 and thus eligible for the Child Care Allowance) and income of $36,000 (only a few thousand dollars above Statistics Canada'’s estimated aftertax low income cutoff of $33,152 for cities of 500,000 or larger in 2006) would end up with an Allowance worth only $388 − one-third (32.3 percent) of the $1,200 face value payment.
*• A one-earner couple with two children (one child under 6) and income of $33,000 (just below Statistics Canada'’s estimated after-tax low income cutoff of $33,152 for cities of 500,000 or larger in 2006) would end up with $650 − just over half (54.2 percent) of the $1,200 face value payment.
*• A single parent with one child under 6 and income in the $27,000 to $29,000 range (not that far above Statistics Canada'’s estimated $21,341 after-tax low income cutoff for a two-person family living in cities of 500,000 or larger in 2006) would end up with $481 − only 40.1 percent of the $1,200 face value payment.
The true value of the Child Care Allowance shows no rational relationship to families'’ incomes. Only the poorest families on welfare, with no or only a few thousand dollars of earned income, would get the full $1,200 − but only if the provinces and territories exempted the Child Care Allowance from the calculation of income for purposes of determining social assistance, which Ottawa would have to ensure through negotiations. There is no guarantee that provinces and territories would agree to this, since some might argue -– correctly -– that families on welfare already have fully or almost fully subsidized child care so do not need the additional $1,200 to pay for child care. Instead, some provinces/territories might argue the added funds should reduce provincial/territorial costs of child care subsidies for families on welfare.
In this case, families on welfare would not gain at all from the new federal program.
