Moldy Peaches

Conservative MP, and soon to be Cabinet Minister, Monty Solberg signalled yesterday that there are two things the opposition parties can keep their hands off - the tax cut plan and the child care plan - a.k.a family allowance.

Solberg and crew shouldn't have much opposition to GST cut, corporate and capital taxes. It remains to be seen, however, if they will do the unpopular thing and hike income taxes to pay for it.

There stance on the new child care road map is completely different. The new family allowance plan is one of the worse ideas the Tories had in the arsonal. The plan is slated to cost over $10 billion in the next five years and will do little to ensure childcare spaces are provided for Canadians. I have raised this issue a few times on Moldy, but it is worth a much closer look.

The plan, similar to the Liberals 50/50 Tuition Plan, overwhelming favours the well-off. Now, some of my Conservative friends are ok with that and for other policies I would have little trouble with it but not this one. This plan needs go back to the garage and get a new coat of paint, some new tires and real engine.

The plan does little to address the supply side of the childcare equation. It only offsets the cost of childcare by a fraction (average cost of childcare in the country is at least $500 per month is Why am I so against giving parents choice? I am not. What I am against is believing that transfering a universal taxable benefit to every Canadian is good policy. The so-called $25 week or $1,200 is not actually that. It is a taxable benefit so very few Canadians will actually realize a benefit that size.

Also, since this money is taxable it will work to clawback other programs designed to assist working poor Canadians. It is simply adding another brick to the welfare wall. If the Conservative party was truly progressive or populist, they would extend a hand to these Canadians by assisting them rather than pushing them back under the poverty line.

The plan is also unfair because it would favour one-earner families over single-parent families and two-earner families. Most Canadian families need and use child care outside the home so that parents can work in the paid labour force or study. The proposed plan would do little if anything to increase the supply of affordable, quality child care. Nor would the scheme do much to help families pay for child care, since it would offset only a fraction of the cost of child care.

A much better alternative to the Conservative plan would be to use that money − about $1.6 billion net of federal and provincial/territorial income taxes − to boost the Canada Child Tax Benefit to strengthen the child benefit system. The base Canada Child Tax Benefit could be raised by about $800 per child under 6. This would help those who fundamentally need the money the most and strengthen child care in the country.

The Caledon Institute actually produced a short paper on the winners and losers under the new plan and it is worth a read.