Evidence of meeting #82 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tfsa.
A recording is available from Parliament.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
What was the figure you said was the augmentation? Was it $1,900 and how much?
10:50 a.m.
Director General, Social Policy, Department of Employment and Social Development
There are two types of augmentation. The first is for children six and under, so the amount goes from $100 to $160 per month. The second increase is for children from the ages of seven until just under eighteen, and that amount is now $60 a month.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Obviously, $160 a month is not meant to pay for child care, because no one would put their kid in a space that cost $160 a month. It obviously wouldn't meet any standard.
How many child care spaces...? It was mentioned in the 2011 platform with respect to TFSAs. Also in that platform was the commitment by the Prime Minister to create 125,000 child care spaces. Do we know how many have actually been created since that time?
10:50 a.m.
Director General, Social Policy, Department of Employment and Social Development
There is money transferred through the CST to provinces. The provinces are responsible for creating those spaces, so again I would refer you to the public investments in child care publication.
In practice it's hard to separate what the federal contribution is in relation to the provinces' expenditures in this area because, as you know, the CST is a block transfer.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
So the government's position is that we spend the money, but we don't track whether the provinces actually create child care spaces.
10:50 a.m.
Director General, Social Policy, Department of Employment and Social Development
As I said, that amount is transferred through the Canada social transfer and that's a block transfer.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I understand, but my question is, does the government actually track whether the money creates child care spaces?
10:50 a.m.
Director General, Social Policy, Department of Employment and Social Development
The nature of the block transfer doesn't permit us to and it would be up to the provinces to notify us.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I want to talk about income splitting for a moment. What is the first-year cost of income splitting for this year's budget?
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
The cost reported for 2014-15 is $2.4 billion. That includes five quarters, because of accounting. On a yearly basis, for 2015-16 it's about $1.9 billion.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
That first year the cost is a little bit higher because of that extra quarter that's been added. Was this done, in a sense, not retroactively but in such a way that the legislation could apply within this taxation year?
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
Yes.
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
It was $2 billion.
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
It's in this budget document. We can check, but I think it was $2 billion.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
It was $1.9-odd billion, almost exactly the same amount. So we ran a deficit to pay for income splitting if you look at it dollar for dollar.
Does the department have any estimate on who will benefit by income?
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
The family tax cut was part of a broader package for families.
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
Typically when we provide briefings to the minister and advice to the minister on any measure we look at, we provide as part of any other calculations income distribution, and that is part of the advice to the minister and it's up to the government to decide what to release from there.
10:50 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
The PBO has estimated that for the lowest 20% of Canadian earners, the impact of income splitting will be “near zero”.
Is that what the department analysis showed for income splitting?
10:50 a.m.
Conservative
10:50 a.m.
Director, Personal Income Tax, Tax Policy Branch, Department of Finance
I can't respond to that, because, as I said, this is advice that has been provided to a minister. It hasn't been made public.
10:50 a.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
I have a quick question to follow up on the income splitting.
The PBO has done a report in which he mentions the middle-class beneficiaries of income splitting, those with an income level of between $60,000 and $120,000. Can you share with us what percentage of beneficiaries of income splitting will be in the middle-income tier?
