Prime Minister Stephen Harper has announced a new "family tax cut," a version of the family income-splitting promise he made during the 2011 federal election, along with increases to monthly child care benefit cheques and to the amount taxpayers can deduct for child care expenses.
The tax cut comes in the form of a non-refundable federal tax credit — meaning it will have no effect on provincial income taxes — and is capped at $2,000.
Harper made his announcement at a campaign-style event Thursday at a community centre north of Toronto. He was joined by Finance Minister Joe Oliver and other Conservative MPs, including several from the Toronto area.
The prime minister also announced a boost to the universal child care benefit, to $160 a month per child up to age six from the current $100 per month, and is introducing a credit of $60 per month for children aged six to 17 years.
The new benefits go into effect on Jan. 1, 2015, but the government will wait until July to make the first payments and make them retroactive.
That means every Canadian family with children under 18 is set to receive $420 per child just three months ahead of the next scheduled federal election — plus regular monthly cheques as the campaign nears.
The enhanced UCCB would replace the existing Child Tax Credit, starting in the 2015 tax year. The Child Tax Credit is a non-refundable tax credit which allows parents to claim a certain amount per child under the age of 18.
Harper's 2011 promise on income splitting was contingent on a balanced budget, a goal that will officially be met with next spring's budget and one that many observers believe is already a fact.
The 2011 proposal promised couples the ability to transfer up to $50,000 from one spouse or partner to the other to take advantage of lower tax brackets, a move the government projected would cost $2.7 billion per year.
