"As hon. members know the only realistic alternative to discretionary increases is the full indexation of the child tax benefit. While the government fully supports the broader goal of increasing assistance to families with children, let us not forget that with an inflation rate of 1.6% per year, restoring full indexation of the child tax benefit would cost the federal government about $160 million per year."

The government, we are told, supports the goal of increasing assistance. But before we discuss increasing assistance shouldn't we stop the erosion. In the midst of all the fine words about the $850 million reducing child poverty the cost of full-indexation is too great a price. Can you suck and blow at the same time?

The figure mentioned, $160 million per year, puts the promised government spending increases in a new light. They promise $1.7 billion by the end of their mandate. They were elected in 1993; an increase of $1.7 billion over 8 or 9 years against a steady erosion of about $160 million per year. Almost all their promised new money will be eaten up by inflation. How much of this is new money?

Why is fully indexing the child benefit such a difficult proposal when the seniors benefit is indexed to inflation?

Excerpts on the debate on the private members, (with my commentary)

Full text of debate on the private members bill - Nov. 19, 1997

Full text of debate on the private members bill - Feb. 5, 1998

The most eloquent statement for full-indexation was penned some 8 years ago by Liberal members of the Finance Committee when discussing the indexation of the GST credit.

"Virtually all social groups were unanimous that the lack of full indexation of the refundable tax credits will make an already unfair GST system even more unfair over time:"

"In response to these concerns the Finance Minister has replied that the protection for low-income Canadians does not need to be fully indexed to inflation because the government, if necessary, would adjust the credits and the thresholds to protect the poor."

"The Liberal Members of the Finance Committee simply cannot believe this assurance. If the government really intended to fully protect the poor from inflation by adjusting the credits and the thresholds, then there is no reason not to fully index the protection for the poor in the first place, unless of course the Conservative government intends to shift even more of the GST burden onto low- income Canadians in the future. The Liberal Members cannot support this Conservative attempt to increase taxes on the poor."

Liberal Minority Report, Report on the Technical Paper on the Goods and Services Tax, November 1989

Letter to the Editor published in Ottawa Citizen - March 23, 1998

Richard Shillington
Feb. 7, 1998

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