Mythical Increases in the Child Tax Credit

Mythical Increases in the Child Tax Credit - 1992

The Child Benefit
A White Paper on Canada's New Integrated Child Tax Benefit

This document is the most dishonest government document I've seen in the past 15 years.I think it should be nominated for the "Winston Smith Award" Winston Smith was that poor character in 1984 who worked at the Ministry of Truth rewriting history. He spent much of the book trying to find new razor blades which he couldn't find despite the pronouncements from the Ministry of Plenty that production targets for blades had been exceeded.

The "Child Tax Benefit" was announced in the budget of 1992. It came about by combining three pre-existing programs for families with children; Family Allowance, Refundable Child Tax Credit and the Child Credit (formerly a tax deduction).

The Child Benefit System as it Existed in 1991 and the Child Tax Benefit Proposed as part of the 1992 Budget.
	1991	1992
Existing Program
Family Allowances	$35 per month or $419 per year
Refundable Child Tax Credit	$601 max per child per year reduced for families with incomes over $25,921
Child Credit	$71 per child off income taxes
	Value to a family that does not pay income taxes $1,020 ($419 + $601)
Proposed Program
Child Tax Benefit		$1,020 maximum reduced for families with incomes over $25,921

You should see two things from this table: - to families with no earnings, those relying on social assistance, workers compensation or unemployment insurance, there is no increase in support; it was $1,020 before and remains $1,020. These families received $419 from Family Allowance ($35 per month) and $601 from the Child Tax Credit; the new cheque would be generally $85 per month. - the only change is that instead of the support being partly delivered in a monthly cheque and some of it annually then under the new Child Tax Benefit it would all be delivered monthly.

How does the "White Paper" describe these changes?
"Lower-Income families with one child will receive a monthly payment of up to $144, significantly more than the monthly payment of $35 they now receive."

This leaves the distinct impression that her monthly support has increased from $35 to $144 for an increase of $109; or $1,299 per year. The apparent increase is because a program which used to send annual cheques is now sending monthly cheques - of course, the monthly cheques increase.

If this low-income single mother relies on welfare, her level of support does not increase one cent. Family allowance had provided $419 annual and with the $601 from the Refundable Child Tax Credit amounted to $1,020 the same amount as was to be provided under the new scheme. She gets the same amount - imagine the cruel hoax as she reads the media coverage of the budget and plans how she will spend the extra money - shoes, ... She will likely never now how she was duped.

In this analysis I have ignored inflation, in fact she can not expect to buy in 1992 what $1,020 bought in 1991 - she lost about $15 to inflation.bsp; Nowhere in the "White Paper" is this deceit acknowledged.

The white paper is not satisfied with this deception; it goes further. "Approximately two million families with incomes below $50,000 will receive larger monthly payments than they do now." Again leaving the impression that vast numbers of lower-income families will receive additional support.

These graphs continue to weave the myth that support is increasing for low-income families. Again, the size of monthly cheques is increasing because the annual cheques are being eliminated.

Before leaving these graphs, we must note footnote 1 (hard to see on the graph) - "This comparison excludes present benefits under the child credit and refundable child tax credit which are not delivered monthly." The basis of the scam was obviously known to the authors; in fact, this footnote is likely their nod in the direction of intellectual integrity - we hid nothing - the graphs were factually correct. The nuance reminds one of small print which accompanies glossy adds - "may not be exactly as shown", "quantities may be limited", "some restriction apply".

Appearances before the Committees of the House of Commons

The following exchange takes place before a committee.

An M.P. is trying to get the government to admit that there is no increase in support for low-income families.

Mr. Karpoff: Your officials and your parliamentary secretary have confirmed that people earning less then $3,750 will receive no more under this plan. ...
Mr. Mazankowski: The difference with this program is that they won't have to wait until the end of the year or go to a tax discounter to get their money.
...

Mr. Karpoff: But they will get no more.
Mr. Mazankowski: From family allowance, their monthly cheque will increase from $35 to $85.

Mr. Karpoff: But they'll get no more money in a year. Is that not true?

...
[here an official runs to the rescue of his trapped Minister]
...

Finance Official, Department of Finance: "If I could add this, you're quite right on the actual total dollars; there isn't more. However, what's really quite important here and one of the interesting features of this program, and one of the reasons it's such a gem from a bureaucrat's point of view, is that it delivers assistance in a very timely way to the people who need it ..."

This White Paper is the most deceitful document I have seen in Ottawa. Even a Conservative back-bencher who supported the government's policy shifts would not defend the White Paper when I said it was "inadequate" (a very mild word indeed but I was in front of a Legislative Committee).

Mr. Shillington: You would agree with me that these 12 pages [the White Paper] are inadequate for a full discussion of the implications of the proposals.
Mr. Johnson: I don't necessarily disagree with that.
(Legislative Committee on C-80, July 16, 1992)

One could also, though, value the contribution of the White Paper not on its ability to inform but on the numbers produced. These officials are boasting about their publication record before a committee of the House of Commons.

Finance Official: We have mailed out 350,000 copies of the white paper that we tabled at the time of the February Budget, which probably, in terms of white
papers, makes it a runaway best seller. ...
...
Health and Welfare Official: The intent [of the white paper] was to inform Canadians of the changes. (Standing Senate Committee on Social Affairs,
Science and Technology, Oct. 7, 1992).

And Major Media spread the Lies even Further

" ... reforms will sharply raise support for low-income families with children. The plan will allow Ottawa to make monthly payments of up to $144 for each child in a low-income family, four times the current family allowance. About two million families with incomes below $50,000 a year will receive larger monthly payments than they now do."
Editorial, Globe and Mail, Feb. 26, 1992.

This portion of the Globe and Mail editorial from the next day after the budget demonstrates a number of points:
- Canada's national newspaper accepted the deception from Health and Welfare without question using the same words.
- Readers of Canada's national newspaper were also exposed to the dishonest analysis of Health and Welfare.

Conclusion:

Three Versions of the Truth about the 1992 Child Tax Benefit:

As told to, a repeated by the media and the public through 350,000 copies of the White Paper. As discussed before a Commons Committee As admitted by a Government M.P.

"Lower-Income families with one child will receive a monthly payment of up to $144, significantly more than the monthly payment of $35 they now receive." "... you're quite right on the actual total dollars; there isn't more." Mr. Shillington: "You would agree with me that these 12 pages [the White Paper] are inadequate for a full discussion of the implications of the proposals."
Mr. Johnson: "I don't necessarily disagree with that."

More information on the Child Tax Credit

Richard Shillington
Feb. 15, 1999

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