Social Policy in Ontario

Stephen Harper reinvents the welfare state

Posted on April 2, 2015 in Governance Policy Context

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TheStar.com – News/Canada – A third of the money for the child-care benefit goes to families who don’t use daycare, but the Conservatives didn’t dictate how the money had to be spent.
Apr 01 2015.   By: Thomas Walkom, National Affairs

Critics seem surprised that most of the money Ottawa plans to spend on child care won’t go to child care. They shouldn’t be. That was never the point.

Tuesday’s report by the Parliamentary Budget Office stated what should have been obvious: about a third of what Ottawa spends on its Universal Child Care Benefit already goes to families who don’t need or use daycare.

The report estimates that when the benefit is expanded this year to include all children under 18, a little over half will go families who don’t need or use daycare.

But then this program was always related only tangentially to the daycare needs of working parents with young children.

When Stephen Harper’s fledgling government introduced the scheme in 2006, the aim was twofold.

First, the Conservatives wanted to do something popular. Cutting cheques for voters with children fit the bill.

In effect, Harper had reinvented the old Family Allowance, or baby bonus, scheme that from 1945 to 1989 awarded every Canadian family a per-child cash payment.

More importantly, the Harper government wanted to ensure that the alternative to the baby bonus — a comprehensive, publicly funded, national child-care program — never saw the light of day.

Successive Liberal and Progressive Conservative governments had flirted with the idea of involving the state in child care. But to the Harperites, this was ideological anathema.
So, they determined to use up as much of the available money as possible by giving cash directly to parents.

The amount involved, initially $100 a month per child under the age of 6, was never enough to cover daycare costs. The average cost of child care in Canada is more than $300 a month.

But it was enough to put a hole in government revenues. The Conservative scheme boosted Ottawa’s spending by about $2.7 billion in 2006. The expanded benefit ($160 a month per child under 6 and $60 a month for those aged 6 to 17) will bring the costs of the program to well over $7 billion this year.

If the Parliamentary Budget Office’s estimates are correct, just over half of that amount will go to families whose children (perhaps because they are teenagers) don’t need or use daycare.

Is that a misuse of funds? If the Conservative child-care benefit is supposed to deliver child care, the answer is yes.

But from the beginning, the government has never tried to limit how this particular benefit was to be spent. The rules are simple: You have a child; Ottawa sends you money.

Whether you choose to spend that money on babysitting or champagne is up to you.

Think of it as a $7 billion a year tax-and-spend program: The government taxes everyone and then spends some of the proceeds on families with kids.

There is something to be said for a program like this. Because it is universal, it has political staying power.

As the New Democrats used to argue in the ’80s (when they were trying to prevent the original baby bonus scheme from being scrapped), social programs targeted at the poor are easy to cut. But the middle classes balk when government tries to eliminate entitlements that they too receive.

Yet, as the budget office report points out, the Harper benefit is also progressive. All parents get money. But the amounts are subject to the progressive income tax — which means that well-to-do recipients end up giving a good portion back.

In effect, the misnamed child-care benefit is a universal yet progressive multibillion dollar social program. In a strange way, Harper is inadvertently rebuilding the welfare state.

It would be better if the program’s name more accurately reflected reality. Perhaps it could be called the Politically Popular Family Subsidy, since that it what it is.

Meanwhile, some government some time is eventually going to have to do something about child care.

Tom Mulcair’s New Democrats have a plan they say will cost $5 billion annually. With luck, if elected to power this year, they will be able to find the money somewhere.

< http://www.thestar.com/news/canada/2015/04/01/stephen-harper-reinvents-the-welfare-state-walkom.html >

Tags: budget, child care, globalization, ideology, participation, privatization, standard of living

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