(February 28 – 16:00 ET) – The 2000 budget is proposing a five-year plan to increase the Canadian Child Tax Benefit by $2.5 billion annually. Effective January 2000, CCTB parameters will be fully indexed.
The indexation factor for a given tax year is based on the change in the consumer price index over the 12-month period ending Sept. 30 in the preceding year. This is the same method that Ottawa plans to use to index the tax bracket thresholds.
The CCTB thresholds will also follow any increases in the tax brackets. The threshold at which the CCTB base benefit begins to be reduced will be set equal to the middle tax bracket threshold.
In July 2000, the CCTB base benefit will increase by $70 per child. By July 2001, the National Child Benefit supplement for low-income families will be increased by $200 per child. For a two-child family with an income of $60,000, benefits will increase from the pre-budget level of $733 to $967 in July 2001 and $1,541 in July 2004.
Ottawa estimates that changes to the CCTB will increase the maximum benefit for the first child to $2,056 in July 2000 and $2,265 in July 2001. The federal government’s goal by 2004 is to raise the CCTB maximum for the first child to $2,400, and to $2,200 for the second child.
-IE Staff