Archived - The National Child Benefit Progress Report 2006 - Pamphlet

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What is the National Child Benefit?

The National Child Benefit (NCB) is a joint initiative of Canada's federal, provincial and territorial governments, with a First Nations component, that aims to help prevent and reduce the depth of child poverty, support parents as they move into the labour market, and reduce overlap and duplication between government programs.

How the NCB Works

The NCB combines two key elements: monthly payments to low-income families with children; and benefits and services designed and delivered by the provinces, territories and First Nations to meet the needs of low-income families with children in each jurisdiction.

The Government of Canada contributes to the NCB initiative through a supplement to the base benefit of the Canada Child Tax Benefit (CCTB). This additional payment is called the NCB Supplement. It provides extra support to low-income families with children by increasing their monthly CCTB payments.

Provinces and territories have the flexibility to adjust social assistance or child benefit payments by an amount equivalent to the NCB Supplement. First Nations follow the approach of the relevant province or territory. As a result, families with children on social assistance maintain at least the same level of benefits, while funds resulting from adjustments support programs benefiting low-income families with children.

In all jurisdictions, no family receiving social assistance experienced a reduction in its overall level of income support as a result of the NCB.

Lowering the “Welfare Wall”

Before the NCB, moving from social assistance into a paying job often meant only a minimal increase in family income for low-income parents. It could also mean a loss of other valuable benefits, including health, dental and prescription drug benefits. As a result, families could find themselves financially worse off in low paying jobs as compared with being on welfare-a situation known as the “welfare wall”.

The NCB works to reduce the welfare wall by providing child benefits outside of social assistance and ensuring that enhanced benefits and services continue when parents move from social assistance to paid employment.

Monitoring the NCB’s Progress

In 1998, Canada's Federal/Provincial/Territorial Ministers Responsible for Social Services introduced the NCB initiative. The National Child Benefit Progress Report: 2006 is a key element of the National Child Benefit Governance and Accountability Framework. It fulfills the commitment of Federal/Provincial/Territorial Ministers Responsible for Social Services to report annually to Canadians on the progress made under this initiative.

This eighth report provides an update on the progress the NCB is making in improving the economic well-being of low-income families with children. The report examines both societal level indicators, which track socio-economic trends that relate to the NCB, and direct outcome indicators, which identify the direct impact of the NCB on families with children.

The report shows that the proportion of families with children living in low income decreased from a peak of 17.6 percent in 1996 to 11.6 percent in 2004, based on Statistics Canada’s post-tax Low-Income Cut-Offs (LICOs). During this period, the number of children living in low income decreased from 1.3 million in 1996 to 877,400 in 2004, a decrease of approximately 426,600 children.

The report also identifies the direct impact of the NCB in preventing and reducing low income among families with children. Using the most recent available data on the post-tax LICOs, the analysis estimates that in 2004, as a direct result of the NCB, 125,000 children in 59,000 families were prevented from living in low income, a reduction of 12.1 percent. These families saw their average disposable income increase by an estimated $2,400, or 9.3 percent. For those families with children who remained in low-income situations, the NCB reduced the low-income gap by 18.5 percent.

The Government of Canada’s Contribution to Increasing Benefits for Canadian Families

Since the NCB was introduced in 1998, the Government of Canada has steadily increased its investment in children and their families through the base benefit of the CCTB and the NCB Supplement.

In 2005-2006, the Government of Canada invested $9.3 billion through the CCTB system (the base benefit of the CCTB plus the NCB Supplement) to support low- and middle-income families with children. Of this amount, investments for low-income families with children are estimated to total $6.9 billion to support 1.6 million low-income families with 2.8 million children. This includes $3.2 billion through the NCB Supplement and $3.7 billion through the base benefit of the CCTB.

To support middle-income families with children, the Government of Canada invested a further $2.4 billion through the base benefit of the CCTB to support another 1.8 million middle-income families with 3.3 million children.

When combining the base benefit of the CCTB and the NCB Supplement, the annual level of federal child benefits that low-income families with two children were eligible to receive reached $6,312 in July 2007.

Maximum Levels of Federal Child Benefits for 1996-1997 and 2007-2008 Program Years (July to June) in Current Dollars*
Number of Children 1996-1997
Maximum CTB+WIS**
2007-2008
Maximum Base Benefit +
NCB Supplement
Percentage Increase from 1996-1997 to 2006-2008
1 $1,520 $3,271 115%
2 $2,540 $6,312 149%
3 $3,635 $9,358 157%
4 $4,730 $12,404 162%

* Current dollars are in actual dollars in a given year, and are not adjusted for inflation.

** CTB - Child Tax Benefit; WIS - Working Income Supplement.

Provincial/Territorial Contribution to the NCB

Provinces and territories have the flexibility to adjust social assistance or child benefit payments by an amount equivalent to the NCB Supplement. This allows families on social assistance to maintain the same level of benefits, while provinces and territories can use the additional funds for new or enhanced programs benefiting low-income families with children.

Since the introduction of the NCB initiative, a number of approaches to adjusting social assistance and child benefits have evolved.

It is estimated that provinces and territories reinvested and invested a total of $813.4 million in 2005-2006 in programs and services in six main areas:

Child-/day-care initiatives-to help low-income families cover extra child care costs incurred when working.

Child benefits and earned income supplements-to provide low-income families with more money so parents can stay in jobs working toward higher wages.

Early childhood services and children-at-risk services-to help children get a healthy start in life by providing support to low-income families when their children are very young.

Supplementary health benefits-so that families can keep important health benefits when they move from welfare to work.

Youth initiatives-to assist and support youth, with particular attention to youth-at-risk. Youth initiatives range from alcohol and drug strategies to transitional support for youth leaving child welfare.

Other NCB programs, benefits and services-other programs and services as determined by individual jurisdictions.

First Nations and the NCB Initiative

Like provincial and territorial governments, First Nations have the flexibility to reinvest savings from adjustments made through social assistance into programs and services tailored to meet the specific needs and priorities of the individual community. This flexibility allows the First Nations to implement projects that are culturally-relevant and responsive to the unique needs of each community, and that reduce the incidence and depth of child poverty.

For 2005-2006, it is estimated that First Nations reinvestments and investments were $58.0 million. NCB reinvestment projects for First Nations are categorized in five key areas:

  • home-to-work transitions;
  • cultural enrichment;
  • child nutrition;
  • child care; and
  • support to parents.

Citizenship and Immigration Canada

CIC reinvested an estimated $2.5 million in 2005-2006 to support refugee families with children in receipt of income support benefits under the Resettlement Assistance Program (RAP).

The Way Ahead

The NCB initiative is a key component of an integrated child benefit system. This system has resulted in a stronger national platform of child benefits, along with additional benefits and services provided at the provincial, territorial and First Nations levels. These reinvestments and investments in programs and services for low-income families with children are estimated to be $873.9 million in 2005-2006.

Annual federal support delivered through the CCTB system including the NCB Supplement is projected to reach $9.5 billion per year by 2007-2008.

Federal, provincial and territorial governments and First Nations will continue to work toward improving the situation of families with children in Canada and will keep Canadians informed of the progress being made.

For further information please see the National Child Benefit website at: www.nationalchildbenefit.ca.


1 The Government of Quebec has stated that it agrees with the basic principles of the NCB. Quebec chose not to participate in the NCB because it wanted to assume control over income support for children in Quebec; however, it has adopted a similar approach to the NCB. Throughout this pamphlet, references to joint federal/provincial/territorial positions do not include Quebec.

2 The CCTB is made up of two components: the base benefit, which is paid to low- and middle-income families with children, and the NCB Supplement, which is an additional benefit paid to low-income families with children.

3 For a complete description of provincial/territorial social assistance adjustments/reinvestment models, please see The National Child Benefit Progress Report: 2006 or the NCB website at: www.nationalchildbenefit.ca

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