Archived – The National Child Benefit Progress Report 2007

Archived information

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Chapter 1
The National Child Benefit Supplement

The National Child Benefit (NCB) is a joint initiative of federal, provincial and territorial governments to support Canadian children living in low-income families. The NCB initiative has three goals:

  • to help prevent and reduce the depth of child poverty;
  • to promote attachment to the labour market by ensuring that families will always be better off as a result of working; and,
  • to reduce overlap and duplication by harmonizing program objectives and benefits, and through simplified administration.

The initiative recognizes that both income support and a range of benefits and services are critical to sustained success in reducing low income.

How the NCB Works

Before the NCB was introduced in 1998, there was minimal coordination between the federal system, which delivered child benefits through the income tax system, and provincial/territorial systems, which delivered child benefits through social assistance programs. The NCB initiative integrates federal, provincial and territorial systems of income support for children into a national platform of child benefits available to families on social assistance and low-income working families.

Before the NCB initiative, child benefits embedded in social assistance payments to parents were “needs-tested,” and their value increased with family size. By contrast, the income of a low-wage working family did not increase with family size. Families on social assistance who found paid work often saw their overall disposable income increase only slightly, and in some cases even saw a decline. Further, some families lost access to benefits and services available to people receiving social assistance such as extended drug, dental and optical benefits. Working families leaving social assistance also needed to pay taxes and employment-related costs out of their typically low wages.

This interaction between the labour market and government programs is commonly known as the “welfare wall”—a set of disincentives to labour force participation. The NCB is intended to help lower this welfare wall to ensure that families leaving social assistance are better off as a result of working. It is designed to support parents leaving social assistance for work, and to help low-income parents already in the labour market to stay there by reducing the role of social assistance in providing children’s basic income support.

Through the NCB initiative, federal, provincial and territorial systems of income support for children have been integrated to build a national platform of income-tested child benefits available to both social assistance families and low-income working families. The NCB initiative combines two key elements: federal 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 provides monthly payments to low-income families with children through the NCB Supplement to the Canada Child Tax Benefit (CCTB) paid on a monthly basis. The NCB Supplement has increased incrementally since the inception of the initiative. Most provincial and territorial governments concurrently reduced the child portion of social assistance benefits by the full or partial amount of the NCB Supplement without impacting families’ overall income. Over time, the effect has been to displace an increasing proportion of child-related basic income support provided through social assistance.

Provinces and territories have the flexibility to adjust social assistance or child benefit payments by an amount equivalent to the NCB Supplement. Provinces, territories and First Nations reinvest these social assistance savings and invest additional funds in benefits and services for low-income families with children. These reinvestments and investments are discussed in detail in Chapter 2. Since the inception of the NCB initiative, three distinct approaches have evolved by which provinces and territories replace social assistance benefits for children with the NCB Supplement. These approaches are also described in Chapter 2.

The following image is not compliant with the Web Accessibility Guidelines. A descriptive text follows the image.

Figure 1 – How the NCB Works
Figure 1: A text description follows the figure
Text description of Figure 1

A Venn diagram illustrates the relationship between the Canada Child Tax Benefit (CCTB) and the National Child Benefit (NCB).

The diagram is composed of three circles aligned horizontally. The left circle illustrates the base benefit of the CCTB, provided to both low- and middle-income families with children. In 2006-2007, the Government of Canada provided $5.9 billion through the base benefit of the CCTB.

The middle circle illustrates the NCB Supplement, provided to low-income families with children. It shows that in 2006-2007, the Government of Canada provided $3.5 billion through the NCB Supplement. The NCB Supplement, combined with the base benefit of the CCTB, comprise the CCTB system. The NCB Supplement is also part of the NCB initiative.

The right circle illustrates the NCB reinvestments and additional investments by provinces, territories and First Nations. This circle overlaps with the NCB Supplement. The area of overlap is the provincial, territorial and First Nations reinvestments, which were $652.4 million in 2006-2007. The remainder of the circle represents additional investments by provinces, territories and First Nations, which were $181.2 million in 2006-2007.

The History of Federal Child Benefits in Canada

1918 - Child Tax Exemption: This exemption provided income tax savings that increased as taxable income increased. It did not provide benefits to families that did not have a tax liability.

1945 – Family Allowance: This benefit was provided to all Canadian families with dependent children.

1973 – The Family Allowance benefits were tripled, indexed to the cost of living, and made taxable.

1978 – Refundable Child Tax Credit: This targeted and income-tested child benefit, which was delivered through the tax system, provided a maximum benefit to low-income families, a declining amount to middle-income families, and no benefit to upper-income families.

1993 – Child Tax Benefit (CTB): This benefit consolidated refundable and non-refundable child tax credits and the Family Allowance into a monthly payment based on the number of children and level of family income. It also included the Working Income Supplement (WIS), which provided an additional benefit to low-income working families with children. In 1993, federal expenditures on child benefits, including WIS, totalled $5.1 billion.

1998 – The CTB was replaced by the Canada Child Tax Benefit (CCTB). The National Child Benefit (NCB) Supplement replaced the WIS, and is provided to all low-income families as part of the new CCTB.

2006 – The Government of Canada introduced the Universal Child Care Benefit (UCCB). All families, including low-income families, are receiving $100 a month for each child under the age of six, taxable in the hands of the lower-income spouse.

2007 – Budget 2007 announced a new Child Tax Credit which provides additional tax relief for families with children. For 2008, this tax credit provides up to $306 in tax savings for each child under the age of 18.

The Government of Canada’s Contribution to the NCB Initiative

Since July 1998, the Government of Canada has provided direct financial assistance to families with children through the CCTB. The CCTB is designed to help families with the costs of raising children and takes the form of a non-taxable monthly payment for families with children, based on a family’s net income and the number of children within the family.

The CCTB system is made up of two components: the CCTB 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. The NCB Supplement to the CCTB base benefit represents the Government of Canada’s contribution to the NCB initiative. Eligible Canadian families with children receive the CCTB base benefit and the NCB Supplement through a single monthly payment. Between July 2006 and June 2007, approximately 3.4 million families with 6.0 million children received the base benefit of the CCTB. Between July 2006 and June 2007, 1.5 million families with 2.8 million children received the NCB Supplement.

Families’ eligibility for CCTB and NCB child benefits is determined by family income. Figure 2 illustrates the CCTB structure for families with two children as of July 2007. During the 2007-2008 benefit year (from July 2007 to June 2008), two-child families with net incomes less than $20,883 received the maximum benefit level of $6,312. All families in receipt of the NCB Supplement receive the maximum level of the base benefit of the CCTB. Families with net incomes above $20,883 but below $37,178 continue to receive the maximum level of the base benefit of the CCTB, but the level of NCB Supplement to which they are entitled decreases as family income increases. Finally, those families with net incomes above $37,178 receive only the base benefit of the CCTB. The level of this benefit also decreases as family income increases, and is fully phased out at $101,328.

The following image is not compliant with the Web Accessibility Guidelines. A descriptive text follows the image.

The Canada Child Tax Benefit for a Two-Child Family: July 2007 to June 2008
Figure 2: A text description follows the figure
Text description of Figure 2

A graph represents the maximum Canada Child Tax Benefit (CCTB) base benefits and the NCB Supplement for the benefit year July 2007 to June 2008, for a family with two children. The amount of the benefit is on the y axis and net family income is on the x axis.

The graph shows that a two-child family with a net income of up to $20,883 receives the maximum amount of the CCTB base benefit and the NCB Supplement, for a total benefit of $6,312.

Two-child families with a net income above $20,883 continue to receive the maximum CCTB base benefit, while the amount of NCB Supplement gradually decreases, from its maximum at $20,883 net family income to no NCB Supplement at $37,178 net family income.

Two-child families with a net income above $37,178 continue to receive the CCTB base benefit, although the amount of that benefit gradually decreases. No benefit is paid to two-child families with a net income above $101,328.

Net-Family Income Basic Benefit NCBS
- 2,566 6,312
20,883 2,566 6,312
37,178 2,566 2,566
101,328 - -

Increased Federal Financial Assistance for Families with Children

The Government of Canada has significantly increased its investments in supporting low-income families with children since the implementation of the NCB initiative. Figure 3 shows the increase in the value of annual federal expenditures on low-income families with children through the CCTB system from 1995–1996 to 2008-2009.

Prior to the NCB, federal spending through the former Working Income Supplement (WIS) was $300 million in 1995–1996. As its initial contribution to the NCB initiative, which replaced the WIS, the Government of Canada committed $850 million to the NCB Supplement, in addition to the $5.1 billion per year that had been provided under the former Child Tax Benefit. Additional investments in the program were announced in subsequent years, including the restoration of full indexation of benefit levels in 2000 to ensure that benefit increases are not eroded by inflation. Federal investment in the NCB Supplement has increased steadily and is projected to reach $3.6 billion in 2008-2009. In addition, federal investment provided to low-income families with children through the base benefit of the CCTB has increased over this period. In 2008-2009, 3.1 billion is projected to be provided to NCB Supplement recipients through the CCTB base benefit, compared to $2.6 billion in 1995-1996. Footnote 4

The following image is not compliant with the Web Accessibility Guidelines. A descriptive text follows the image.

Text version of Figure 3 – Federal Investments for Low-income Families in Receipt of Both the CCTB Base Benefit and the NCB Supplement for Program Years (July to June)
Figure 3: A link to the description follows the figure
Text description of Figure 3
CCTB Base Benefit NCB Supplement Reference a is located after the table
1995-1996 2.6 0.3
1996-1997 2.6 0.3
1997-1998 2.6 0.5
1998-1999 2.6 1.1
1999-2000 2.7 1.5
2000-2001 2.8 1.9
2001-2002 3.1 2.5
2002-2003 3.3 2.4
2003-2004 3.5 2.7
2004-2005 3.6 2.9
2005-2006 3.7 3.2
2006-2007 3.6 3.5
2007-2008 3.6 3.5
2008-2009 Reference b is located after the table 3.1 3.6
2009-2010 3.2 3.7
  • Reference a from the above table Includes the former Working Income Supplement for the years 1995-1996 to 1997-1998.
  • Reference b from the above table Figures for 2008-2009 are projections.
  • Source from the above table Source: CCTB administrative data from the Canada Revenue Agency (January 2009).

Canadian families with children have benefited significantly from increases to the base benefit of the CCTB and the NCB Supplement.  As Figure 4 shows, prior to July 1997, the maximum benefit for a family with two children was $2,540. In July 1997, when the WIS was enhanced and restructured, prior to the launch of the NCB, the maximum benefit for a two-child family was $3,050. In 2003, the Government of Canada announced a five year investment plan.  Most recently, the NCB Supplement increased incrementally by $185 per child annually in July 2006. Annual cost of living increases to the NCB Supplement have continued.

The following image is not compliant with the Web Accessibility Guidelines. A descriptive text follows the image.

Figure 4 – Maximum Levels of Federal Child Benefits for Two-Child Families for 1995-1996 to 2008-2009 Program Years (July to June) in Current Dollars
Figure 4: A text description follows the figure
Text description of Figure 4

A line graph illustrating the maximum levels of federal child benefits for two-child families.

Total - Two child Family 1st Child 2nd child
1995-1996 Reference b is located after the table $2,540
1996-1997 Reference b is located after the table $2,540
1997-1998 Reference b is located after the table $3,050
1998-1999 $3,050 $1,625.00 $1,425.00
1999-2000 $3,410 $1,805.00 $1,605.00
2000-2001 $3,956 $2,081.00 $1,875.00
2001-2002 $4,544 $2,372.00 $2,172.00
2002-2003 $4,682 $2,444.00 $2,238.00
2003-2004 $5,055 $2,632.00 $2,423.00
2004-2005 $5,222 $2,719.00 $2,503.00
2005-2006 $5,680 $2,950.00 $2,730.00
2006-2007 $6,175 $3,200.00 $2,975.00
2007-2008 $6,312 $3,271.00 $3,041.00
2008-2009 $6,431 $3,332.00 $3,099.00
  • Reference a from the above table Current dollars are in the actual dollars in a given year, and are not adjusted for inflation.
  • Reference b from the above table Includes the former Working Income Supplement for the years 1995-1996 to 1997-1998.

As of July 2008, low-income families with children (whose family net income is equal to or below $21,287) receive maximum annual CCTB benefits (base benefit of the CCTB and NCB Supplement) of $3,332 for the first child and $3,099 for the second child, bringing the amount of total federal child benefits for a family with two children to $6,431, or more than double that of the pre-NCB 1996–1997 levels (see Table 1). An additional $91 per year for third and subsequent children brings total maximum benefits to $3,102.

An on-line CCTB calculator to determine the amount of benefits families are entitled to is provided by the Canada Revenue Agency at:
web site of Canada Revenue Agency

Table 1 - Maximum Levels of Federal Child Benefits for 1996-1997 and 2008-2009 Program Years (July to June) in Current Dollars Reference a is located after the table
Number of Children 1996-1997
Maximum CTB+WIS
2008-2009
Maximum Base Benefit +
NCB Supplement
Percentage Increase
from 1996-1997
to 2008-2009
1 $1,520 $3,332 119%
2 $2,540 $6,431 153%
3 $3,635 $9,533 162%
4 $4,730 $12,635 167%
  • Reference a from the above table Current dollars are in the actual dollars in a given year, and are not adjusted for inflation.

Federal Investment in the NCB Supplement by Province and Territory

Table 2 shows the breakdown of federal expenditures on the NCB Supplement and the number of children who benefited by province and territory for 2005-2006 and 2006-2007. As shown in Table 2, federal expenditures on the NCB Supplement have increased from $3.2 billion in 2005-2006 to $3.5 billion in 2006-2007. Federal expenditure increases reflect the five-year investment plan put in place by the 2003 Budget.

Table 2 - Number of Children in Receipt of the NCB Supplement and Federal NCB Supplement Expenditures by Jurisdiction for 2005-2006 and 2006-2007 Program Years (July to June) in Current Dollars Reference a is located after the table
July 2005 - June 2006 July 2006 - June 2007
Jurisdiction Children
Receiving NCB
Supplement
Benefits paid Children
Receiving NCB
Supplement
Benefits paid
(thousands) ($ millions) (thousands) ($ millions)
Newfoundland and Labrador 47.8 57.1 46.0 58.0
Prince Edward Island 12.9 14.3 12.7 15.5
Nova Scotia 86.7 104.0 83.9 111.9
New Brunswick 69.3 82.2 67.6 88.5
Quebec 635.8 730.0 641.6 813.5
Ontario 1,004.1 1,145.6 1,003.1 1,269.5
Manitoba 139.8 165.8 140.2 185.5
Saskatchewan 124.5 150.1 122.6 164.1
Alberta 284.5 317.8 282.6 348.2
British Columbia 356.9 409.5 347.4 436.6
Yukon 2.5 2.7 2.4 2.9
Northwest Territories 4.3 4.8 4.2 5.3
Nunavut 6.4 7.4 6.5 8.1
Total 2,777.5 Reference b is located after the table 3,192.9 Reference c is located after the table 2,763.5 Reference b is located after the table 3,512.2 Reference c is located after the table
  • Reference a from the above table Current dollars are in the actual dollars in a given year and are not adjusted for inflation.
    Reference b from the above table Includes Canadians living outside of Canada
    Reference c from the above table Totals may not add due to rounding.
    Source from the above table Source: CCTB administrative data from the Canada Revenue Agency


  • 4 Figure 3 does not show federal expenditures on the base benefit of the CCTB for middle-income families who do not receive the NCB Supplement. In 2006-2007, the Government of Canada invested $2.3 billion in the base benefit of the CCTB paid to 1.8 million families with 3.3 million children that had an income above the threshold at which the NCB Supplement is reduced to zero. Taking total expenditures on the base benefit of the CCTB and the NCB Supplement together, the Government of Canada’s support to Canadian families with children reached a total of $9.4 billion in 2006-2007, and is estimated to remain at $9.4 billion in 2008-2009. Return to reference 4
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: