Archived - Update on Reinvestments Under the National Child Benefit

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Update on Reinvestments Under the National Child Benefit

Provincial and territorial governments share a commitment with the Government of Canada to the success of the National Child Benefit (NCB). This partnership involves funding commitments by both levels of government.

The Government of Canada’s commitment is to increase the Canada Child Tax Benefit (CCTB) for low income families by $850 million in July 1998. Over the next two years, the Government of Canada will add another $850 million to the Canada Child Tax Benefit for a total of $1.7billion per year as of the year 2000.

The provincial/territorial commitment is to develop benefits and services reflective of each jurisdiction’s special needs and priorities and consistent with the goals of the NCB: to reduce the depth of child poverty and help low income families find and keep work. In addition, Indian and Northern Affairs Canada is working with First Nations and provinces/territories to develop complementary programs for First Nations children living on reserve.

These improved benefits and services are financed primarily by provinces/territories adjusting social assistance benefits to correspond with the increased benefits received by these families through the CCTB. All provinces/territories are exploring whether incremental funds can be devoted to the NCB; in some cases, these funds have been allocated in 1998/99.

Since part of the CCTB increase goes to low income families not on social assistance, the provincial reinvestment envelope is only a portion of the federal contribution.

The reinvestment plans in this second update focus on actions taken after governments came together and agreed to the NCB as a new national initiative. As a result, only activities started between April 1, 1998 and March 31, 1999 are included. The Government of Canada and provincial and territorial governments will work in partnership over the coming year to develop a plan for future increases in the Canada Child Tax Benefit and associated provincial/territorial reinvestments in benefits and services for low income families with children.

For more information on reinvestment plans, contact the provincial/territorial office responsible for income support/social services in the appropriate jurisdiction, or Indian and Northern Affairs Canada.

  • Quebec, while agreeing with the basic principles of the National Child Benefit, has not taken part in the development of this initiative because it wishes to assume control of income support for the children of Quebec. Reinvestment plans for the province of Quebec are therefor not included in this document.
  • Reinvestment envelopes are calculated amounts. They reflect actual or potential savings in social assistance/income support that correspond with increased benefits received by families through the Canada Child Tax Benefit (CCTB). The envelopes also include, if applicable, any revenues from the increase in the Children’s Special Allowance and payment for transitional costs due to the incorporation of the Working Income Supplement into the CCTB. They do not include any further increases to the CCTB as a result of the February 1998 Government of Canada budget announcement.
  • NCB initiatives include programs funded from the reinvestment envelopes as well as from additional provincial/territorial sources.

British Columbia

As the BC Family Bonus replaced social assistance for children in 1996, with the implementation of the NCB, BC will have a total of $63.8 million in 1998/99 and $85 million annually to redirect to other new provincial initiatives for low income children and families.

After July 1, the BC Family Bonus and the National Child Benefit Supplement will provide a combined benefit of up to $103 per month for each child under 18 years of age. This amount will be reduced for families whose net annual income is more than $18,000.

As part of the NCB, BC is allocating $60 million to a new employment incentive program, the BC Earned Income Benefit (BCEIB) to ensure that the transition to the NCB framework does not result in a loss in benefits for any BC family. The BCEIB will support families with children by promoting economic security through participation in the labour market. It is being implemented concurrently with the National Child Benefit in July 1998. Families with earned income of more than $3,750 may be entitled to the following:

  • Up to $50.41 per month for one child;
  • Up to $84.16 per month for two children;
  • Up to $111.66 per month for three children;
  • Up to $27.50 per month for each additional child.

These amounts will be reduced if a family’s net income is more than $20,921.

The BC Family Bonus (BCFB) and the BC Earned Income Benefit (BCEIB) are tax free monthly benefits that make it more attractive for those on welfare to seek work and to remain employed. Benefits from these programs are being combined with the CCTB into a single monthly payment.

British Columbia’s second NCB initiative is focused on children in care. Through the NCB reinvestment, BC will increase the Children in Care allowance by $3 million.

In fiscal year 1998/99, BC will be announcing a further expenditure of $22.0 million within the NCB envelope.

British Columbia’s NCB initiatives will serve over 440,000 low income children.

Alberta

Alberta will have $13.7 million available for reinvestment from July 1998 to March 1999 and $21.2 million annually as a result of adjustments to social assistance. This will be further supplemented by adjustments in student assistance to provide a provincial reinvestment pool of $23.7 million annually.

Alberta’s primary reinvestment choice will focus on a new health plan for children in low income families called the Alberta Child Health Benefit. Consultations with focus groups in the province identified health coverage for low income working families as the single highest priority.

This health plan will offer basic coverage for dental, optical, ambulance services and prescription drugs for children in low income families with annual net incomes below $20,921 (maximum CCTB level) and for children whose parents are in upgrading programs and receive student assistance.

The plan will be modelled on the coverage provided to welfare recipients and will be sufficient to meet basic health needs. For example, the following services will be covered: two dental check-ups per year, cavity fillings, eyeglasses, prescription drugs, emergency ambulance services and over-the-counter children’s medication. These services will be covered from 50 to 100% of the cost, depending on the family’s income and the service being covered.

It is estimated that approximately 138,000 children in Alberta will be eligible for the Alberta Child Health Benefit. This includes 121,000 children in low income working families and 17,000 children of parents in academic upgrading programs.

The health plan promises to achieve two goals of the National Child Benefit: addressing the depth of child poverty and promoting attachment to the workforce. It will provide health coverage to thousands of low income families who don’t have coverage for their children, it will support low income families’ efforts to remain in the workforce, and it will offer families on welfare the assurance of continued health coverage for their children as they leave welfare.

Alberta’s second reinvestment choice will focus on child care. The NCB funding will allow the province to adjust the income qualification levels for full child care subsidy by $80 per month to bring these levels closer to the maximum CCTB level. A single parent with one child will be eligible for maximum subsidy up to income levels of $20,520; for 2 parents with 2 children the new maximum will be $24,120.

The Alberta Child Health Benefit will be implemented in August 1998 and the Child Care changes in July 1998, in conjunction with national implementation of the NCB.

Saskatchewan

The Saskatchewan government estimates it will have $11 million to reinvest in new programs during the 1998/99 fiscal year. The reinvestment pool will grow to $15 million on an annualized basis.

Saskatchewan plans to broadly reform its income security programs so that the base of families who are eligible will be extended beyond the current welfare threshold to include low income working families. Reinvestment funds will be used to support this process and will be supplemented by an additional $37.5 million annually in provincial funding to provide additional improvements to programs for low income families. These new programs will assist over 40,000 families (80,000 children). Saskatchewan’s Building Independence -- Investing in Families strategy will include:

Saskatchewan Employment Supplement (SES) - This initiative, to be introduced in July 1998, is an employment support program which will provide a monthly supplement on employment, self-employment and maintenance income for low income families with children. It will be delivered by the province in order to be more closely tied to changes in income.

Saskatchewan Child Benefit (SCB) -- This initiative, scheduled for implementation in July 1998, will be an income-tested benefit, designed to integrate closely with the new federal National Child Benefit Supplement. It will be delivered by the Government of Canada as an integrated payment with the Canada Child Tax Benefit.

Saskatchewan’s income support benefits for children will be transferred from social assistance to the new Saskatchewan Child Benefit.

Family Health Benefits - to begin August 1998, will provide supplementary health benefits to low income working families receiving the Saskatchewan Employment Supplement and/or the Saskatchewan Child Benefit. Eligible families will receive supplementary health benefits for children including drug, dental, optical and other coverage. Parents will also receive partial supplementary health coverage. This program will ensure that lower income working families do not fall onto social assistance because of the health needs of their children.

These new programs will help to reduce child poverty by lowering barriers to employment for low income families. They will assist parents with the child-related costs of going to work and create a bridge for parents on social assistance to help them make the leap from dependence to the workforce. Benefits from these programs are expected to reach a total of 40,000 families. Research has shown that investing in children can result in lifelong gains for both the children and for society. These initiatives build on the experience and success of the Saskatchewan Action Plan for Children.

Manitoba

Manitoba will spend over $15 million in 1998/99 for early intervention and healthy child development programs, and for additional supports to benefit children in lower income families.

These initiatives will be funded through $10 million made available in 1998/99 for reinvestment under National Child Benefit recoveries, and by over $5 million in new provincial funds. The recoveries under the National Child Benefit are expected to increase to approximately $14 million on an annual basis starting in April 1999.

In response to the priorities identified by Manitobans in public consultations, funds for 1998/99 will be invested in the following areas:

  • $2.0 million for early intervention programs emphasizing positive parenting, healthy child development and preventing adolescent pregnancy;
  • $2.1 million for children’s nutrition programs, including new partnerships with community groups;
  • $2.0 million for training and job placement programs to assist more income assistance clients and lower-income working parents find and keep jobs;
  • $4.8 million to expand the accessibility, portability and flexibility of child care options to help lower-income working families with young children enter and remain in the workforce;
  • $2.6 million for early literacy programs, and programs to help families ensure their children are ready to learn and are successful when they enter the school system; and
  • $1.7 million for families on income assistance who are making the transition to the new National Child Benefit.

Manitoba expects these new investments to help contribute to the two main goals of the National Child Benefit - preventing and reducing the depth of child poverty, and promoting attachment to the workforce. The new early intervention and prevention programs targeted to high-risk families will help more children develop into healthy and productive adults and break the cycle of poverty. More income assistance families will gain independence by entering and remaining in jobs as a result of increased access to placement and training opportunities, and by the availability of quality, flexible child care options.

Manitoba’s reinvestments are part of an overall Children First strategy. This strategy recognizes that children should have first call on resources, and services need to be coordinated, community based and child centred. The Children and Youth Secretariat, in consultation with its seven partner departments, is coodinating a series of initiatives based on "best practices" and on the principles of prevention and early intervention designed to improve long term outcomes for Manitoba’s children.

Manitoba’s reinvestments began to be implemented in April 1998 and are expected to benefit over 90,000 children each year.

Ontario

Ontario estimates that $117 million will be available in 1998/99 for reinvestment as a result of the NCB. The reinvestment pool will grow to $156 million on an annualized basis.

Ontario will use its portion of the NCB reinvestment to create a new Ontario Child Care Supplement for Working Families. This is a new program that would support up to 350,000 young children in working families by providing a maximum annual benefit of $1,020 for each child under 7. Families would be eligible for the Supplement if they have work earnings exceeding $5,000 or are attending education or training programs and have child care expenses. For families with incomes above $20,000, the Supplement would be reduced.

Ontario will reinvest $100 million in 1998/99 in the Ontario Child Care Supplement for Working Families. This amount will grow to $145 million as an annual amount. In addition, Ontario will also invest $40 million, bringing the total value of the Supplement to $185 million annually.

In Ontario, municipalities will also share in the NCB reinvestment, because social assistance continues to be cost-shared between municipalities and the province. The municipal portion will be $22 million in 1998/99, growing to $30 million annually.

Municipalities will be developing strategies for NCB reinvestment to meet the NCB objectives of reducing child poverty and helping people move from social assistance to work. Like the province, municipalities will be reporting on their use of the NCB reinvestment.

Ontario is also undertaking a number of new initiatives to help children and their families in addition to its NCB reinvestment. These include: the new Learning, Earning and Parenting (LEAP) Program which will provide child care subsidies and other supports to help single parents on welfare finish school; additional child care assistance for participants in Ontario Works to give greater flexibility and choices for parents; increased funding for the Healthy Babies, Healthy Children program which screens all newborns, and identifies those at high risk and ensures they receive community services; and increased funding for Children’s Aid Societies to increase the number of child protection staff, provide better training for front-line workers and revitalize foster care.

New Brunswick

With the introduction of the NCB, New Brunswick will have $8.9 million in 1998/99 and $11.2 million annually available for reinvestment. However, in this first year of NCB implementation, New Brunswick will not offset social assistance payments by the amount of the federal increase.

Beginning in August, 1998, New Brunswick will invest an additional $2.1 million in child care initiatives. Part of this investment will be an increase in day care subsidy rates in the province. Day care subsidy rates will increase by $1.50 per day; as of August 1, the Day Care Subsidy Program will pay up to $18.50 per day for children in care under the age of two and $16.50 per day for children in care over the age of two years. This subsidy increase will help offset the gap between the day care subsidy amount and current market rate.

In addition, the province is setting aside 200 spaces for child care. This child care will be available for low income New Brunswickers who require child care for their children, but who for a variety of reasons are unable to access licensed day care facilities. The subsidy rates for these child care spaces will equal the amounts provided under the Day Care Subsidy Program.

New Brunswick’s NCB initiatives are expected to benefit over 24,000 children each year.

Prince Edward Island

Through the National Child Benefit, Prince Edward Island will have an additional $1.2 million in 1998/99 and $1.8 million on an annual basis to invest in programs for low income families with children.

PEI’s reinvestments are designed to promote healthy child development, and to support lower income families in their efforts to participate in the labour force.

The PEI reinvestment strategy has two major thrusts:

  1. Through the new PEI Child Care Benefit, the Province will invest an additional $600,000 per year in child care subsidies for low income working families. The new funding will be used to enhance child care assistance in three ways:
    • the present qualifying income scales will be expanded to increase the number of families eligible for child care subsidies. This is expected to benefit at least 100 additional families;
    • lower income families currently paying a portion of their child care fees will have this share either reduced or eliminated. This will benefit approximately 700 families who now utilize child care subsidies;
    • and finally, the present child care per diem subsidy will be increased for the first time since 1990.
  2. Through the PEI Family Health Benefit, the Province will invest $800,000 per year to provide basic coverage for prescription drugs for all Island families with children and annual incomes below $20,000. The program will benefit approximately 4,800 families with 8,000 children. Supplementary coverage for prescription drugs will be provided to lower income working families to ensure they do not fall onto social assistance because of the health needs of their children, and to help families on social assistance enter the workforce without losing child health benefits. Coverage will be provided to all family members through a contribution of deductibles and co-pays.

PEI’s reinvestment strategy will also include several community partnership initiatives. Further details on these reinvestments will be announced as the initiatives are developed.

Nova Scotia

Nova Scotia will direct its NCB reinvestments towards programs that help meet the growing needs of low income families with children. The reinvestment fund is anticipated at $ 9.7 million in 1998/99 and $ 14.6 million annually.

Nova Scotia has two primary reinvestment initiatives which will potentially impact 51,000 children: a Nova Scotia Child Benefit for low income families with children; and a range of healthy child development initiatives.

These healthy child development initiatives include an additional:

  • $ 1 million for Community-Based Prevention Programs;
  • $ 250,000 towards increasing current Early Intervention Programs;
  • $ 750,000 towards increasing current centre-based Child Care; and
  • $ 250,000 towards the development of a regulated home-based rural child care program.

As the Canada Child Tax Benefit increases, further funding enhancements are anticipated for the Nova Scotia reinvestment programs in the following years. This is only the first step.

The Nova Scotia Child Benefit is designed for families with less than $ 16,000/year annual income with benefits up to $250/year for the first child; up to $168 for the second child and up to $136/year for each additional child.

The Community-Based Prevention Programs will expand the Healthy Start/Home visiting programs in support of families coping with newborn children.

The early Intervention Programs are home based programs which support pre-school children. The programs assist parents to provide developmentally stimulating opportunities which promote school readiness.

The Centre-Based Child Care reinvestment will provide an additional 80 subsidized child care spaces and 30 portable child care spaces for special needs children.

The Family-Based Child Care reinvestment will provide 70 subsidized home child care spaces in rural Nova Scotia.

Newfoundland and Labrador

Under the NCB, Newfoundland and Labrador will have $7.7 million in 1998/99 and approximately $10.2 million annually to reinvest in new programs and services. For this first year of NCB implementation, Newfoundland will not offset social assistance payments by the amount of the federal NCB increase.

However, Newfoundland and Labrador will contribute an additional $10.2 million to fund the following NCB initiatives:

  • $1.15 million for additional family resource project sites to provide a range of supportive and early intervention services and programs to meet the needs of families with children 0-6 years of age. Similar programs have been established in the province under the Government of Canada funded Community Action Program for Children (CAPC);
  • $4.6 million for the improvement and expansion of licensed child care services in the province, including additional child care subsidies, the introduction of licensed family home child care, the introduction of licensed infant child care, and the provision of a range of support program funds to assist with the development of child care services generally;
  • $2.8 million to develop coordinated, regional youth service networks, in partnership with existing community programs, to support youth at risk 12-18 years with an emphasis on prevention and early intervention support services such as peer counseling, self-help, mental health services, and back to school initiatives. This initiative will be designed to support young people to make a successful transition from school to independence and adulthood; and
  • $1.6 million for initiatives under the social assistance program designed to assist families in making the transition to work including an increase to the child care expense deduction and the extension of drug card benefits for families moving into employment.

These directions are consistent with the views expressed in a number of public consultation processes including the House of Assembly Select Committee on Children’s Interests and the Social Policy Advisory Committee (SPAC) consultations for the proposed Strategic Social Plan. As well, these directions are consistent with other on-going initiatives including the Coordinated Model for Services to Children and Youth and the Provincial Strategy on Violence.

Newfoundland’s NCB initiatives are expected to benefit over 28,000 children each year.

Implementation of these initiatives will be done in conjunction with the proposed introduction of new legislation governing child welfare services and the licensing of child care services, scheduled for the up-coming fiscal year. As a consequence, some initiatives may not achieve full implementation in the 1998/99 fiscal year. Community and consumer participation in the planning and implementation associated with these new initiatives will be sought. A process for such input will be announced shortly.

Northwest Territories

The Government of the Northwest Territories will have approximately $1.6 million available in 1998/99 and $2.1 million annually for reinvestment in NCB initiatives. It will supplement this with an additional $2 million in new funding for the NWT Child Benefit and the Territorial Workers’ Supplement.

The NWT Child Benefit

  1. All families with net annual incomes of $20,921 or less will receive an annual benefit of at least $330 per child. This is in addition to the increased Canada Child Tax Benefit.
  2. The benefit will begin to be phased-out with net annual incomes of $20,921. The level at which it would be eliminated would vary according to family size.
  3. The benefit will be administered by Revenue Canada and delivered monthly with the Canada Child Tax Benefit. It will be paid to the children’s primary caregiver - the same caregiver who is receiving the Canada Child Tax Benefit.
  4. The Territorial Workers’ Supplement

Families with working annual incomes of $3,750 or more would be entitled to an additional Territorial Workers’ Supplement (TWS) of a maximum of $275 for the first child and $75 for the second. It will be phased-in, so that the maximum benefit becomes available when a family’s working income reaches $10,000. The TWS will help support low income families with their increased expenses resulting from work.

It is estimated that about 6,500 families, or 14,300 children (59% of all children in the Northwest Territories) will receive some benefit from the NWT’s reinvestment initiatives. New programs will begin in July 1998.

Maximum Benefits Under the NCB and NWT Child Benefit/TWS

(annual $ paid to families)

 # of Children   Federal    Territorial Child Benefit   Total 
1 Child $1,625 $605  $2,230 
2 Children $3,050 $1,010  $4,060 
3 Children $4,475 $1,340  $5,815 
4 Children $5,900 $1,670  $7,570 

The Government of the NWT will also increase the base rate of the Income Support Food Allowance by 8% and adjust the Food Allowance cost zone structure. Implementation is scheduled for August 1, 1998.

Yukon

The Yukon will have approximately $220,600 available for reinvestment in 1998/99. On an annualized basis, approximately $314,100 will be available. If the program costs exceed available NCB reinvestment funds, the Yukon may provide additional funds.

The Yukon will reinvest in the Children’s Drug and Optical Program. It is designed to assist low income families with the cost of prescription drugs and eye care for children up to the age of 18 years. To be eligible, families must fall within a certain income range based on the family size, and use other insurance programs for which they are eligible first. There is a deductible of up to $500 per family per year, which is waived for families in the lowest income ranges.

Family income is one factor which affects the health of children. Low income families often cannot afford the drugs needed for medical treatment and will go without regular eye examinations and purchasing eyeglasses in favor of using their limited resources on other family needs. The program ensures that children in low income working families have benefits comparable to the benefits they would receive on social assistance. In some cases, the program may remove one of the barriers to families leaving social assistance.

The Children’s Drug and Optical Program responds to the Yukon government’s commitment to address the needs of Yukon men, women and children living in poverty, as identified in the Government of Yukon Action Agenda 1997-2000.

The pilot project phase of the program was implemented on January 1, 1998, with full implementation scheduled for April 1, 1998.

The additional Children’s Special Allowance will be distributed to the children’s caregivers.

It is expected that about 2,000 Yukon children will access the Children’s Drug and Optical Program. There are about 350 children in care who may benefit from the increase in the Children’s Special Allowance.

Indian and Northern Affairs Canada

The Government of Canada is committed to ensuring that First Nations children living on reserve benefit like other Canadian children from the National Child Benefit.

Reinvestment envelopes will be calculated on a regional basis and will be based on the method by which provincial-territorial governments adjust welfare rates in relation to the increased Canada Child Tax Benefit. It is estimated that $27-30 million annually will be available for reinvestment in First Nations across Canada.

Indian and Northern Affairs Canada will retain reinvestment funds at the regional level and will work with First Nations to develop reinvestment strategies that meet the priorities and needs of First Nations communities. All reinvestments will be guided by the objectives of the National Child Benefit.

In some provinces, First Nations and provincial reinvestments may be the same. In other provinces, Indian and Northern Affairs Canada will work with First Nations to develop unique reinvestment initiatives.

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