Child Care: The Federal Budget 2007 – What does the budget say?

 

PART A: EXCERPT from “Supporting the Creation of New Child Care Spaces”

….Budget 2007 proposes to provide a 25-per-cent investment tax credit to businesses that create new child care spaces in the workplace to a maximum of $10,000 per space created. It also proposes to provide annual additional funding of $250 million to provinces and territories to support the creation of child care spaces ….

Budget 2007 announces the extension of existing funding of $850 million, provided within the CST in support of federal-provincial-territorial arrangements established in 2000 and 2003 for early childhood development and early learning and child care. These federal funding arrangements will be extended to 2013–14.

PART B: EXCERPT from “Federal Support for Early Learning and Child Care”

The Government of Canada will provide nearly $5.6 billion in 2007–08 in support of early learning and child care through transfers, direct spending and tax measures:

$1.1 billion in cash transfers to provinces and territories.

$2.4 billion annually through monthly payments to parents for every child under the age of 6 through the Universal Child Care Benefit.

$695 million in recognition of child care expenses through the child care expense deduction….

PART C: EXCERPT from “Investment Tax Credit for Child Care Spaces”

Budget 2007 proposes to introduce a tax credit to encourage businesses to create licensed child care spaces for the children of their employees and, potentially, for children in the surrounding community. The tax credit, which will be delivered as part of the existing investment tax credit provisions, will be available to eligible businesses that create one or more new child care spaces in a new or existing licensed child care facility….

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Responses to the federal budget

BCGEU: Federal budget ignores child care needs of working families
Mar 19 ’07

The federal Conservative budget dealt another body blow to universal child care in Canada, by returning only a tiny portion of funding they had previously cut, the B.C. Government and Service Employees’ Union said today.

“The Stephen Harper government has shown a complete lack of commitment to universal child care with this budget,” said BCGEU president George Heyman. “After cutting funding for the federal child care program last year, they restored about one fifth of the funding in this budget.

“It’s an admission of failure, without any real commitment to meet the needs of working families. While the vast majority of Canadians support an affordable, universal child care program, this government has turned it’s back on working parents across this country.”

On March 15, the Canadian Centre for Policy Alternatives published the results of an extensive poll by Environics Research, which showed that 80 per cent of Canadians, and 81 per cent of British Columbians believe that creating more affordable child care spaces for working families is an effective way to reduce the growing gap between the rich and poor in Canada.

“It’s time this government stopped playing politics and actually started to address the real needs of families,” said Heyman. “The time for universal child care is now.”

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BC Federation of Labour: Working families hear lots of talk in federal budget but see no real action

Vancouver—Working families heard lots of talk that they were the centrepiece of today’s federal budget but the details show it’s only talk, with little action says B.C. Federation of Labour Secretary-Treasurer, Angela Schira.

“No matter how much spin the Conservatives try they’re simply out of touch with the needs of working families,” Schira said.

“It’s disappointing that both our federal and provincial governments simply don’t understand that you can’t solve the labour shortage if you don’t solve the childcare shortage,” added Schira.

“Childcare tax breaks for corporations should have been invested in building real spaces,” Schira said. “Corporations don’t have a great track record when it comes to childcare.” Schira added that the $250 million in childcare funding – announced last year only works out to $33 million for BC. Before the Conservatives axed the childcare plan BC was set to receive over $150 million this year. “Those dollars should have been provided to licensed, mostly non-profit, providers to increase spaces now.”….

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Child Care Advocacy Association of Canada
EXCERPT

OTTAWA, ONTARIO– March 19, 2007 – It’s time for the Harper government to publicly face the truth – they’re hurting Canada’s families by failing to deliver on early learning and child care. Although they said child care was one of their top priorities in the last election, today’s budget confirms federal child care funding cuts of almost a billion dollars (80%). The announcement of a measly $250 million transfer to provinces and territories with no accountability framework shows that they do not have a plan for delivering the national child care program that Canadians want.

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CUPE: Stunning absence of leadership in federal budget
http://www.cnw.ca/fr/releases/archive/March2007/19/c4232.html

OTTAWA, March 19 /CNW Telbec/ – “Stephen Harper has tabled an election-ready budget, but the new packaging of the Conservatives should not fool Canadians,” says Paul Moist, national president of the Canadian Union of Public Employees.

“Underneath these new promises is their true agenda: to weaken national social programs and diminish the role of public services in Canada. The government is abandoning its leadership role by having no conditions or federal accountability requirements linked to the additional transfers. This budget takes it one step further and encourages greater privatization of public services,” said Moist…

Federal transfers for early learning and child care were cut by $1 billion when the government cancelled the national child care program. “There is no guarantee that the new funding will create child care spaces,” Moist said…

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CAW: Harper budget may prevent an election, but doesn’t do the job for working Canadians
http://www.newswire.ca/en/releases/archive/March2007/19/c4342.html

TORONTO, March 19 /CNW/ – “The Stephen Harper budget appears to be a budget structured to avoid an election,” said CAW president Buzz Hargrove. “The budget recognizes problems but fails to address them. There is a nod here and a wink there, but no real solutions.”..

“The budget admits that what the Harper government has done with the child care issue has been inadequate. This time they tried to fix the problem with a tax credit of a few hundred dollars for children under 18. What working families really need is the national child care program the Harper government scrapped when they came to power.”

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CODE BLUE – Our reaction

- The Conservative budget is cutting $1 billion that were previously committed to make early learning and child care accessible to families.

- The Conservative government is sticking to its failed child care plan by giving tax credits to businesses for the creation of workplace–and likely for profit–child care spaces even though all the evidence tells them it won’t work. In fact, the Conservatives are probably including this tax break knowing there will be no take-up. This way they can say they stuck with their original plan without having to spend a penny.

- The Conservative government is planning to spend $1.5 billion on a new flat child tax benefit. The cost of the government’s so-called universal child care allowance is estimated to be $2.46 billion in 2007-2008. This means a total of just under $4 billion in 2007-2008 alone will be paid out in payments to individuals. If this money was directed to child care services, it would be almost enough to operate a universal child care system for all 3 to 5 year-olds with federal funds alone.

- The Conservative budget is all about transferring responsibility for services to individuals (in the form of individual tax credits) and to provinces/territories (in the form of unrestricted, unaccountable transfer payments) and this will destroy the future of early learning and child care.

What we got

- Cancellation of $1.2 billion in transfers to provinces/territories that was to take effect on April 1,2007, as well as the cancellation of $1.2 billion in each of the next two years.

- a 25 per cent investment tax credit to businesses that create child care spaces in the workplace to a maximum of $10,000 per space created.

- $250 million in 2007-2008 to provinces/territories for the creation of spaces.

- Starting in 2008-2009, the $250 million transfer will be rolled into the Canada Social Transfer to the provinces/territories on a per capita basis. Reporting and accountability requirements are to be worked out with the provinces/territories.

- Starting in 2009-2010, the transfer through the CST will be increased by 3 per cent each year.

- In their costing of their support for child care, the Conservatives are rolling in the $850 million that is already in place under the Canada Social Transfer as agreed to through the Early Childhood Development Agreement in 2000 and the Multilateral Framework agreement in 2003. Let’s not forget that hardly any of the ECDA funds went for child care, and none of this money is new.

- The budget also allocates $1.5 billion to a new child tax benefit. The Conservatives describe this as federal support for early learning and child care but, like the so-called universal child care allowance, it has nothing to do with child care.

Watch out

- The budget specifies that the $250 million transfer to the provinces/territories in 2007-2008 is for the creation of spaces not their expansion. It is not clear that there will be any accountability or spending requirements.

- Starting in 2008-2009, any strings attached to the $250 million will have to be discussed with the provinces/territories.

- The transfer will not be increased until 2009-2010 after which it will increase by 3 per cent each year, the established Canada Social Transfer escalator.

- The previously negotiated transfers under the Multilateral Framework agreement stay in place under the Canada Social Transfer but are not being increased until 2009-2010 when all the transfers under the CST will go up by 3%.

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CCPA: Tax cut budget out of step with Canadians’ priorities
19 Mar 2007

OTTAWA, March 19 /CNW Telbec/ – Today’s federal budget may be a short- term attempt to buy votes but it fails to address the long-term priorities of most Canadians, says the Canadian Centre for Policy Alternatives.

Two recent national polls one by Environics Research, the other by Strategic Counsel show overwhelming public support for government investment in social programs that benefit all Canadians and that tackle persistent poverty as well as income inequality “the other ‘inconvenient truth’ of our time.

“This is a budget that attempts to buy off low- and middle-income families with tax cuts and provinces with transfers,” says Ellen Russell, senior economist for the Centre. “The Harper government has opted for a second round of targeted tax cuts instead of building through social programs that Canadians say they really want.”

“There are many things tax cuts just can’t do. Tax cuts cannot create child care spaces, build affordable housing, or lower the cost of post-secondary education. Any government serious about helping working families would invest in these services.”

The Centre is also critical of the budget promise to transfer almost $5 billion to the provinces over two years with no strings attached.

“Without strings attached, the provinces are free to spend the money on lawn mowers instead of guaranteeing they will tackle poverty and inequality head-on, ” says Bruce Campbell, executive director of the Centre.

“The Harper budget is about nation dismantling, not nation building. A transfer without any conditions or standards is an abdication of leadership.

Nation building is far more than being a tax collector for the provinces,” concludes Campbell.