Is the Canada Child Benefit Targeted to those Most in Need?

This essay assesses the federal government’s multiple claims that the Canada Child Benefit (CCB) is targeted to those who need it most.
Any program providing benefits to 90 percent or so of families will struggle to be targeted to only those in need.
Of the total benefits paid under the CCB, 8.3 percent is allocated to families with a gross income below $30,000; that proportion increases to 16.2 percent if gross family income is $40,000 or less.
More than half of the total CCB (50.3 percent) is allocated to families with incomes of $70,000 or higher.
The CCB represents a material increase in costs from the previous combination of the Universal Child Care Benefit (UCCB) and the Canada Child Tax Benefit (CCTB). The cost estimate for the CCB for 2019-20 is $24.4 billion, an increase of $5.7 billion, or 30.5 percent, compared to the previous programs.
The most pronounced increase from the old UCCB plus CCTB programs compared to the new CCB were for those families with incomes between $40,000 and $120,000; the CCB also increased benefits to families with a gross income of up to $180,000.
Under the previous programs, eligible families with incomes below $40,000 received 21.8 percent of the benefits whereas under the CCB, they receive 16.2 percent of the total.
Families with incomes between $50,000 and $120,000 previously received 44.4 percent of the total benefits whereas they now receive 56.9 percent, a marked 28.1 percent increase in the distribution for middle-income families.
The CCB cannot be credibly referred to as a targeted program and it transfers relatively more to the middle class than did the previous child benefits system.

Author(s):
Christopher A. Sarlo
Jason Clemens
Milagros Palacios