TORONTO – This week the Canada Revenue Agency (CRA) will be notifying tax filers of how much they will receive in refundable tax credits, such as the Canada Child Benefit (CCB). Many families who have received pandemic benefits in the past will surprised to learn of further reductions in upcoming credits.
Campaign 2000 has been organizing a CERB Amnesty Working Group for over two years. Membership is made up of community organizations, policy analysts, community legal clinics and people with living expertise of poverty/disability and other intersections of marginalization. Together, they have been monitoring the effects of CERB on the incomes and the lives of people with low and moderate incomes. According to analysis by Open Policy, this round of clawbacks will primarily affect mothers, despite commitments from the federal government to advance gender equality and feminist policy.
“Letters from federal departments going out to millions of mothers this July will confirm that pandemic benefits will be confiscated from their ongoing child benefits” says John Stapleton, Principal and Founder of Open Policy. “And those mothers with larger families will be hit hardest – the ones who require child benefits the most. For a mother with 4 children with a modest earned income of $33,000 a year and who would otherwise receive the maximum CCB amount, the hit will be over $3,000 in reduced refundable credits.”
The Canada Emergency Response Benefit (CERB), three recovery benefits and the lockdown benefits all count as taxable income, which can affect how much a person is eligible for in refundable tax credits. For those with low and moderate incomes, depending on the particular tax credit, the amounts of the pandemic benefits could push incomes up over tax credit thresholds, resulting in clawbacks.
“The problem is that the benefits were received months ago – and in some cases over a year ago. Families have spent that money on what it was intended for, that was to stay safe and shelter at home,” says Leila Sarangi, National Director of the anti-poverty coalition Campaign 2000: End Child and Family Poverty. “In the context of rising inflation, families, including those on moderate incomes, are depending on government transfers like the Canada Child Benefit to make ends meet.”
According to a recent report by the Parliamentary Budget Office, child benefit payments were reduced on average by $606 in 2021/22 because of pandemic benefits being counted into income calculations. Over three years, these clawbacks will mean that the federal government will spend $1.45 billion less in child benefit payments.
“It seems exceptionally punitive and antithetical to feminist economic policy,” Jasmine Ramze Rezaee, Director of Advocacy and Communications at YWCA Toronto. “It’s why we’ve urged for immediate CERB Amnesty. Government refunded clawbacks to seniors, gave the self-employed repayment amnesty and provided partial relief for students. Now is the time for a CERB Amnesty for mothers, children and anyone living with low or moderate incomes.”
National: Leila Sarangi, National Director of Campaign 2000: End Child and Family Poverty Email: [email protected] Cell: 647-393-1097