Quebec is in a sense the “paradise” of the family in Canada.
Of all Canadian provinces, households with children here benefit from the largest federal financial aid when you add up the tax credits and the various allowances that the two tiers of government offer to families with children.
And nice coincidence, it was Quebec that had the highest “synthetic fertility rate” of the 10 provinces in 2021, or 1.58 children per woman, compared to 1.43 for Canada as a whole.
The financial aid provided to Quebec families is particularly generous for families with children who are part of low-income households. And that’s good!
“The presence of children increases the financial support a family receives in Quebec. Quebec is clearly interested in tackling poverty among families with children,” rightly underline the authors of the study “The point after 25 years of family policy”, namely the prolific tax professor Luc Godbout and his colleagues Michaël Robert-Angers and Suzie St – Cerny from the Dynamic Research Chair in Taxation and Public Finance at Université Sherbrooke.
As evidence, the authors cite the following example: “With two children, ages 3 and 7, a household that works at minimum wage and thus has a gross family income of $41,496 receives financial support tied to the presence of children that reached $18,094.”
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HOW MUCH HELP FOR 2 CHILDREN?
Godbout, Rober-Angers and St-Cerny estimate the government financial support allotted to such a low-income couple in the 18 years following the birth of the majority of their two children at around $320,000.
“Knowing that having two children results in additional expenses that can be estimated at an average of $18,500 annually, the financial support a low-income family receives would cover almost all (96%) of their children’s costs” , they say.
Not only low-income families benefit from state child welfare.
The study authors cite the case of the representative middle-class family, which would have a family income of $105,000. With two dependent children, this typical family would benefit from total federal assistance of approximately $9,594 per year.
This financial support through tax credits and state aid would make it possible to cover about 50% of the bill that this middle-income household must pay to support their two children through the 18 years from birth to the majority of their two children.
Want more examples? According to the study’s authors, this is the amount of financial assistance the state pays to families with two children in Quebec over the age of 18, according to other family income examples.
With an annual income of $70,000, the total state benefit over the age of 18 for the two children is $234,617, which covers 70% of the expenses related to the child.
With a family income of $140,000, the benefit drops to $113,788, or 34% of the stated expenses. And with a family income of $200,000, the state grants $58,786 in assistance to cover 18% of related expenses.
As you can see, wealthy households also benefit from state support for families.
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WORLDWIDE…
If we compare the government support given to households with children in Quebec versus the support paid to families living in the 33 member countries of the OECD, it becomes clear that Quebec does really well.
The study “The point after 25 years of family policy” shows that for a couple with two children in daycare and a family income of 167% of the average salary, Quebec arrives:
- 8th in net childcare costs (3.2% of family income);
- 6th in State Financial Assistance (9.7% of family income);
- 7th place in terms of the share of income from work in taxes, social security contributions and childcare costs (20.8% of family income).
For single-parent families with one child earning 67% of the median wage, Quebec ranks second among the 33 member countries of the OECD, behind the Czech Republic.
APARTMENT
Unfortunately, state aid for families with children is not perfect, as low-income households are severely penalized as soon as they manage to increase their income from work.
According to the authors of the study, what is the problem? The additional earned income reduces the amount resulting from the tax credits and allowances paid for the children.
The financial consequences of this will be that only a small part of the extra labor income will remain in households’ pockets after the state cuts state aid.
In the case of a couple with two children whose wages went from $45,000 to $50,000, the state would cut their benefit by $4,360, leaving only $640 net in their pocket for an additional $5,000 in gains. This household is thus the victim of a tax robbery of 87.2%!
A single family in the same situation with an additional gross income of $5,000 would suffer a 62.4% tax rebate, leaving the family with only $1,879 on an additional income of $5,000.
It doesn’t make any damn sense. It is imperative that the governments of Quebec and Ottawa put in place a mechanism to stop such tax abuse.
