Harper Government Announces Tax Relief Measures for Families

Camrose – The Honourable Kevin Sorenson, Minister of State (Finance) and Member of Parliament for Crowfoot, welcomed the announcement of the Harper Government’s tax relief measures for families. Sorenson says, “All families with children will benefit from the new measures introduced by our Government. The average tax relief and benefits for these families will be $1,140 in 2015. Two-thirds of the benefits flow to low-and-middle income families – right here in our riding of Crowfoot.”
These tax relief measures include:
The Family Tax Cut–Up to $2,000 for couples with children under the age of 18, effective for the 2014 tax year. The proposed Family Tax Cut will take the form of a federal non-refundable tax credit that will allow the higher-income spouse to transfer up to $50,000 of taxable income to a spouse in a lower income tax bracket, up to a maximum benefit of $2,000.
This measure is estimated to reduce federal tax revenues by approximately $2.4 billion in 2014-15 and $1.9 billion in 2015-16. More than 1.7 million families are expected to benefit. This proposal will not affect provincial or territorial tax revenues.
Universal Child Care Benefit–In 2006, the Government introduced the Universal Child Care Benefit (UCCB), which provides all families with $100 per month for each child under the age of six. The UCCB currently provides direct federal support to approximately 1.7 million families with young children. The Government is proposing to enhance the UCCB by providing $160 per month. In a year, parents will receive up to $1,920 per year for each child under the age of six. Our Government is also introducing a new benefit of up to $720 per year for children age six through 17.
These enhanced payments will take effect as of January 2015 and will begin to be reflected in monthly payments to recipients in July 2015. This measure is expected to cost the federal government approximately $1.1 billion in 2014-15 and $4.4 billion in 2015-16. Approximately four million families are expected to benefit. The enhanced UCCB will replace the existing Child Tax Credit for the 2015 and subsequent taxation years. The enhanced UCCB combined with the repeal of the Child Tax Credit is expected to cost the federal government approximately $700 million in 2014-15 and $2.6 billion in 2015-16.
Child Care Expense Deduction–The Child Care Expense Deduction (CCED) allows child care expenses incurred to earn employment or business income, pursue education or perform research, to be deducted from income for tax purposes. Generally, only the lower-income spouse can claim the CCED. To better reflect the cost of child care expenses, our Government will increase the dollar limits of the CCED by $1,000 including children who are eligible for the Disability Tax Credit. These changes will apply for the 2015 and subsequent taxation years, and will reduce federal revenues by an estimated $15 million in 2014-15 and $65 million in 2015-16. More than 200,000 families are expected to benefit.
Doubling the Children’s Fitness Tax Credit–Our Government will double the Children’s Fitness Tax Credit (CFTC) and make it refundable to further help families making the choice to put their children in fitness activities. Making the tax credit refundable will ensure that lower-income families benefit from this measure. Parents will be able to take advantage of the new $1,000 maximum limit in the spring of 2015 when they file their tax returns for 2014. The credit will be made refundable as of the 2015 tax year, increasing benefits to low-income families claiming it for that year and subsequent years.
Together, the proposed enhancements are expected to cost the federal government approximately $25 million in 2014-15, and $35 million annually thereafter. When fully implemented, the proposed enhancements will deliver additional tax relief to about 850,000 families.
Minister Sorenson concludes, “As our Conservative Government proceeds to eliminate the federal government’s annual budgetary deficit in 2015, I am pleased that Canadian families are the first to realize the benefits of a balanced federal budget. These measures are further components of our package of efforts to leave more money in the pockets of Canadians.”