Premier Doug Ford?s government in Ontario is expected to announce a tax credit for child care expenses in its first budget. A child care tax credit would fulfill a major campaign promise from last year?s election.
The tax credit is the government?s contrarian response to a recommendation I made to Kathleen Wynne?s Liberal government. After a year of research, I wrote the study Affordable for All: Making Licensed Child Care Affordable in Ontario that recommended free preschool child care.
I concluded that a child care expenses tax credit would be inequitable and inefficient. The Wynne government decided to provide free child care for all children two-and-a-half to four years old based on my research recommendations, but that plan died when the government was defeated. The cost of child care is a problem for many families but the anticipated provincial child care tax credit is likely to do little to help. Here?s why.
It won?t help low-income families
When campaigning, the Progressive Conservative (PC) Party said it would ?create a 75 per cent refundable tax credit for child care costs? for children under age 15 with lower income families receiving the most support at a maximum of $6,750 up to age six.
If a person gets $6,750 at a rebate rate of 75 per cent, this means the expense limit is $9,000?a figure below the annual cost of good-quality child care for preschool children.
If a low-income family found child care at a cost of $20,000, the tax credit would leave them with...