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Alberta

The Child Benefit You Got was Not an Error

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The Child Benefit You Got was Not an Error

So a lot of people are wondering why money showed up for the Canada Child Benefit (CCB) yesterday (May 20) when they normally don’t qualify.

The CCB “one-time payment” for COVID-19 relief is actually formula driven but it is created by adding $3,600 for each additional child (not $300)… you’ll see in a minute why this is.

Step 1 – Add up the number of children that were under 6 years old in 2018 and multiply by $6,639.00

Step 2 – Add up the number of children that were between 6 and 17 years of age in 2018 and multiply by $5,602.00

This is your normal ANNUAL Canada Child Benefit entitlement before reductions.

However, for your May 2020 payment only, the formula adds $3,600 per child to bring the numbers to $10,239 and $9,202 per child based on age respectively.

If you have less than $31,120 of adjusted household income, you will get the full $300 extra, congrats, no more math for you.

For the rest of you it gets interesting or complicated, depending how you view math.

Any amount of adjusted household income between $31,120 and $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 7% of the amount of household income if you have 1 child
  • 13.5% of the amount of household income if you have 2 children
  • 19% of the amount of household income if you have 3 children
  • 23% of the amount of household income if you have 4 children or more

This is called the “first reduction”.  The maximum amount of household income subject to the first reduction formula is $36,306 more than the base $31,120 (meaning an income of $65,976)

Those of you over this number, you are not done yet.

Any amount of adjusted household income over $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 3.2% of the amount of household income if you have 1 child
  • 5.7% of the amount of household income if you have 2 children
  • 8% of the amount of household income if you have 3 children
  • 9.5% of the amount of household income if you have 4 children or more

This is called the “second reduction”.  There is no maximum amount of household income subject to the second reduction formula.  You keep calculating until you hit zero.

For example.   If you have one school-aged child in 2018, and your adjusted household income is $100,000 the formula would be this:

NORMAL MONTHLY BENEFIT:

  • First reduction: 67,426-31,120 = $36,306 x 7% = $2,541.42
  • Second reduction: 100,000-67,426 = $32,574 x 3.2% = $1,042.37
  • 1 child: $5,602
  • $5,602.00 minus $2,541.42 = $3,060.58 minus $1,042.37 = $2,018.21
  • $2,978.21 divided by 12 = $168.18/month CCB as a Normal Benefit

COVID19 MAY 2020 BENEFIT:

  • The first two reduction steps are the same but that 1 child is $3,600 more
  • 1 child: $9,202
  • $9,202.00 minus $2,541.42 = $6,660.58 minus $1,042.37 = $5,618.21
  • $5,618.21 divided by 12 = $468.18/month CCB as a one-time Benefit  (an extra $300 like promised)

So yes… an extra $300 per child for those already getting the benefit already… but for those that were not getting it before, but filed in 2018… and had an eligible child… the formula is recalculated with the $3,600 ($300 per month) change, and so many more households in Canada will be seeing some sort of amount.

For example, the lowest amount possible to collect would be with one school-aged child ($9,202 formula).

  • Households that make up to $163,069 will receive the full $300 for this child.
  • Households between $163,069 and $275,569 will receive less than $300 on a sliding scale from the Second reduction.
  • Households over $275,569 in this scenario would receive zero.

So almost every household with eligible children in Canada will see something coming their way for the May benefit to help with the extra costs with no schools or dayhomes open.

Sincerely,
Your Friendly Neighbourhood Tax Nerds

CGL Strategic Business & Tax Advisors

 

 

 

 

 

CV of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.

 

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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Alberta

Free Alberta Strategy backing Smith’s Provincial Priorities Act

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News release from Free Alberta Strategy

Premier Danielle Smith had a message for Ottawa last week.

Keep out.

On Wednesday, the Premier rolled out her latest weapon in the fight against federal intrusions into provincial jurisdiction.

If passed, Bill 18 – the Provincial Priorities Act – aims to align federal funding with provincial priorities, ensuring that said funding reflects Alberta’s interests.

The legislation stipulates that any agreements between the federal government and any provincial entities – including municipalities – must receive provincial approval to be considered valid.

Smith has already given it a nickname: “the stay-out-of-my-backyard bill.”

It’s an apt description of the legislation, especially considering that’s what the federal government has been doing for years – encroaching into Alberta’s jurisdiction.

The legislation shouldn’t come as a surprise to anyone.

We all know that most deals the Alberta government enters into with the federal government don’t work out for Albertans.

We end up paying more in federal taxes than gets spent in federal spending on the programs.

The programs come laden with restrictive conditions that undermine our autonomy, and are often detrimental to our ability to provide the services.

This is especially true with regard to the recent agreement between Ottawa and the provinces that allows the federal government to nationalize childcare.

The childcare agreement has come under heavy criticism due to funding shortfalls in the deal.

It also applies to housing, where despite Alberta accounting for 12% of the national population and experiencing the most rapid population growth, it received a mere 2.5% of the total $1.5 billion in federal housing funding last summer.

Jason Nixon, Minister of Seniors, Community and Social Services, is in charge of housing in Alberta – which is provincial jurisdiction.

On the latest rollout of conditional federal housing handouts, Nixon isn’t buying.

“We will not be bribed, with our own money, to increase the time it takes to get homes built with green energy that makes homes more expensive.”

The theory also applies to the federal government’s latest gambit – doing an end-around provincial negotiations and going directly to municipalities, who seem more interested in taking the money than the conditions attached.

Municipalities are provincial jurisdiction.

Bill 18 mandates that entities within Alberta’s jurisdiction, such as municipalities, universities, school boards, housing agencies, and health authorities, must seek the province’s approval before engaging in, modifying, extending, or renewing agreements with Ottawa.

Agreements between the federal government and provincial entities lacking Alberta’s endorsement will be deemed illegal under this legislation.

That’s Premier Smith’s message.

She’s had enough of it.

“It is not unreasonable for Alberta to demand fairness from Ottawa. They have shown time and again that they will put ideology before practicality, which hurts Alberta families and our economy. We are not going to apologize for continuing to stand up for Albertans so we get the best deal possible.

“Since Ottawa refuses to acknowledge the negative impacts of its overreach, even after losing battles at the Federal and Supreme Courts, we are putting in additional measures to protect our provincial jurisdiction to ensure our province receives our fair share of federal tax dollars and that those dollars are spent on the priorities of Albertans.”

Municipal Affairs Minister Ric McIver had additional thoughts:

“For years, the federal government has been imposing its agenda on Alberta taxpayers through direct funding agreements with cities and other provincial organizations. Not only does Alberta not receive its per capita share of federal taxpayer dollars, the money we do receive is often directed towards initiatives that don’t align with Albertan’s priorities.

“Albertans from all corners of the province expect our federal share of taxes for roads, infrastructure, housing and other priorities – not federal government political pet projects and programs in select communities.”

The Provincial Priorities Act is based on existing provincial legislation in Quebec – called “An Act Respecting the Ministère du Conseil executif” – which prohibits any municipal body from entering into or negotiating an agreement with the federal government or its agencies without express authorization from the Quebec government.

That’s right – the Quebec government has the same rule!

So, this boils down to the same argument we’ve been making for years – if Ottawa wants to step into our backyard, it must first seek Alberta’s approval.

Enough is enough – we won’t stand idly by as our interests are trampled upon.

It’s time for Ottawa to recognize Alberta’s autonomy and respect our right to determine our own future.

At the Free Alberta Strategy, we know that constant vigilance is necessary – for every fence we put up, the federal government tries to find a way around it.

We’ll continue to bring you information about what’s happening in Alberta’s backyard and fighting to keep Ottawa out.

The Free Alberta Strategy Team

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Alberta

Building a 21st century transit system for Calgary

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From the Frontier Centre for Public Policy

By Randal O’Toole

Calgary Transit is mired in the past, building an obsolete transit system designed for an archaic view of a city. Before the pandemic, transit carried 45 percent of downtown Calgary employees to work, but less than 10 percent of workers in the rest of the Calgary urban area, showing that Calgary Transit doesn’t really serve all of Calgary; it mainly serves downtown.

That would have worked in 1909, when Calgary’s first electric streetcars began operating and most jobs were downtown. By 2016, less than 15 percent of Calgary jobs were downtown, and the pandemic has reduced that number further.

Rather than design a transit system that serves the entire urban area, Calgary Transit light-rail system reinforced its downtown focus. Transit ridership has grown since the city’s first light-rail line opened in 1981, but it was growing faster before the light rail began operating than it has since then. Now Calgary Transit is planning even more downtown-oriented light-rail lines.

Light rail is an expensive form of low-capacity transit. The word “light” in light rail refers not to weight but to capacity: the American Public Transportation Association’s transit glossary defines light rail as “an electric railway with a ‘light volume’ traffic capacity.” While a light-rail train can hold a lot of people, for safety reasons a single light-rail line can move no more than about 20 trains per hour in each direction.

By comparison, Portland, Oregon runs 160 buses per hour down certain city streets. An Istanbul busway moves more than 250 buses per hour. Bogota Columbia busways move 350 buses per hour. All these transitways cost far less per mile than light rail yet can move more people per hour.

Once they leave a busway, buses can go on any city street, reaching far more destinations than rail. If a bus breaks down or a street is closed for some reason, other buses can find detours while a single light-rail breakdown can jam up an entire rail line. If transportation patterns change because of a pandemic, the opening of a new economic center, or the decline of an existing center, bus routes can change overnight while rail routes take years and cost hundreds of millions of dollars to change.

To truly serve the entire region, Calgary Transit must recognize that buses are faster, more flexible, and can move more people per hour to more destinations at a lower cost than any rail system. It should also recognize that modern urban areas have many economic centers and use buses to serve all those centers.

Besides downtown, Calgary’s major economic centers—the airport, the University of Calgary, Chinook Center, the Seton health center, and others—are mostly located near freeway on- and off-ramps. Calgary Transit should identify ten or so such centers geographically distributed around the region. It should locate transit centers—which need be no more than curbside parking reserved for buses with some modest bus shelters—near the freeway exchanges closest to each center.

It should then operate frequent (up to five times per hour) non-stop buses from every center to every other center. A few secondary transit centers might have non-stop buses operate to just two or three other centers. Local bus routes should radiate away from each center to serve every neighborhood of the Calgary urban area.

Since non-stop buses will operate at freeway speeds, the average speed of this bus system will be more than double the average speed of Calgary’s current bus-and-rail system. Transit riders will be able to get from any corner of the urban area to any other part of the urban area at speeds competitive with driving.

Such a polycentric system will serve a much higher percentage of the region’s workers and other travelers than the current monocentric system yet cost no more to operate. It will cost far less to build than a single rail line since most of the necessary infrastructure already exists. While some may worry that buses will get caught in congestion, the solution is to fix congestion for everyone, not spend billions on a slow rail system that only serves a few people in the region.

It is time for Calgary Transit to enter the 21st century. A polycentric bus system may be the best way to do it.

Randal O’Toole is a transportation policy analyst and author of Building 21st Century Transit Systems for Canadian Cities. 

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