Background_and_Policy_Context_on_Ontario_Child_Benefit

Policy Analysis Paper Student: J. Mrda Background and Policy Context on Ontario Child Benefit During the summer of 2009 the McGuinty government has proposed; after much dedicated, valuable researched time and hard work over and over again, to build a prosperous opportunity for Low-Income families and children living in Ontario (Backgrounder, 2009). The whole purpose of this new and improved Ontario Child Benefit policy is to reduce Ontario`s children poverty rate and the poverty rate in general. The Liberals main targeted goal is set out to reduce the number of children living in poverty by 25 per cent over the next 5 years (approx. 90,000 kids) (Backgrounder, 2009). The plan has been set out in place. Starting in the summer months of 2009 each low-income family will receive more money than the previous rate of a maximum of $600 dollars a year, in order to help with the raising of their children to reach their full potential (Backgrounder, 2009). The benefit is set out to reach 1.3 million kids and is almost doubling to a maximum of $1,100 per child this year (Backgrounder, 2009). Who is eligible and how can they apply: Families with a yearly income of $20,000 or less will receive the full Ontario Child Benefit plan for each child in their care (Backgrounder, 2009). The parents who are earning more may also be eligible, based on the number of children under 18 and the family yearly income. Parents don’t need to apply for the Ontario Child Benefit. To be eligible they must officially file their income taxes on a yearly basis, register for the Canada Child Tax Benefit, have a child(ren) under age 18, and be permanently living in Ontario (Backgrounder, 2009). With this great plan in action, why is the poverty issue still a problem we might wonder' Well there are many other ways of fixing the problem, which need to be considered into the equation. Increasing the Ontario Child Benefit yearly fee to all families in need is just one step in the process of reducing child poverty, here are some other examples that may be beneficial in the process: increase national child benefit to $5,100 annually (from $3,416 now), expand eligibility for Employment Insurance, increase federal working tax benefit to $2,400 annually (from $1,044 now), Federal minimum wage of $11 per hour, national housing plan; with money for social housing, national child-care program for children up to age 12, employment equity and other strategies to help visible minorities, targets and timetables to cut poverty for aboriginal families on and off reserve, etc (Monsebraaten, 2009). Therefore, we will dissect this issue further to find out what will happen in the long run, and who will have the final say in the matter. Problem Definition The liberals, especially Mr. McGuinty have a situation at hand. The leading conservative party is not completely supportive of the new Ontario Child Benefit policy and funding situation. The conservative party believes that that valuable money being thrown at low-income families can be used elsewhere, such as in the health care system or education fund. "We will not balance the budget by cutting transfer payments for health care or education" stated by Finance Minister Jim Flaherty (Goar, 2010). What about social assistance, no one cares to mention anything about funding the parts portraying to social assistance! Interestingly enough, low-income Ontarians are being overlooked; once again no surprise there (Goar, 2010). There was one passing referencing to Premier Dalton McGuinty's goal of reducing poverty by 25 per cent by 2013 recently in the month of March (Monsebraaten, 2009). However, everyone assumes that ``Mr. McGuinty is not all what he portrays to be, as budget day approaches, anti-poverty groups aren't expecting much`` sad to say (Goar, 2010). ``They know times are tough. They know education, not poverty reduction, is McGuinty's priority`` (Goar, 2010). ``They know the poor are always told to wait when there is a deficit`` (Goar, 2010). They'd like to trust the premier, but all the outcomes make it tough! ``The provincial budget on March 25 will end the uncertainty about social assistance rates, affordable housing and subsidized childcare`` (Goar, 2010). Most anti-poverty groups are crossing their fingers right now such as the Ontario Coalition for Better Childcare (in support of subsidized childcare to help out low-income families find better opportunities of work) (Goar, 2010). ``Social assistance rates remain 60 per cent below Statistics Canada's low-income cut-off, seven years after the Liberals took power (an individual receives $585 per month – $364 for shelter and $221 for "basic needs.")`` (Goar, 2010). ``The McGuinty government has yet to deliver its 10-year provincial housing strategy. And Medical officers of health across the province have been calling since 2007 for a basic nutrition allowance so social assistance recipients can eat properly`` (Goar, 2010). No response has been given in return. ( Policy Alternatives Until the federal and provincial/territorial governments reach some form of agreement to work in a cooperative and coordinated way to fight poverty in Canada, most anti-poverty organizations and social policy advocates will call on the federal government to take immediate action within its jurisdiction. They are asking the federal government to strengthen Employment Insurance, to invest more on federal work tax credits, to increase the Canada Child Tax Benefit and the National Child Benefit Supplement, to review the adequacy of Old Age Security and Guaranteed Income Supplement payments for seniors, and to substantially increase its investments in early learning and child care, social housing and disability-related supports (Monsebraaten, 2009). However, we will focus our attention on two important policy alternatives which are, expanding the eligibility for Employment Insurance, and increasing the federal working tax benefit to $2,400 annually (from $1,044 now) (Monsebraaten, 2009). The Employment Insurance is a financial aid program that can temporary support those who are currently unemployed; unemployed meaning not able to work due to reasons of sickness, childbirth, or parenting; or who are providing care or support to a family member who is gravely ill with a significant risk of death (Canada, 2010). EI is currently helping Canadians that are hardest hit by the recession. Here are some of the options of aid: Aboriginal Skills and Employment Partnership, Aboriginal Skills and Training Strategic Investment Fund, Apprenticeship Completion Grants, Better Outcomes for Long-Tenured Workers, Canada Summer Jobs, Employment Insurance and Extended Benefits, Employment Insurance Maternity and Parental Benefits for the Self-Employed, Employment Insurance Premium Rate, Foreign Credential Recognition, Labour Market Development Agreements, Strategic Training and Transition Fund, Targeted Initiative for Older Workers, Wage Earner Protection Program, Work Sharing, YMCA, and YWCA Grants for Youth Internships (Canada, 2010).  The Ontario’s tax plan for jobs and growth on the other hand; contains a fair and balanced package of tax cuts for both people and businesses (Steele, 2009). It will increase business investment, create new jobs, raise incomes and allow for price reductions on many consumer purchases (Steele, 2009). How does this plan help low-income families you may wonder' Here are some of the few ways: almost 3 million low-income Ontario families will receive a new, permanent sales tax credit of up to $260 for each adult and child per year - one of the most generous in Canada (Backgrounder, 2009). 90,000 Ontario taxpayers with low incomes will pay no Ontario personal income tax thanks to changes included in the comprehensive tax package (Backgrounder, 2009). A new Ontario property tax credit will provide an additional $270 million in property tax relief every year to low- to middle- income Ontario homeowners and tenants, etc (Backgrounder, 2009). So which is the best policy alternative to benefit in being funded more by the federal government' We have to evaluate them first ( Evaluation of Policy Alternatives Negative & positive aspects toward the social and economic benefits of the federal working tax benefit: As a result of the inclusive tax measures in the 2009 Ontario Budget, not including federal assistance, there will be an estimated overall reduction of $3.4 billion in tax payoff over the next four years (Cowan, 2010). These measures include a personal income tax cut for 93% of Ontario income tax payers (Cowan, 2010). The measures in place in the Budget create a balanced tax package for people and businesses that will make today’s economy more competitive when the current recession ends. To answer the question, yes the government will be collecting more money from the public by implementing this new HST tax, but it is done in a very structured and balanced way that makes it seem like it is a win-win situation for the citizens and the government at power. What I mean is that, if there is one low tax to worry about, we can technically save more money than we would be spending. We might have the urge to invest in more or open up private businesses because of the money we have saved. Because the tax payoffs are being cut-off extremely, than reductions on consumer purchases are going to be extreme, making the customers happy! And the perks are great for low-middle- income families as mentioned above in the policy alternative section. ( Negative & positive aspects toward the social and economic benefits of the expanding of eligibility of employment insurance: The governance and management of the EI Account is improved by the Canadian Employment Insurance Financing Board funded by the federal budget (Canada, 2010). This board takes care of all the duties that are in relation to keeping the right amount of money in the EI account for all the citizens in need. To maintain the stability of EI premium rates, the Board will be limited in changing the rates by a maximum of 15 cents per year (Canada, 2010). Human Resources and Social Development Canada (part of the Municipal government of Canada) will continue to be responsible in relation to EI benefits and through Service Canada for program delivery to ensure that the EI program remains available and eligible to all of the needs of Canadians (Canada, 2010). Socially, this should help out the citizens in a tremendous amount because knowing that there will consistently be funding for their time of need is a security blanket at most. Economically, this will be affecting the tax payers’ pockets and hard work produced daily. Therefore, it can also be seen as a win-win situation for the citizens and the government; in such that a particular tax payer at a certain time might get layed off for example from his so called secured and stable job that just went bankrupt in the last second. Thank goodness for EI, the citizens have something to fall back on in these unfortunate situations. ( Recommendation I recommend the increase in the federal working tax benefit solely because it is a win-win situation for the citizens and the government at power as stated earlier. Just to emphasize on certain points once again, clearly it is the better choice. So if there is one low tax to worry about right' We can technically save more money than we would be spending. Citizens might develop the urge to invest in more or open up private businesses because of the money they have saved. Because the tax payoffs are being cut-off extremely, than reductions on consumer purchases are going to be extreme, making the customers happy! And the perks are great for the low-middle- income families as being mentioned momentarily. ( Here are some of the few perks: almost 3 million low-income Ontario families will receive a new, permanent sales tax credit of up to $260 for each adult and child per year - one of the most generous in Canada (Backgrounder, 2009). 90,000 Ontario taxpayers with low incomes will pay no Ontario personal income tax thanks to changes included in the comprehensive tax package (Backgrounder, 2009). A new Ontario property tax credit will provide an additional $270 million in property tax relief every year to low- to middle- income Ontario homeowners and tenants, etc (Backgrounder, 2009). References (APA Style Referencing) (2010, March 11). Canada Employment Insurance Financing Board. Human Resources and Skills Development Canada. Retrieved March 11, 2010, from http://www.hrsdc.gc.ca/eng/employment/ei/ceifb/index.shtml (2009, October 22). Backgrounder helping Ontarians Confront the Global Economic Challenges. Ontario.ca. Retrieved March 05, 2010, from http://www.fin.gov.on.ca/en/budget/fallstatement/2009/backgrounder1.html Broadbent, E. (2009, November 23). How to end child poverty: Tax the rich. The Globe and Mail. Retrieved March 10, 2010,from http://www.theglobeandmail.com/news/opinions/how-to-end-child-poverty-tax-the-rich/article1374806/ Cowan, T. Pratt, D. Torbin, J. (2010, March 05). Federal Budget 2010. The Globe and Mail. Retrieved March 15, 2010, from http://www.theglobeandmail.com/news/national/federal-budget-2010/article1490587/ Early Childhood Education and Care: Next Steps. (2009). Canada: Canada. Senate Committee Reports Goar, C. (2010, March 15). Goar: Have the poor fallen off the agenda'. The Star. Retrieved March 20, 2010, from http://www.thestar.com/opinion/article/779267--goar-have-the-poor-fallen-off-the-agenda Monsebraaten, L. (2009, November 24). Promises to end child poverty easier than progress. Parent Central. Retrieved March 11, 2010, from http://www.parentcentral.ca/parent/newsfeatures/article/729801--promises-to-end-child-poverty-easier-than-progress Steele, A. (2009, March 25). Andrew Steele looks at the underlying trends and backroom strategies driving contemporary politics. The Globe and Mail. Retrieved March 17, 2010, from http://www.theglobeandmail.com/blogs/andrew-steele/article976966.ece