Why Canada’s Child Care Tax Credit and Child Care Centres Are Still A Big Deal

By Kate O’Connor and J. Scott HorsleyUpdated August 08, 2018 11:05:25A tax credit for child care facilities that is part of the government’s Universal Child Care Benefit is still a big deal for some parents who live in rural communities.

But for others, the change has brought unexpected challenges.

The Child Care Assistance Program, which provides assistance for families who are eligible for it, has become an issue for parents whose income is too high to qualify for the $4,500 child care tax credit that helps cover the cost of child care.

The government announced the change on July 1, but only started paying child care expenses on October 1.

That meant some parents were left out of the program.

And the child care center tax credit is only a part of it.

There is a $2,000 tax credit plus another $500 in other taxes that apply for child cares in the province.

For some parents, the loss of the tax credit could mean losing out on a bigger portion of the child tax credits that are available to people who earn $40,000 or more annually.

“It’s definitely a concern, it’s not something that I think everyone is happy about, but we’re working hard on it,” said Jessica Sarno, who lives in Red Deer, Alta.

She pays about $10,000 a year in child care costs, but her income has been too high for the child credits.

“I’ve always had a good tax credit in my tax bracket, so I don’t see it as a big problem,” she said.

Sarno said her child care fees are covered by her employer and the federal government, but she’s not sure she’ll be able to access the $2.2 million child care credit.

“There’s going to be a big chunk of that [the credit] that’s going away because of it,” she explained.

“We’re in a situation where we’re really going to have to rely on government help to help us cover the costs of child cares.”

If we can’t cover the whole cost, we’ll just have to go into bankruptcy.

“The federal government has made the child childcare tax credit available to parents who make more than $60,000 annually.

But the tax credits were not made available to families with incomes less than $40 (about $22,000 for couples filing jointly).

Many parents who are not eligible for the tax-credit programs are worried that they won’t be able access the credit.

For Sarnos, it was a big blow because she earns $70,000.”

Now we’re going to start paying more tax,” she says.

Says another parent who lives outside of Alberta: “We are getting hit with the largest tax credit of any type that is going away.”

What do you think?

Should the tax break be extended to more people?


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