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Federal-Provincial/Territorial National Child Benefit Program Initiative

Plans, Spending and Results

Name of lead department: Human Resources and Skills Development Canada

Lead Department Program Activity: Income Security

Start Date: 1998

End Date: Ongoing

Total Federal Funding Allocation (from start date to end date): Statutory

Description of the Horizontal Initiative (including funding agreement):

Through the Federal-Provincial/Territorial (F-P/T) National Child Benefit initiative, the Government of Canada is working with provincial and territorial governments See footnote 1 to provide income support, as well as benefits and services, for low-income families with children. The initiative also includes a First Nations component.

Shared Outcomes:

The National Child Benefit initiative has three goals:

  • Help prevent and reduce the depth of child poverty;
  • Promote attachment to the labour market by ensuring that families will always be better off as a result of working; and
  • Reduce overlap and duplication by harmonizing program objectives and benefits and simplifying administration.

Annual F-P/T National Child Benefit Progress Reports include information on the level of spending by all jurisdictions. There is a data collection process to which all participating jurisdictions contribute in order to present comparable information on National Child Benefit-related programs and services for low-income families with children. The data submitted by each jurisdiction is reviewed jointly to ensure consistency in reporting. To obtain the most recent Progress Report or for further information, please visit the F-P/T National Child Benefit website: www.nationalchildbenefit.ca.

Federal Spending:

The Government of Canada contributes to the National Child Benefit initiative through a supplement to its Canada Child Tax Benefit called the National Child Benefit Supplement. In addition to the base benefit of the Canada Child Tax Benefit, which is targeted to both low- and middle-income families, the National Child Benefit Supplement provides extra income support to low-income families with children. Federal spending on the Canada Child Tax Benefit, including the National Child Benefit Supplement, is tracked by the Canada Revenue Agency, which is responsible for its administration and delivery. As a tax benefit, Finance Canada is responsible for policy related to the Canada Child Tax Benefit and the preparation of spending forecasts.

In 2010-2011, total annual federal support delivered through the Canada Child Tax Benefit, including the National Child Benefit Supplement, was projected to reach $10.09B, including a projected $3.79B through the National Child Benefit Supplement.

Provincial and territorial and First Nations Spending:

Under the National Child Benefit initiative, provinces, territories and First Nations provide benefits and services that further the goals of the initiative. The National Child Benefit Progress Report: 2007, reports that in 2006-2007, provinces, territories, and First Nations spending was estimated at $833.6M in programs and services in key areas such as child/day care initiatives, child benefits and earned income supplements, early childhood services and children-at-risk services, supplementary health benefits, and youth initiatives. This includes First Nations reinvestments in programs and services which were estimated to be $52.7 million in 2006-2007 and $54.8 million in 2007-2008.

Indicators and Impacts:

The F-P/T National Child Benefit Progress Report: 2007 includes an analysis of both societal level indicators, which measure areas such as low income and labour force attachment and do not infer that any changes are the result of the initiative, and direct outcome indicators, which measure only those changes that are directly attributed to the National Child Benefit initiative.

With respect to societal level indicators, the report shows that the proportion of families with children living in low income has declined significantly since the mid-1990s, decreasing from 17.6 percent in 1996 to 10.5 percent in 2005, based on Statistics Canada's post-tax low-income cut-offs. During this period, the number of children living in low income decreased from 1,304,000 in 1996 to 787,894 in 2005, a decrease of 516,106 children. See footnote 2

With respect to direct outcome indicators, the report estimates that in 2005, as a direct result of the National Child Benefit initiative:

  • 171,000 children in 78,800 families were prevented from living below the Market Basket Measure (MBM) low-income thresholds, a reduction of 13.7 percent. This means that in 2005, there were 13.7 percent fewer families with children living in low income than there would have been without the National Child Benefit. These families saw their average disposable income increase by an estimated $2,400, or 9.5 percent.
  • For those families with children who remained in low income, the National Child Benefit improved their disposable income by an average of $1,900 (10.7 percent). This means that the low-income gap (the additional amount of income needed by low-income families to reach the low-income line) was reduced by 20.4 percent in 2005.

In addition, in June 2005, F-P/T governments released a comprehensive evaluation of the first three years of the National Child Benefit initiative (1988-1999, 1999-2000, 2000-2001). The evaluation compiled evidence from a number of studies and showed that the National Child Benefit initiative is meeting its goals. In addition, another evaluation is underway. Results are expected to be published in 2011.

For a complete discussion of indicators, please see Chapters 4 and 5 of the National Child Benefit Progress Report: 2007. For a discussion of evaluation results, please see the Evaluation of the National Child Benefit Initiative: Synthesis Report. These reports are available free of charge on the National Child Benefit website, at: www.nationalchildbenefit.ca.

Governance Structure(s): The National Child Benefit initiative Governance and Accountability Framework outlines the key characteristics of the F-P/T partnership: cooperation, openness, flexibility, evolution and accountability. As a co-operative effort among governments, the National Child Benefit initiative combines the strengths of a national program with the flexibility of provincial and territorial initiatives designed to meet the specific needs and conditions within each jurisdiction.

With respect to accountability, under the Governance and Accountability Framework, F-P/T Ministers Responsible for Social Services have committed to sharing data on reinvestment initiatives and reviewing results and outcomes achieved in order to identify best practices. F-P/T governments have also agreed to report annually to the public with a primary focus on performance of the initiative. To date, nine annual progress reports have been published, as well as a synthesis report on a comprehensive evaluation of the first three years of the initiative.

The Federal Role:

Under the National Child Benefit initiative, the Government of Canada provides additional income support to low-income families with children via the National Child Benefit Supplement component of the Canada Child Tax Benefit. Canada Revenue Agency delivers these benefits to families.

Human Resources and Skills Development Canada is responsible for policy development with respect to the F-P/T National Child Benefit initiative, and the Minister of Human Resources and Skills Development represents the Government of Canada in this F-P/T initiative.

The Canada Child Tax Benefit (including the National Child Benefit Supplement) is a tax benefit, and is administered by Canada Revenue Agency. Aboriginal Affairs and Northern Development Canada and Citizenship and Immigration Canada have roles in reinvestments and investments.

The Provincial and Territorial Role:

Under the F-P/T National Child Benefit initiative, provinces, territories and First Nations provide benefits and services that further the goals of the initiative. The initiative is designed so that provinces, territories and First Nations have the flexibility to develop and deliver programs and services that best meet the needs and priorities of their communities. As part of this flexibility, provinces and territories may adjust social assistance or child benefit payments by the full or partial amount of the National Child Benefit Supplement. This approach has resulted in families on social assistance being no worse off in terms of their level of benefits, while providing additional funds for new or enhanced provincial and territorial programs benefiting low-income families with children.

It is important to note that, as the National Child Benefit initiative has matured, the majority of provinces and territories no longer recover increases to the National Child Benefit Supplement. This means that the vast majority of children living in low-income families, including those on social assistance, are currently receiving some or all of the National Child Benefit Supplement.

Under the F-P/T National Child Benefit initiative, provincial and territorial governments, along with First Nations, have committed to re-allocating available social assistance funds into benefits and services for children in low-income families that further the goals of the initiative. Jurisdictions have focused reinvestments primarily in key areas:

  • Child Benefits and Earned Income Supplements;
  • Child Care;
  • Early Childhood Services and Children-at-Risk Services;
  • Supplementary Health Benefits;
  • Youth Initiatives; and
  • Other Benefits and Services.

First Nations Role:

The federal government is responsible for ensuring programs for First Nations children on reserve are comparable to those available to other Canadian children. Under the National Child Benefit, First Nations have the flexibility to reinvest savings from adjustments to social assistance into programs and services tailored to meet the needs and priorities of individual communities. Some 500 First Nation communities participate in the National Child Benefit and implement their own programs.

Contact information:
François Weldon, Acting Director General
Social Policy Directorate
Strategic Policy and Research Branch
HRSDC
(819) 994-3184
Contact François Weldon by email: francois.weldon@hrsdc-rhdcc.gc.ca

Return to footnote reference 1 The Government of Québec has stated that it agrees with the basic principles of the National Child Benefit. Québec chose not to participate in the initiative but has adopted a similar approach to the National Child Benefit. Throughout this text, references to joint F-P/T positions do not include Québec.

Return to footnote reference 2 Statistics Canada’s post-tax low-income cut-offs (LICOs) are used to examine historical trends in low income as data using the Market Basket Measure (MBM) is only available since 2000.