Poverty Promises and Income Splitting

From The Catalyst Spring 2015

By Sara Hildebrand

Last fall, Prime Minister Stephen Harper announced that his government would implement family income splitting, a promise from the last election campaign. This was just weeks after the Canadian government tabled their unsatisfactory official response to the Millennium Kids’ Canada- wide petition.

In June 2014, 40 Canadian youth drove the nine-hour return trek from Toronto to see their petition tabled in the House of Commons. They received a standing ovation from Members of Parliament. Their petition urged the government to keep its promise on the United Nations Millennium Development Goals (MDGs) and to meet its target of committing 0.7 per cent of Gross National Product (GNP) to Official Development Assistance (ODA).

The MDGs are an unprecedented set of eight global poverty goals, agreed to by every UN member state in 2000. They address extreme poverty, universal education, gender equality, child mortality, maternal health, disease, the environment, and global partnership. The petition response was signed by Christian Paradis, Minister of International Development. It recounted Canada’s leadership role in launching the G8 Muskoka Initiative, spending $2.85 billion to improve global maternal, newborn, and child health (MNCH) over five years (2010-2015). It also noted Prime Minister Harper’s pledge of $3.5 billion to improve MNCH over the next five years (2015- 2020). Yet the petition response failed to address why there is a shortfall on the 0.7 per cent ODA target.

Canadians haven’t forgotten our collective promises to fulfill the MDGs and to end child poverty in Canada by 2000. According to Campaign 2000, one in five children in Canada live in poverty. The question we need to ask ourselves is, “Does the government’s level of commitment reflect the Canadian public’s strong commitment to keep our poverty promises?”

Millennium Kids Canada’s current development assistance spending is approximately $5 billion or 0.25 per cent of our GNP. If we add the recently pledged $3.5 billion over five years, it is only a small addition of 0.04 per cent of GNP per year. Data from 2013 shows that only five of 193 UN member states are fulfilling their 0.7 per cent aid promise: Norway, Sweden, Luxembourg, Denmark, and the United Kingdom. The UK recently allocated £11 billion ($21 billion) per year to international aid.

During the students’ visit to Canada’s Parliament, Lois Brown, Parliamentary Secretary to the Minister of International Development, likened Canada’s budget to family finances: to find more money we have to take it away from other areas. So here’s an idea—Pay It Forward Income Splitting.

As a stay-at-home parent, I am grateful for a government that values our profound yet unpaid role in Canadian families. But did anyone ask stay-at-home parents if we want to enjoy income splitting tax savings when there are so many Canadians, especially children and our Aboriginal neighbours, in significant need? I for one don’t want to benefit at that cost. It is time to stand shoulder to shoulder and pay it forward to keep our promises.

I appreciate the equity argument for income splitting. It calls for equal tax burdens for two families both with the same total earnings, whether by one breadwinner or the sum of two. However, a deeper understanding of justice requires action on poverty before we implement a policy like income splitting.

The petition response from the Minister noted that the “International Assistance Envelope…will be assessed alongside all other government priorities on a year-by-year basis.”

We are, therefore, asking our government to pay forward the projected $2.4 billion cost of income splitting to fulfill our Canadian and global poverty promises. Specifically, this means $1.2 billion to increase the Canada Child Tax Benefit to assist all Canadian families living in poverty. It also means $1.2 billion toward completing the MDGs with an emphasis on goals 4 and 5 (reducing child mortality and improving maternal health).

Let it not be said of our generation that we chose a little more comfort from the income splitting benefit over keeping our promises. Promises to end child poverty in Canada and respond to almost a billion people around the world going to bed hungry.

Let’s speak up on income splitting for families. Here’s how:

  • Contact your MP, the Minister of International Development, or the Prime Minister.
  • Ask all political candidates in your riding whether they will support paying forward the cost of income splitting.

Sara H, Sara Hildebrand is the founder and volunteer Director of Millennium Kids, which creates opportunities for youth to propel Canada forward to keep our Millennium Development Goals promise.

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