Parents warned to anticipate bigger [federal] tax bill
Kathleen Harris, London Free Press Parliamentary Bureau
21 Jan 07

EXCERPT

OTTAWA -- The Conservative government could face a bitter backlash from parents in coming weeks as the federal taxman demands his cut of the new $100-a-month child-care cheques.

Early next month, families who receive the Universal Child Care Benefit will be given a statement of payments from the Canada Revenue Agency to be filed with 2006 returns.

A parent with three young children could be surprised to find they owe close to $400 for half the year's benefits in 2006, according to Liberal MP Bonnie Brown, who says it could create particular hardship for working poor and single parents.

…"And some won't have it. It will end up adding stress to the lives of those who are struggling already… The feds insist they've been up-front on the fact it's a taxable benefit, but critics say it was downplayed by Tories desperate to sell a flawed program.

Murray Gross, a spokesperson for Human Resources and Social Development Canada, insisted the department has tried to get the message out from the start….

"From the outset, the government has been clear that the UCCB would be treated as taxable income, and that it would be taxed in the hands of the lower-income spouse, ensuring that families get the greatest possible benefit," he said.

NDP MP Olivia Chow slammed the $31 million it cost to run the program in its first year.

Gross said that amount will decline to an expected $17 million a year by 2009-2010 or one per cent of the total amount, which he said falls below the average administrative cost of four per cent for similar programs.

Last month, 1.44 million families with 1.923 million children received the benefit.