The Liberals’ proposed Canada Child Benefit (CCB) is a historic advance in income security policy for families. It is a win-win initiative that will fight child poverty and boost the incomes of the middle class.

The CCB is everything that the present hodgepodge of child benefits is not. It is a single, simple and transparent social program, a far cry from the current collection of child benefits, which is hopelessly complicated and virtually impossible to decipher without a computer and a PhD.

With the Liberals’ proposed plan, what you see is what you would get because it would not be taxed. Ottawa’s current flagship child-care program, the Universal Child Care Benefit (UCCB), is taxed by the federal and provincial/territorial governments and so is worth less than its face value.

Moreover, couples must pay tax on their UCCB but single parents are exempt, which is unfair. The UCCB is a crazy-quilt of after-tax benefits that vary by family type, income and province or territory. The Canada Child Benefit, by contrast, is a nation-wide program that would treat all families equally.

The new proposed benefit would deliver its monthly payments in a fair and progressive manner geared to the level of family income. For children ages 5 and under, maximum benefits would be $6,400 a year ($533 monthly). Payments would decline as incomes rise, to end at $192,000. The maximum benefit for children ages 6 and over would be $5,400 annually ($450 per month) and would fall with increases in family income to end at $160,000.

The design of the proposed Canada Child Benefit is progressive because its value is tied to family income. By contrast, the government’s new so-called “family tax cut,” a form of income splitting, is a riches-for-the-rich scheme that favours well-off families with one income.

Another great shortcoming of the current Universal Child Care Benefit is that it is not indexed to inflation, so leaks value every year. The proposed Canada Child Benefit would be fully protected from inflation.

Despite its title, the Tories’ Universal Child Care Benefit is not tied to use of child care: Families can spend the money as they wish. If it truly is intended for child care, then why was the benefit recently extended to households with children ages 6 to 17 who are beyond the child-care stage? If the parents need some money for child-rearing costs — and most do — then why not add an amount to the existing Canada Child Tax Benefit intended for that purpose?

The proposed Canada Child Benefit is an evidence-based reform. It builds on research done by governments, think tanks and academics. This research found that previous similar measures had positive income and behavioural effects, such as reducing poverty, improving school test scores, reducing aggression and maternal depression, easing hunger and helping recipients move from welfare to work.

Over the years, the Caledon Institute has urged the federal government to build one big child benefit, with a target maximum payment set at the cost of living for a child in a low-income family — estimated at $5,700 this year. The Canada Child Benefit will more than meet this goal, with its maximum benefit of $6,400 per child age 5 and under.

The Liberals’ proposed policy has been carefully calibrated to protect benefits for low-income families while at the same time generating substantial gains for modest- and middle-income households.

Take the example of four families with different incomes, each with one child age 5 or under. A family with income of $15,000 would receive $575 more under the Canada Child Benefit than under the current system; a family that earns $45,000 would receive $2,030 more; a family with income of $90,000 would get $1,120 more; and an upper-middle income family with $140,000 would receive a small increase of $195.

The Canada Child Benefit is affordable because it would be financed by eliminating three existing payouts. Their consolidation into one benefit would reduce current confusion, dismantle the programs that are unfair − the Universal Child Care Benefit and income splitting − and build on the existing Canada Child Tax Benefit that has a progressive design.

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The Canada Child Benefit promises to be a superior social program — powerful, progressive, fair, transparent and efficient. It will help fight poverty and improve the incomes of middle-class families.

Ken Battle is president of the Caledon Institute of Social Policy. Sherri Torjman is vice-president of Caledon and a member of Justin Trudeau's Economic Advisory Council.

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