Children play at the Blessed Chiara Badano Child Care Centre in Stouffville, Ont., in May. Daycare costs have fallen for many families since the federal government announced $10-dollar a day daycare in 2021.Nathan Denette/The Canadian Press
Raising kids is expensive and child care costs are one of the main reasons young Canadians cite for choosing not to have kids.
But since the Canada-Wide Early Learning and Child Care initiative, or CWELCC, launched in 2021, child care costs have been dropping.
While we’re still not at the $10-a-day daycare goal for all Canadians, we have made significant strides. And that made me wonder, is the federal Canada Child Benefit enough to cover the child care costs for an average family?
In 2023, the typical two-parent family with children was earning a pretax income of $134,600 a year, according to Statistics Canada.
What is the CCB?
A tax-free benefit given to parents from the federal government, the CCB is essentially the government’s way of saying “thanks parents for providing us with a future taxpayer. Here’s some money to make your life a little better.”
Since the CCB is income-tested, you can use this calculator on the CRA website to see how much you would get. I dove into the math behind the calculator and discovered that if you have a child below the age of six and an adjusted family net income, or AFNI, of $37,487 or less, you will get the maximum benefit of $7,997 a year.
This amount gets clawed back at 7 per cent of the difference between the AFNI and $37,487 until $81,222. After that, the amount gets clawed back at 3.2 per cent of the difference, until an AFNI of $231,222, at which point you lose the benefit completely.
The math changes if you have more than one child, but the general idea is the same. You get the maximum per child if your AFNI is below $37,487, but after that part of it gets clawed back.
Here’s a table showing how much CCB you can expect to get based on your adjusted net family income and the number of kids you have under the age of six, which is when kids go to school and the CCB decreases.
Given that the median family pretax income in Canada is $134,600 and that only-child families are the most common type, according to Statistics Canada, my table shows a CCB of $3,227 a year per child.
In Ontario, for example, subsidized child care costs are capped at $22 a day, so parents typically pay $5,544 a year. That means the CCB can cover 58 per cent of the cost of their daycare.
And while that makes child care much more affordable, finding a subsidized spot is a whole other issue, especially for children under 18 months.
If you manage to secure a subsidized daycare spot, CCB will go a long way towards helping you afford daycare, regardless of the number of children you have.
Kristy Shen and Bryce Leung retired in their 30s and are authors of the bestselling book Quit Like a Millionaire.