Reports confirm that the National Child Benefit contributes to reducing child poverty

OTTAWA, August 4, 2005 — Federal, Provincial and Territorial Ministers Responsible for Social Services today affirmed that the National Child Benefit contributes to reducing child poverty in Canada ¹. This is supported by an analysis they released today titled Impact of the National Child Benefit on the Incomes of Families with Children: A Simulation Analysis. It is also supported by two recently released reports: National Child Benefit Progress Report: 2003 released on April 6, 2005 and Evaluation of the National Child Benefit Initiative: Synthesis Report released on June 6, 2005 .

"Evidence continues to show that fewer families with children are living in low-income, in part because of the National Child Benefit,” said Ken Dryden, Minister of Social Development and federal co-chair of Federal, Provincial and Territorial Ministers Responsible for Social Services. “We know we have more to do, but these reports confirm that our ongoing commitment to the National Child Benefit is making a difference."

"With these reports, we are confident that the National Child Benefit is helping to reduce child poverty," said Chester Gillan, Minister of Health and Social Services for Prince Edward Island , and provincial co-chair of Canada ’s Social Services Ministers.

Taken together, these three reports show that the National Child Benefit (NCB) initiative is progressively preventing and reducing the depth of child poverty, promoting attachment to the labour market by ensuring that families will always be better off as a result of working, and reducing overlap and duplication. The reports also demonstrate the commitment of Federal, Provincial and Territorial Ministers Responsible for Social Services to report to Canadians on the progress of the NCB initiative.

Impact of the National Child Benefit on the Incomes of Families with Children: A Simulation Analysis

The Impact of the National Child Benefit on the Incomes of Families with Children: A Simulation Analysis confirms that the NCB initiative is having a positive impact on child poverty.

Based on Statistics Canada’s post-tax low-income cutoffs (post-tax LICOs), the analysis compared the actual child benefits structure in 2001 to what it would have been without the NCB. The results show that because of the NCB, there was a reduction of 8.9 percent in the number of low-income families, meaning that 94,800 children in 40,700 families were not living in low-income situations. For these families, the average disposable income was higher by an estimated 9.2 percent (about $2,200).

The analysis also found that the NCB had a positive impact on families with children who remained in low-income situations. For these families, the NCB reduced the low-income gap by 12.3 percent and increased their average disposable income by about 5.5 percent (about $900).

The National Child Benefit Progress Report: 2003

The National Child Benefit Progress Report: 2003 confirms that government investments for low-income families with children continue to increase. Federal support to low-income families in 2002-2003 has risen from $5.6 billion in 2001-2002 to $5.7 billion in 2002-2003. It is projected to reach $6.4 billion in 2004-2005.

The report further shows that provincial and territorial governments and First Nations have increased their expenditures for low-income children and families through the NCB initiative to $764.2 million in 2002-2003. This funding supports programs and services, including child benefits and earned-income supplements, child/day care initiatives, early childhood services and children-at-risk services, youth initiatives and supplementary health benefits.

Evaluation of the National Child Benefit Initiative: Synthesis Report

The Evaluation of the National Child Benefit Initiative: Synthesis Report compiles evidence from a number of studies and shows overall that the NCB initiative has had a positive impact on low-income families with children.

This report shows that the NCB initiative has reduced the number of families living with a low income, while improving their financial situation; that it has made work more financially attractive than social assistance for most families; and that it has enabled greater federal-provincial-territorial co-ordination and integration in the delivery of child benefits.

The Impact of the National Child Benefit on the Incomes of Families with Children: A Simulation Analysis, and The National Child Benefit Progress Report: 2003 are available at www.nationalchildbenefit.ca. 

The Evaluation of the National Child Benefit Initiative: Synthesis Report is available at www.nationalchildbenefit.ca  and at www.sdc.gc.ca. Technical evaluation reports are available upon request from Social Development Canada.

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For more information, please contact:

Media Relations
Social Development Canada
(613) 941-1110
Web site: www.sdc.gc.ca

Darlene Gillis
Communications Coordinator
PEI Department of Health & Social Services
tel: (902) 368-6172
fax: (902) 368-4969
email: ddgillis@gov.pe.ca

 ¹In this document, references to joint federal/provincial/territorial reports do not include Quebec . While the Government of Quebec agrees with the basic principles of the National Child Benefit, it chose not to participate in this initiative because it wanted control over income support for children in Quebec . However, Quebec residents benefit from the increased Canada Child Tax Benefit and from important investments made by the Government of Quebec towards family and childhood services as part of Quebec’s Family Policy.