The Conservatives’ Income Splitting Scheme Will Create More Inequity, According to Broadbent Institute

The majority of families with children under 18-years-old would receive little to no benefit from the Conservative’s income splitting scheme, according to The Big Split, a new study by the Broadbent Institute. Under this scheme, only 4 per cent of Canadian families–some of the wealthiest in Canada—would be eligible for a benefit of excess of $5,000, while the majority of Canadian families would receive less than $500.

“This study spells out clearly why the Conservatives’ income splitting scheme is a terrible idea. It would increase inequality and is skewed heavily toward a Mad Men-style family with a high-income earner and a stay-at-home spouse,” said Broadbent Institute Executive Director Rick Smith.

Benefits would also vary significantly by province, only adding more cons to the Conservatives’ income splitting scheme, benefits:

–  Nine out of 10 Canadian households would receive no benefit at all

– Under 2% of families in Canada with children under 18 would be eligible for the maximum benefit

– Just 7.4% of families in Quebec with children under 18 would receive a benefit of $2,000 or more, compared to 22.8% in Alberta and 19.5% in Saskatchewan; nationally, only one in seven Canadian families with children under 18 (13.8%) would see such a benefit

– 61.1% of Quebec families with children under 18 would see no benefit at all, compared to 44.1% in Alberta; nationally, 54.1% of all families that are the target of the scheme would receive no benefit at all

With a scheme like this, it is little wonder the gap between the rich and the poor is widening in Canada.  Today, the top one percent receives 14 per cent of all income in Canada, up considerably from 8 per cent in the 1980’s.

The scheme is unfair, states the Broadband Institute’s website.“…But it also translates into less opportunity and social mobility, and has a corrosive effect on the functioning of our democracy.”