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Provincial negotiations spur six-month wait for new federal child benefit

Last Updated Dec 8, 2015 at 6:40 pm EDT

OTTAWA – The federal Liberals will take the next few months to negotiate with provinces over a new national child benefit after advocates raised concerns the government’s plan could end up hurting those receiving provincial help.

Advocates have worried that any increase in benefits from the federal government could have negative effects on those receiving social assistance through provinces or municipalities, such as child care or housing subsidies.

Those subsidies are income tested, meaning the more a family earns, the less they receive in subsidies. The Liberals want to give more money to low-income earners through a new child benefit, but some provinces and cities may see the richer benefit as additional income and roll back subsidies to needy families.

Such issues are part of the reason the new child benefit, which the Liberals made a key plank in their campaign platform to woo families, won’t come into effect until July 1, said Families Minister Jean-Yves Duclos.

“We need to do this in consultation with provinces. Many of the provinces base their own system on the basis of the federal benefits,” Duclos said outside the House of Commons.

“We want to ensure the provinces will be able to do their work appropriately and for that we need to be in touch with them and make sure that everything runs as smoothly as possible.”

The new child benefit will replace the monthly universal child care benefit with an income-tested payment that will start at $6,400 a year for a child five and under, and $5,400 a year for children six to 17. Only those families earning less than $30,000 a year will receive the full amount; the government will reduce payments as incomes rise.

Until July 1, the government will continue paying out the universal child care benefit, which is worth $160 per month for every child under six and $60 per month for every child six to 17.

During the campaign, Prime Minister Justin Trudeau said the new benefit would be fair because it wouldn’t go to wealthy families — his own included.

On Tuesday, NDP Leader Tom Mulcair said the six-month wait for the promised Liberal benefit will mean the wealthiest families will continue receiving the universal child care benefit.

“There’s no reason he (Trudeau) couldn’t have done it this week,” Mulcair said. “If this was important to him, as he claims it is, why didn’t he get it done this week?”

He said the government should have some retroactive payment for low-income Canadians to compensate them for the money they missed out on during the first half of 2016 when the new child benefit was being worked out.

Duclos said the details of the new benefit will be unveiled when the Liberals table their first budget.