The National Child Benefit Progress Report 2006

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Summary

The National Child Benefit (NCB) is a joint initiative of Canada's federal, provincial and territorial governments, ² which includes a First Nations component. The NCB initiative combines two key elements: federal monthly payments to low-income families with children, and benefits and services designed and delivered by the provinces, territories and First Nations to meet the needs of low-income families with children in each jurisdiction.

The NCB initiative has three goals:

• to help prevent and reduce the depth of child poverty;
• to promote attachment to the labour market by ensuring that families will always be better off as a result of working; and,
• to reduce overlap and duplication by harmonizing program objectives and benefits, and through simplified administration.

This eighth report to Canadians on the NCB is a key element of the National Child Benefit Governance and Accountability Framework, as it fulfils the commitment of Federal, Provincial and Territorial Ministers Responsible for Social Services to report annually to Canadians on progress made under this initiative.

Chapter 1 provides information about federal support for low-income families with children. The Government of Canada provides benefits directly to low-income families with children through the NCB Supplement. For the program year that ended June 2006, the Government of Canada provided $3.2 billion through the NCB Supplement to 1.6 million families with 2.8 million children.

Chapter 2 provides information about programs and services for low-income families with children provided by provinces, territories and First Nations as a result of the NCB initiative. Provinces and territories have the flexibility to adjust social assistance or child benefit payments by an amount equivalent to the NCB Supplement and to reinvest savings in benefits and services for low-income families with children.

Total reinvestments and investments in programs and services for children and their families through the NCB initiative are estimated to be $873.9 million for 2005-2006, and $847.8 million for 2006-2007. Provinces and territories reinvested and invested an estimated $813.4 million in 2005-2006, and $797.4 million in 2006-2007. Citizenship and Immigration Canada reinvested an estimated $2.5 million in 2005-2006, and $2.1 million in 2006-2007.

Chapter 3 describes the First Nations National Child Benefit Reinvestment initiative, through which the Government of Canada and First Nation governments are cooperatively addressing the needs of low-income families with children on reserve. First Nations investments and reinvestments in programs and services are estimated to be $58.0 million in 2005-2006, and $48.3 million in 2006-2007.

Chapter 4 contains information about societal level indicators related to the NCB, such as the incidence, depth and duration of low income among families with children. Using Statistics Canada's post-tax Low-Income Cut-Offs (LICOs,) the report shows that the percentage of families with children living in low income has declined significantly from a peak of 17.6 percent in 1996. In 2004, the incidence of low income among families with children fell slightly to 11.6 percent from 11.7 percent in 2003.

Finally, Chapter 5 contains an analysis of the direct impact of the NCB in preventing and reducing low income among families with children. Using post-tax LICOs, the analysis estimates that, in 2004, as a direct result of the NCB, 125,000 children in 59,000 families were prevented from living in low income, a 12.1 percent reduction. These families saw their average disposable income increase by an estimated $2,400, or 9.3 percent. The analysis also estimates that the low-income gap (the depth of low income for all families with children) was reduced by $740 million, a decline of 18.5 percent.

All NCB partners remain committed to working toward improving the situation of families with children in Canada, and informing Canadians about progress made.