The Fiscal Cost of Indexing the Canada Child Benefit

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The Fiscal Cost of Indexing the Canada Child Benefit.pdf

PBO estimates that with indexation, the CCB will grow steadily over time.  This is in contrast to the projected decline if the CCB continued to be not indexed to the consumer price index (CPI).  The gap between the two represents the net fiscal cost of CCB indexation, presented in Summary Table 1 below.

The distribution of these benefits also changes with indexation.  The number of recipients in the highest income threshold continue to grow under both scenarios of indexation and no indexation.  As a result, the share of total CCB expenditures allocated to families with incomes above the highest income threshold will continue to grow.  Even so, the average benefits of the higher income families would continue to be lower than that of families with lower incomes, as it was under projections of the non-indexed CCB.

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