The Averages lose ground

Back in the day, as they say, when we were raising children and paying our mortgage, I might have liked Stephen Harper’s plan for family income splitting and the Universal Child Care Benefit. Not really thinking too hard about things, I might have even voted for it, and the Conservatives who have floated this plan. But I wonder if it would have got me ahead in the world.

Back in the day, as they say, when we were raising children and paying our mortgage, I might have liked Stephen Harper’s plan for family income splitting and the Universal Child Care Benefit.

Not really thinking too hard about things, I might have even voted for it, and the Conservatives who have floated this plan. But I wonder if it would have got me ahead in the world.

We were Harper’s target demographic: one-income family with kids. That would be one-income married family with kids. Single parents are not the prime minister’s target demographic.

I’ve been trying for a while now to figure out if we would have been better off back then if we had income splitting — and I can’t definitely judge either way.

Maybe that’s why I have someone else do our income taxes. Or maybe that’s because the income splitting benefit is so marginal, you can’t see it on the back of an envelope.

I was an average income earner most of my life. My income didn’t surpass the national average until after we’d paid our mortgage and the kids were gone. The benefits of a university education, I guess.

Half of Canadian workers earn less than roughly $32,000 a year. Because high income-earners raise the average, the average Canadian wage slave these days earns just over $48,000.

But suppose I became Mr. Average today, with a wife at home and four kids eight years and under, as I was for a while back then. Would Harper be as good a friend to me as Pierre Trudeau and Brian Mulroney were?

Hard to say but on average, not likely or not much.

Today, on my average $48,000 income, I can deduct $11,038 for myself, $11,038 for my non-working spouse, plus CPP, EI and all that other stuff to lower my taxable income. The refund for a dependent spouse today: $1,655.

The maximum benefit from income splitting: $2,000. Well, the equivalent of $350 would have been quite welcome, back in the day. I guess.

If I received the average benefit calculated for families with income splitting, it would be $1,140. But today’s Mrs. Average has an income and couldn’t be deducted as a dependent.

That would mean child care. That would mean costs.

Daycare costs up to $950 a month in Red Deer. Being average, we would make that $850 a month, per child.

The Universal Child Care Benefit is being raised to $160 a month for the kids not yet in school, and $60 a month once they get to school to age 17. So we, with three pre-schoolers costing a total of $2,550 a month for child care, would need to keep our receipts and claim the $2,070 a month that the benefit does not cover.

The $8,000 cap on what you can claim per child would have come to $840 a year short of total actual costs. (I’m told by people who looked at the numbers that with three kids, it’s cheaper to hire a live-out nanny, or for two kids it’s cheaper if the nanny lives in the house with you.)

So, for us, the decision today would have been pretty much the same as it was back in 1980s. Have Mrs. Average work full-time and put about half her take-home pay into child care (hoping for a refund at tax time)? Or just forget the hassle, stay home and be poor, rather than working full-time for an average salary but really keeping less than minimum wage at the end of the month?

We opted for full-time parenting and until the youngest was in school, we all just learned to be frugal. Well, thereafter as well.

The numbers that Harper has on the table today contain negligible new financial incentive to put Mrs. Average into the workforce when there are preschoolers in the house.

So how did we do it back then? Our average house was an eighth the cost of an average house today (although mortgage rates were triple today’s rates).

Utility bills back then were a tenth of what the Averages pay today. Car costs? The total price of gas in the 1980s was less than just the tax component of gasoline today. Gas mileage sucked, but nobody cared.

If Harper really wanted to buy our support, he’d ditch income-splitting altogether and just lower income taxes for the Modern Averages.

The Averages today earn $74,500. If they live in Alberta, that would be $94,460. That’s almost always with two-incomes, and almost none of them will get any benefit at all from income splitting.

They don’t have four kids, either, so the Universal Child Care Benefit (which doesn’t cover much) and the child care expenses deduction (which doesn’t last long considering the life of a family), don’t make for the hard decisions we made back in the day.

You know, I really don’t think Stephen Harper cares that much about us Averages.

Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.

Just Posted

Community cardiac awareness dinner and show to be held

Continued focus to bring cardiac catheterization lab to Red Deer

Red Deer businesses react to 2.02 per cent tax increase for 2018

Chamber would prefer zero increase, while DBA thinks it’s reasonable

Bring on the rodeo says Red Deer County mayor

Canadian Finals Rodeo’s move to Red Deer good for whole region, says Red Deer County Mayor Jim Wood

Watch: Red Deer woman target of robbery in broad daylight, near police station

He looked me in the eye and said ‘I am going to kill you.’

Carjacking suspect arrested

Suspect behind failed carjacking attempts among long list of people arrested over last 10 days

WATCH news on the go: Replay Red Deer Jan. 21

Watch news highlights from Red Deer and Central Alberta

RDC chosen to host 2019 men’s volleyball national championship

Sports enthusiasts in Red Deer will have more to look forward to… Continue reading

Police is still looking for Second World War army passport owner

No one has claimed a rare Second World War German army passport… Continue reading

DJ Sabatoge and TR3 Band kick off Sylvan Lake’s Winterfest 2018

Central Alberta’s youngest DJ will open for TR3 Band kicking off Town… Continue reading

Two Canadians, two Americans abducted in Nigeria are freed

Kidnapping for ransom is common in Nigeria, especially on the Kaduna to Abuja highway

WATCH news on the go: Replay Red Deer Jan. 21

Watch news highlights from Red Deer and Central Alberta

Liberals quietly tap experts to write new paternity leave rules

Ideas include creating an entirely new leave benefit similar to one that exists in Quebec

Insurers say Canadian weather getting hotter, wetter and weirder

Average number of days with heavy rain or snow across Canada has been outside norm since spring 2013

Are you ready for some wrestling? WWE’s ‘Raw’ marks 25 years

WWE flagship show is set to mark its 25th anniversary on Monday

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month