Ottawa, ON – The Honourable Andrew Scheer, Leader of Canada’s Conservatives, today tabled the Supporting New Parents Act which will offer tax relief to young families.
“This important bill will give Canadian parents – who make so many sacrifices for their new children, including a leave from work — a break by eliminating the federal tax on parental leave benefits,” said Scheer.
Joined by local families at a roundtable event in Ottawa last week, Scheer emphasized the importance of providing a little more relief for parents welcoming a new child to the family.
“Welcoming a child into a young family is an incredibly special moment for so many parents,” said Scheer. “Canada’s Conservatives understand that the government shouldn’t be taxing the time parents take to be with their children during those important early years.”
Currently, Canadians taking advantage of EI maternity benefits and EI parental programs still pay federal income tax on the money they receive. The Supporting New Parents Act will create a federal non-refundable income tax credit for any income earned under these programs. Residents of Quebec who receive benefits under the Quebec Parental Insurance Plan would be eligible for a tax credit of an equivalent amount.
“A Canadian who before going on EI earned $50,000 per year would be eligible for a tax credit of around $4,000,” said Scheer. “For any young family, this important tax relief could make a huge difference for young parents in the costs of raising an infant. This is so important at a time when the cost of living continues to rise for parents under this Liberal government.”
This announcement is among the first steps in outlining a positive Conservative vision for Canadians.
“Life has gotten more expensive for young families under Justin Trudeau, and Canada’s Conservatives are bringing forward the ideas that address the real challenges families face,” said Scheer.
BACKGROUNDER: THE SUPPORTING NEW PARENTS ACT
On February 1, 2018, the Hon. Andrew Scheer announced the Supporting New Parents Act. The bill was tabled in the House of Commons on February 5, 2018.
The purpose of the legislation is to remove federal income tax from benefits received under the EI maternity and EI parental programs.
The Critical Early Years
The arrival of a new child is one of the most important moments in a parent’s life. Yet, because of the financial pressures that come with additional costs of caring for a newborn and the decision to take leave from one’s employment, it can also be a stressful time for a parent. For this reason, the proposed legislation would take steps to provide parents with additional tax relief.
Canada’s Conservatives understand that the government should not be taxing the time parents take to bond with their new child.
- The Supporting New Parents Act would remove federal income tax from EI maternity and EI parental benefits by providing a non-refundable tax credit for any income earned under these two programs. A non-refundable tax credit amounts to a 15% tax rebate on these benefits.
- It also provides a tax credit of an equivalent amount for residents of Quebec who receive benefits under the Quebec Parental Insurance Plan (QPIP).
- The benefit to an average Canadian whose regular salary is $50,000 would be about $4,000.
- The tax credit is for EI maternity benefits and EI parental benefits.
- Under EI maternity, the birth mother can receive benefits for up to 15 weeks.
- Under EI parental, new parents – either parent or a combination of both – can receive additional benefits for up to 35 weeks.
- Under the recent expansion to EI, parental benefits, parents can take benefits up to 61 weeks at a reduced wage replacement of 33%.