Ontario's Financial Accountability Office (FAO) has issued a scathing report of the Ford Conservatives' tax credit scheme.
In the new report, the FAO finds that the Ford Conservatives have underestimated the cost of the CARE tax credit, saying it will likely cost the Province an average of $460 million a year over the next 5 years. The analysis also finds that the tax scheme provides little benefit to families and is quite inequitable. Key findings include:
- Only 300 families (or 0.1% of recipients) in all of Ontario will receive the full $6000 advertised by the Ford Conservatives.
- 2/3 of the total benefit goes to families with above median incomes
- Only 3% of the benefit goes to lower income families.
- The average annual benefit is $1,600, which is less than many families' monthly child care expenses.
The CARE Tax Credit was the centre-piece of the Ford Conservatives child care policy in last spring's budget. Today's FAO report shows that the CARE Tax Credit is not as advertised. Given that the credit is paid for by cuts to education and child care funding, this seems a tremendous waste of public money that would be better spent investing in a real child care system for Ontario families.
The OCBCC issued a warning last spring about the problems of the CARE Tax Credit. This FAO report confirms our concerns that the credit is a poor way to address families' child care challenges, does nothing to build up the child care sector and does not even meet the objectives laid out by the Ford Conservatives.