The 1997 Canada Child Tax Benefit: A Test of Béland, Rocco and Waddan

• In Event: Poster Sessions: Canadian Politics, Experimental Research, and International History and Politics
  In Poster Session: Poster Session: Canadian Politics

Abstract

The proposed paper will seek to explain variation by Canada's ten provinces in the implementation of policies associated with the Canada Child Tax Benefit (1997) by using the theoretical framework Béland, Rocco and Waddan developed to explain state variation in implementing policies associated with the US Affordable Care Act. In so doing the paper will provide a test of the generalizability of their framework.

In the 2016 book "Obamacare Wars: Federalism State Politics and the Affordable Care Act," Béland, Rocco and Waddan study the implementation of so called “Obamacare” at the state level. The Affordable Care Act introduced not one but several reforms to health policies, most importantly, the creation of state-based market-places for individuals to perchance health insurance with federal subsidies, a federally subsidized expansion of state Medicaid programs for low income families, and regulatory changes to require insurers to spend a minimum share of premiums on providing health care to members or face penalties. All of these required state-level action to implement, making the Affordable Care Act not just a complex policy but one with shared authority between Washington and the fifty states. Béland, Rocco and Waddan argue that the degree to which any one of these three policies was implemented in a given state can best be explained not by the ideology or partisanship of the state executive or legislatures but by the policy legacies, institutional fragmentation and public sentiment, impacting each of the policies in each state.

The paper proposed here asks whether this theoretical framework can provide a more general approach to the study of policy implementation of complex shared authority programs within federations? The test case chosen here is the introduction of the Canada Child Tax Benefit and associated reforms to provincial social assistance and programs to help low income families. In the 1997-98 federal budget, the Canadian government introduced a new set of tax benefit for low income families, dubbed the Canada Child Tax Benefit. The program consisted of two parts, a Basic Benefit (paid completely by the federal government) and the National Child Benefit Supplement, which was to be combined with provincial tax grants to create a new National Child Benefit. Importantly, unlike previous such programs, these federal tax credits could be taken account of when calculating eligibility for provincial social assistance. However, provinces were also supposed to “re-invest” any savings they achieved in providing social assistance into programs to help low income families. When combined with a very gradual tapper out as income rose, the program was calculated to remove many families from provincial social assistance and also provide a meaningful benefit to the working poor, who would also benefit from their province’s re-investment in services for low income families. As with the US Afford Care Act a decade later, all this assumed Canadian provinces would implement the scheme as envisioned. The Canadian government had no legal ability to control the design of the provincial programs meant to compliment its actions.

Can Béland, Rocco and Waddan’s theory explain the variation between provinces in implementing the Canada Child Tax Benefit plan? Specifically, the proposed paper will look at the decisions made by the ten provinces in terms of: creating tax grants for families with children (the provincial share of the National Child Benefit) both in terms of the dollar value and tapper-out rates adopted by the ten provinces, the degree to which social assistance savings were re-invested in programs to help low income families, and whether this re-investment went to fund existing programs, expand them or create new programs.

Author

• Daniel Cohn, York University