OAP Day 161 — Federal Parties All Asleep on the Taxation of “Childhood Budgets” issue.
When it comes to the federal election, the Ontario Autism Program is a ticking time bomb… for the Federal Liberals and Justin Trudeau.
Since the roll-out on the new OAP on February 6, parents have been wondering “am I going to have to pay tax on my child’s ‘Childhood Budget’? If I receive a cheque for $5,000 from the province, will this be treated as taxable income, and will I need to have $2,000 set aside for April, to cover both federal and provincial income taxes?”
This is clearly a question for the CRA. (Some parents have been trying to get this information from the Ministry of Community and Social Services. Bad idea to get tax advice from a non-tax Ministry). My view has always been that it shouldn’t be — the new program isn’t different enough from the DFO or the B.C. program, which are untaxed, for this program to be taxed. But when I bring this issue up with very smart tax economists and tax lawyers, their response has always been “ooooh, that’s a complicated one”.
Parents would sleep a whole lot better at night with an answer (particularly if that answer was “no, it’s not considered taxable income”). But we’re not getting any answers from the federal Liberals, and the federal opposition parties aren’t asking the question.
This is a problem for families, but it’s also a huge problem for the Liberals. If they don’t get this sorted out, and fast, here’s what is going to happen: Some parent is going to call the CRA, get the response “of course it’s taxable income” from an agent that doesn’t know any better, go to the media and Justin Trudeau’s going to have to go off-script for a couple days, to explain to the media “no, we’re not going to tax kids with autism”. Better to get this issue resolved now.
And about those opposition parties? I can understand why the Conservatives don’t want to touch it. I have no idea what the NDP is doing. And that brings us to the federal Greens. Here’s a thread from Kevin Milligan, an economist at UBC Vancouver School of Economics, and all around great fellow, on how the Greens basic income policy mirrors Doug Ford’s OAP:
The Green response to this has been roughly, “of course we’re not going to eliminate SSAH/OAP, etc. etc.” But it’s left to the reader to figure out, what, exactly, they have in mind.
Federal politics is a depressing place right now.
