The provincial Childcare Access and Relief from Expenses (CARE) credit helps parents with their child care fees. The CARE credit should be enhanced by increasing the credit’s clawback threshold, indexing it to inflation, and removing two-thirds of the lower-income limit.

• Only one-third of children under the age of 6 use the kind of care covered by the federal-provincial $10-a-day child care agreement. Given that most families will not benefit from that program, the CARE credit remains an important support for families. Unlike the federal-provincial child care deal, the CARE credit applies to a wide range of child care options for children aged 0 to 17.
• Why it matters: The current credit does not go far enough to help the low- and middle-income families who need it most.
• Details: The CARE credit is clawed back at a household income of $20,000 annually. This threshold isn’t currently indexed to inflation. Since the purchasing power of $20,000 isn’t what it used to be, the clawback threshold should be increased and tied to inflation. The credit is also limited to two-thirds of the income of the lower-earning parent. As this tends to disproportionately impact lower-income families, the limit for this credit should be removed.

For more details read Cardus’s Policy Brief: Enhancing Ontario’s Child Care Tax Credit.