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Canadian Parents Could Get an Extra $300 for Their Child

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Lockdowns and stay-at-home directives are tough for parents. The majority of provinces have suspended classes for the rest of 2020 except in two. Thus, children will be at home with their parents for months.

Elementary schools in Quebec, but outside Montreal, reopened last May 11, 2020. British Columbia will open schools in all grades beginning June 1, 2020, but on a voluntary and part-time basis.

The scheme of things has changed since the emergency health crisis began. Parents need to care for their children while trying to get work done at home. Apart from childcare responsibilities, parents will also deal with financial stress. The decision of the federal government to give the Canada Child Benefit (CCB) a boost is timely.

One-time top-up

More than two months ago, Canada unveiled funding for families and small businesses. The economic support package for parents is almost $2 billion. Before the coronavirus outbreak, the basic CCB monthly amount is $553.25 for children under six years old and $466.83 for children aged six to 17.

If you have an eligible child or kids in your care in May 2020, you’ll receive an extra $300 per child. The one-time increase in CCB aims to lessen parents’ financial burden while looking after their children during the pandemic.

You will still receive the extra CCB if you don’t file your tax return for the 2019 income year. However, to continue getting the benefits and credits for 2020-2021, parents should file their 2019 tax return. Both the basic CCB and top-up are tax-free. You don’t have to claim it on your income taxes for 2020.

Crisis-proof investment option

Parents who are not financially handicapped can invest the extra CCB rather than keep the money idle. You can own Algonquin (TSX:AQN)(NYSE:AQN) for less than $20 per share. This $9.77 billion power and utility company is a crisis-proof. With its dividend offer of 4.61%, your $20,000 investment can generate $922 in passive income.

Algonquin owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. Its utility footprint is in Canada and the U.S. Unlike other companies withdrawing guidance in 2020, Algonquin is upbeat.

Market analysts covering the stock are projecting the top and bottom line growth to be 8.65% and 4.76%, respectively. Over the next three to five years, earnings growth should hover around 8.6%. Also, the company plans to spend $9.2 billion in capital investment within the same time frame.

Despite the COVID-19 pandemic, the board of directors approved a 10% increase in dividends for the second quarter of 2020. The move indicates the confidence of the board members on the business model of Algonquin. Forward-looking investors can expect stable and growing financial results in the years ahead.

Multi-purpose

The stress levels of Canadian parents are high these days. It’s not a walk in the park when you combine childcare with household chores and working from home.

You shouldn’t miss out on the CCB if you have eligible kids. The top-up can ease your financial strain or be your seed money for investment.

Speaking of parents...

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

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