The Canada Child Benefit (CCB) is a lifeline for many families. This extra cash helps cover essentials like food, clothing, and school supplies. Thus, the benefit makes it easier for parents to manage the cost of raising children. For low- to middle-income families, it can make a big difference in their financial stability, allowing them to invest in their kids’ future without stressing over the next bill. And Canadian parents should continue to see a major upgrade.
The upgrade
The federal government recently announced an increase to the CCB to help families keep up with the rising costs brought on by inflation. With the cost of living going up, especially for basics like food and housing, this bump in the CCB is meant to give parents a little extra relief. For 2024, families with kids under six could receive up to $7,786 annually, and those with children aged 6 to 17 could see up to $6,570 per year. This increase ensures that families don’t have to stretch their budgets quite as thin to provide for their children.
This decision to raise the CCB is a direct response to inflation pressures that have hit Canadian households over the past year. By boosting the CCB, the government hopes to ease some financial stress, allowing parents to focus more on their kids rather than on juggling bills. Whether it’s covering daycare costs, buying back-to-school gear, or just helping with everyday expenses, this increase aims to make life a bit easier for families across the country. And it should only keep rising.
More to come
Over the past few years, the CCB has consistently increased to keep pace with inflation, ensuring families receive more support as living costs rise. Since its introduction in 2016, the CCB has seen annual adjustments based on inflation rates. For instance, in 2020, the maximum payment was $6,639 for children under six, and it has now grown to $7,786 in 2024. This steady increase reflects the government’s commitment to supporting families, especially as inflation has picked up in recent years. The compound annual growth rate (CAGR) for the CCB has been around 3% over the last few years, thus highlighting how these incremental adjustments add up over time.
Looking ahead, it’s likely that the CCB will continue to rise in line with inflation, as it’s tied to the Consumer Price Index (CPI). This ensures that the benefit remains relevant and provides meaningful support to families in the face of ongoing economic challenges. With inflationary pressures expected to persist, the government will likely keep adjusting the CCB to ensure it helps parents cover the growing costs of raising kids.
Set your kids up for life
Investing even a portion of your CCB into a Tax-Free Savings Account (TFSA) could be a game-changer for your kids’ future. By setting aside some of that CCB each month, you can grow that money tax-free, thereby letting it accumulate and compound over the years. Imagine putting even a small amount into a diversified exchange-traded fund (ETF) like the Vanguard FTSE Global All Cap ex Canada Index ETF (TSX:VXC). With its current price of $61.07 and a year-to-date return of 20%, it’s a great way to gain global exposure while benefiting from the power of compound growth.
VXC holds a diverse range of assets across industries like technology and healthcare, making it a strong long-term investment option. Its low expense ratio and yield of 1.5% mean you’re not losing much to fees, and your investment has the potential to grow alongside global markets. Given its five-year beta of 0.99, it tracks close to the broader market with slightly less volatility. By investing in VXC, you’re setting your kids up with a financial headstart that could pay off big time when they need it the most.
