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Canada Conservatives hand out child benefit cheques as campaign ramps up

Initially sold as a bonus to Canadians for balancing the federal budget, the Conservative Party is now touting the benefit cheques as tonic for a suddenly sputtering economy and as a job-creation plan The government is now touting their recently enhanced universal child-care benefit as tonic for a faltering economy and as a job-creation plan.

Chris Wattie/REUTERS

The federal election campaign isn't expected to officially start until September, but Monday's delivery of $3-billion in government cheques to millions of parents may be the real kickoff.

Conservative cabinet ministers and MPs are fanning out across the country – at scripted events from Tignish, PEI, to Vancouver – to tout the government's recently enhanced universal child-care benefit.

"The unofficial campaign is on," said pollster Nik Nanos. "This is one of the manifestations of a fixed election date. There is no summer break and no stoppage in campaigning."

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The aggressive selling by the government of the cash windfall has sparked a debate over whether giving families cash is the best way to create jobs and stimulate an economy that may now be in the grips of a mild recession. The Bank of Canada acknowledged last week that Canada's economy will likely shrink in the first half of this year – meeting the traditional litmus test of a recession – and grow just 1.1 per cent for the year as a whole.

The benefit cheques are larger than usual due to changes the Conservatives unveiled last fall – $160 a month for children under 6, up from $100, and a new payment of $60 a month for seven- to 17-year-olds, regardless of family income. The cheques, going to roughly 3.8 million families, include the regular monthly amount for July plus catch-up payments for the first six months.

"If someone was cynical, you would see this is a piece of direct mail from the Conservative Party to voters," Mr. Nanos added.

Initially sold as a bonus to Canadians for balancing the federal budget, the government is now touting the benefit cheques as tonic for a suddenly sputtering economy and as a job-creation plan.

Employment Minister Pierre Poilievre, who will be in Halifax Monday as part of the sales effort, said last week the cheques come at "a perfect time" to boost the economy and "create jobs across the country."

Bank of Canada Governor Stephen Poloz has acknowledged that the child-care cheques would add a "noticeable bump" to consumer spending in the July-to-September quarter.

Governments generally get a much bigger stimulus bang for their buck when they spend directly on projects, such as roads and bridges, rather than giving cheques or tax breaks to individuals, who may choose to bank the money instead of spending it.

Whatever their economic merit, the cheques are clearly good politics, argued Ian Lee, an assistant professor of public Policy at Carleton University's Sprott School of Business.

"The beauty of a family allowance cheque is that it's sent to that person every month from the government of the day," he said. "Politicians want to get credit for it. They want the visibility."

The child-care benefit also raises questions about the relative merits of universal payments versus more narrowly targeting help to those most in need.

Mr. Nanos said the Conservatives will exploit the payments once when the cheques are delivered, and then repeatedly throughout the rest of the campaign as a hammer against the opposition.

"The second volley will be to claim that Canadian will lose the benefit unless they re-elect Stephen Harper," he said.

The Liberals, under Leader Justin Trudeau, have said they would fold the child-care benefit into a more targeted Canada child benefit – an income-based program for people with kids. The Liberals also want to cut taxes for low- and middle-income families, making a strategic distinction with the Conservatives, whose main tax breaks are available to all Canadians.

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The NDP said it would keep the enhanced child-care benefit and supplement it with a $15-a-day child-care subsidy.

Mr. Nanos said the Conservatives may try to sell the payments as a jobs plan, but it's not clear Canadians will see it that way. He said polling data show that voters rate the Conservatives high on fiscal management, but lower on job creation.

"The Conservatives don't have an advantage on job creation," he explained. "This is their Achilles heel."

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