Deficit Spending on Kids? Fix the Budget Before Baby Bills!

Canada’s Child Care Benefit (CCB), a flagship program under the Child Care Act, dishes out roughly $8,000 per child under six annually, rising steadily with inflation to around $9,000 by 2030. It’s an enticing cheque for families, but here’s the catch: the government funds much of this through deficit spending, borrowing tens of billions annually, pushing federal debt to eye-watering levels. And guess who’s on the hook to pay it back? Today’s kids, once grown and working taxpayers.

The debt per child in Canada is soaring, currently estimated at about $175,000, set to hit $200,000 by 2030. This isn’t play money. It means hefty tax bills (or slashed government programs) loom down the road for the very families that receive these benefits now.

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For economists, marketers, investors, and consumers alike, deficit spending is a form of hidden taxation—the government borrows today and shifts costs to tomorrow. Think of it like buying a Tesla on a credit card and making Junior pay the interest when he starts his first job.

Canada’s federal debt is around $1.2 trillion and climbing, and while the government aims to keep deficits under 1% of GDP by 2026, interest payments alone are projected to balloon to $70 billion annually by 2030. That’s more than Canada’s entire GST revenue and nearly 90% of corporate tax income—money that future taxpayers must shell out before any other spending. The “Canada Child Benefit” looks generous until you realize debt servicing is gobbling up twice what’s spent on child benefits annually.

For business leaders and investors, rising government debt means higher borrowing costs for everyone. The federal government competes with you in bond markets; the more they borrow, the higher the interest rates climb.

Even seemingly innocent social programs like child benefits carry a hidden cost—funded by borrowed money, they inflate federal debt and future tax burdens. No matter how much Ottawa spends on childcare today, if it doesn’t get serious about balancing its books and paying down debt, all this government generosity risks turning into a fiscal hangover for Canadian families and markets alike.

Consumers: Enjoy the child benefits now, but mentally prepare for higher taxes or fewer government services later. Inflation indexing is a band-aid on a deeper fiscal wound.

Economists: Deficit spending on social programs is a gamble on future economic growth. If growth stalls, today’s policy generosity becomes tomorrow’s economic drag.

Marketers and Investors: Rising government debt influences everything—from interest rates and consumer spending to business confidence. Fiscal policy trends matter to your portfolio and market strategies.

Canada’s Childcare Act funding by borrowing is essentially getting kids to pay for themselves before they’ve even learned to tie their shoes. Without serious efforts to curb deficits and reduce debt, the billboards promising “help for families” will read like future tax notices.

Before fretting over baby strollers, policymakers need to drive a hard bargain on the federal budget. Otherwise, those same kids will grow up giving the government the ultimate ride—right into their wallets.

Q1: What is the Canada Child Benefit (CCB)?
A: The CCB is a tax-free monthly payment to help families with childcare costs, paying up to $7,997 per child under 6 and $6,748 per child aged 6-17 in 2025, indexed to inflation annually.

Q2: How is the CCB funded?
A: Primarily through federal government revenues, which currently include substantial deficit spending funded by borrowing. This increases national debt that future taxpayers must repay.

Q3: How much federal debt per child exists today?
A: About $175,000 per child, projected to rise to roughly $200,000 by 2030 given current fiscal trends.

Q4: Why is deficit spending a problem?
A: It shifts the current consumption burden to future taxpayers, who then face higher taxes or fewer services to pay down interest and principal on the debt.

Q5: What can be done to address this?
A: Balancing the government budget, reducing future deficits, and controlling debt growth are essential steps to ease the tax burden on upcoming generations.