Finances of the Nation: Is the CWB Enhancement Achieving Its Dual Objective of Supporting Income and Incentivizing Work? The Effects for Couples in Ontario and Quebec

Luc Godbout () and Suzie St-Cerny
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Luc Godbout: Université de Sherbrooke
Suzie St-Cerny: Université de Sherbrooke

Canadian Tax Journal, 2023, vol. 71, issue 2, 523-541

Abstract: In this article, Luc Godbout and Suzie St-Cerny focus on the effects of enhancing the Canada workers benefit (CWB) in 2021. More specifically, they seek to determine whether, for couples in Ontario and Quebec, the enhancement served to render work more rewarding (by lowering effective marginal tax rates) and to provide better income support for low-income workers (by increasing disposable income). The authors show that, while the objective of income support was achieved, the results for the objective of work incentivization were mixed, depending largely on a couple's family income level and working income split. The authors suggest how the CWB might be reformed to better fulfill its role in incentivizing work.

Keywords: Canada workers benefit; effective marginal tax rate; lower-income workers; effective income tax rate; work; incentives (search for similar items in EconPapers)
Date: 2023
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DOI: 10.32721/ctj.2023.71.2.fon

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