A new report from Canada’s parliamentary budget officer says a surge in inflation several years ago was the main driver behind a significant increase in the cost of delivering the Canada Child Benefit in the years following the pandemic.
The Office of the Parliamentary Budget Officer, led by Annette Ryan, said in a report released Thursday that the cost of delivering the benefit rose $4.2 billion between the 2022-23 and 2024-25 benefit years, an increase of more than 16 per cent. That brought the total cost of the program to $29.2 billion in 2024-25. The report noted this increase outpaced the cost growth seen during the COVID-19 pandemic itself, when the benefit received temporary top-ups to help families manage economic uncertainty.
Over the same two-year span, the average annual payment per family rose to $7,700, up from $6,700. Because the Canada Child Benefit is indexed annually to inflation, like most federal support programs, its cost climbed alongside consumer prices. Statistics Canada has reported that inflation reached a nearly 40-year high of 8.1 per cent in June 2022. The PBO attributed more than two-thirds of the two-year cost increase to this inflation catch-up.
Income Levels Behind the Increase
The Canada Child Benefit is income-tested and designed to target low- and medium-income families with children, meaning costs can also rise as household incomes fail to keep pace with the cost of living. The PBO estimated that about a quarter of the recent increase in benefit costs stemmed from eligible households’ incomes not keeping up with inflation.
The report also found that households earning $50,000 or more annually made up 70 per cent of Canada Child Benefit recipients in 2024-25, collectively receiving $14.7 billion that year. By comparison, households earning less than $50,000 accounted for 40 per cent of the increase in payments recorded between 2022-23 and 2024-25.
Immigration and Family Size Factors
A smaller share of the cost increase was linked to the rapid pace of immigration during the period. As more families with children under 18 arrived in Canada, more households became eligible for the benefit. Temporary residents can qualify for the Canada Child Benefit after living in the country for 18 months.
Between June 2023 and June 2025, the number of non-permanent residents receiving the benefit nearly doubled, though this group still represented only four per cent of total recipients. The PBO estimated that the total number of families receiving the benefit rose to 3.8 million in 2024-25, up from 3.7 million two years earlier.
The report also noted that the average number of children per recipient family declined slightly over the period. Since benefit payouts scale with the number of children in a household, this shift toward smaller families had a moderating effect on total costs. The PBO calculated that if family sizes had remained unchanged from 2022-23, the total cost of the benefit in 2024-25 would have been $300 million higher.
Looking Ahead
The federal government has since taken steps to slow the pace of immigration, and the PBO projects that the number of Canada Child Benefit recipients peaked in the 2025-26 benefit year. The office expects the total cost of the program to have grown 4.5 per cent to $30.5 billion in 2025-26.
Looking further ahead, the PBO projects that with both inflation and demographic growth cooling, the pace of cost increases will slow considerably to 2.5 per cent in 2026-27 and continue declining in subsequent years. By 2030-31, the budget office forecasts total program costs will reach $33 billion.
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