PBO Report: Canada Child Benefit Costs Surge to $29.2 Billion Driven by Inflation Catch-Up
A new report from the Parliamentary Budget Officer reveals that the cost of the Canada Child Benefit rose by $4.2 billion between 2022-23 and 2024-25, reaching $29.2 billion. The increase was primarily due to inflation adjustments and stagnant household incomes rather than immigration trends.
The cost of delivering the Canada Child Benefit (CCB) has increased significantly in recent years, according to a report by the Parliamentary Budget Officer (PBO). Between the 2022-23 and 2024-25 benefit years, the total payout for the program rose by $4.2 billion, reaching $29.2 billion in 2024-25. This represents a 16 per cent increase in costs over the two-year period.
The PBO attributes this surge primarily to post-pandemic inflation catch-up and households' incomes failing to keep pace with rising prices, rather than solely to immigration trends. More than two-thirds of the cost increase is attributed to catch-up adjustments for inflation, while approximately one-quarter is tied to eligible households' incomes lagging behind inflation. Notably, the increase in CCB costs over these two years exceeded the higher costs observed during temporary boosts provided during the COVID-19 pandemic.
During this period, the average annual CCB payment rose from $6,700 to $7,700. The number of families receiving the child benefit also increased, rising to 3.8 million in 2024-25 from 3.7 million two years earlier. However, demographic factors had a complex impact on costs; the PBO estimates that if household sizes had remained constant since 2022-23, the cost of the benefit in 2024-25 would have been $300 million higher.
Regarding recipient demographics, households earning $50,000 or more annually accounted for 70 per cent of CCB recipients in 2024-25 and received a total payout of $14.7 billion. Conversely, households making less than $50,000 per year accounted for 40 per cent of the increased payments between 2022-23 and 2024-25.
While immigration contributed modestly to cost increases, the data shows that between June 2023 and June 2025, the number of non-permanent residents receiving the Canada Child Benefit nearly doubled. Despite this growth, non-permanent residents still accounted for only four per cent of total CCB recipients. Temporary residents are generally required to have lived in Canada for 18 months to be eligible for the benefit.
Looking ahead, the PBO projects that CCB costs will peak in 2025-26 at $30.5 billion, representing a 4.5 per cent increase. Growth in the cost of children's benefits is expected to moderate to 2.5 per cent in the 2026-27 benefit year as inflation cools and demographic pressures shift. By 2030-31, the total cost of delivering the benefits is projected to rise to $33 billion.