Gotta be honest. I’ve never had quite the reader reaction to a blog post like I’ve had to last week’s post on daycare fee increases. Out of around 130,000 parents in Quebec with kids in $7/day daycare, around 2% of them read my post during the past week! Craziness. So thanks for reading and thanks to all who shared the post on Facebook, Twitter, LinkedIn or the old-fashioned way through the cordless telephones and such.
Lots of anger and confusion expressed by readers over the way the fee increases are being implemented and the fact that they weren’t told much (if anything) about it. Hopefully, this week’s post will give you all the answers you’re looking for.
Only one problem remains now that almost 3,000 parents are aware of the issue….the fact that 98% of parents still need to be told! And those parents are still going to be caught off guard by a tax bill for anywhere from $200 to $3,300 come April 2016. So I ask ye, oh loyal blog reader, to please continue to share this information with friends, family, neighbours, co-workers, milkmen (do milkmen still exist?) and anyone else for whom you care deeply (sounds like you have a pretty good relationship with your milkman!).
Just to clarify one thing about the fee increases in the $7/day program brought up by one reader: the fee increases are not yet law. However, since the new fees ($7.30/day) and the additional increases (up to $20/day depending on your income) have already come into effect as of January 1st, the passage into law is just a formality at this point. It’s time to plan for this cost…which was the biggest point I took away from all the comments, questions and discussions from the past week. The fees HAVE gone up…there WILL be a big bill to pay in April 2016…now what the HECK do I do about it??!!
Option #1 – Nothing! Just let the tax bill come in April 2016. It’ll suck when you get the bill but at least you’ll know that it’s coming.
Option #2 – A bit more than nothing! Using the basic calculator from last week’s blog post, figure out how much the bill is going to be and put cash aside every month to pay for it next year. If your family income is over ~$156,000 and you have 1 kid in $7 daycare, putting aside $275/month ought to do it.
Option #3 – Even more than a bit more than nothing! There are many different things you can do to tax plan for that daycare bill next April, the easiest of which is to contribute more to your RRSP. But don’t go blindly throwing cash at your RRSP…that may not be the best option for your family. Everyone’s situation is different; for some families, an RRSP contribution would be the way to go, for some it would just be a waste.
Option #4 – For all you employee-type working folk! You also have the option to ask your employer to take extra deductions at source (Quebec tax) off of your pay. One reader told me that the person in charge of payroll at his work said they couldn’t do it. They were kind of a bit wrong…here’s the form! Or, alternatively, le formulaire! Just fill it out, give to your employer, and voila! Future tax problem solved, all behind the curtain of mystery that is Revenu Quebec. The only downside to this solution is that you’re out of pocket a bit more cash throughout the year…but no tax surprises lurking around the corner.
Just do me a personal favour – make sure you speak to your accountant before you make any decision on how to tax plan for next year. And if you don’t have an accountant…well, let’s just say you’re missing out on a whole lot of fun every March or April! (That’s the time of year that accountants have the coolest parties that only people with accountants are invited to.)
Once again, have a nice day (hopefully a nicer day than last week when you read my blog post and became enraged).
The Funny Accountant
If you like what you read, please like my Facebook page and/or follow me on Twitter! And, as always, if you have tax questions, need advice on your personal taxes, corporate taxes or anything else accounting or business related, please contact me (Mitch Kujavsky), AKA The Funny Accountant, either by phone at (514) 833-1158 or by e-mail at email@example.com.
Also, for a witty and insightful read, check out the wifey’s blog. It’s funny and good.
2 thoughts on “The Death of $7/Day Daycare in Quebec: What Do I Do??”
(Yes I am going back and reading some of your older blogs!)
How interesting it is that you have affordable daycare in Quebec. Have you explained this in a previous post? I am from Ontario, and didn’t go back to work after my 3rd child was born due to the cost of having 2 children in fulltime care and one in a before and after school program. There is a subsidy program offered regionally, but the income limit is quite low.
Break even analysis private vs public?