Painful Truth: The typical tale of Henry and Cathy

I wish I belonged to a typical family. Not an average family, mind you: a “typical family,” as defined by the Conservative Party in its recent federal budget.

On page five of the 528-page budget document, we meet Henry and Cathy and their two adorable kids, Grace and Elizabeth. Pictures of this charming family and/or group of stock photo models are all over the government budget website.

Whether real or fully artificial, Henry and Cathy are, we’re told, getting a full $6,600 in tax relief and increased benefits this year, thanks to the budget!

Wow! That’s pretty good! I could do a lot with $6,600, and since I already know I make more than the median income in Canada, I should save even more than that, right?

Not so fast!

Flip to page six and we see that our typical family has a total income of $120,000 a year. Henry earns $84,000 and Cathy brings home $36,000.

That’s almost double the median family income in Canada.

In 2012, according to Statistics Canada, median family income of all family types was $74,540. Two-parent families brought home $81,980, and single parents $39,350. Given that we’ve seen limited economic growth and even more limited wage growth since the end of the recession, I’m guessing those numbers are up just a little bit for 2014/15.

So why are Cathy and Henry rolling in cash? Well, if they didn’t make quite so much, and if they didn’t make it in exactly the right way, their tax savings wouldn’t be so impressive!

First, the more money you make and spend, the more you save in taxes. For example, more than $1,000 of that $6,600 in savings come from the reduction in the GST from seven to five per cent.

Wait, we’re still counting that? Kudos and all for cutting the GST, but that was back in 2008!

What else do Cathy and Henry get?

Well, there’s a $3,293 cut in income taxes, of which $1,865 comes from the 2014 Family Package, plus $2,329 in “enhanced benefits,” which includes money for kids under six. 

It seems like most of what Cathy and Henry are saving this year they saved last year, too.

That may be fine for an election campaign – you run on your whole record, not on what you did just in the past year – but for a financial document, it feels like fudging.

The most disturbing thing about Henry and Cathy isn’t that their income and family structure was clearly manufactured to make the government’s targeted tax cuts look good.

The alarming thing is that our leaders thought they could slap the label “typical” on a relatively wealthy family.

Folks making $120,000 a year are doing quite well for themselves in Canada. They’re comfortably above average. They have more financial security than the vast majority of Canadians will ever know. Yet I suspect if you took a survey around Parliament, Cathy and Henry do look typical to the folks who wind up elected in this country. 

Henry and Cathy are a mirror of the people in power: well educated and at least reasonably affluent, able to put money in an RRSP or TFSA every year, able to buy a new car instead of used, able to buy a house instead of renting.

There are real people like that, but they have never been the majority. For most, that life is an aspiration, and it’s one many will never reach. The only thing typical about Henry and Cathy is how out of touch they are with reality.

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