Thank you, Mr. Chair, for the opportunity to take part in the 2014 pre-budget consultation process.
My name is Andrea Mrozek. I'm the executive director of the Institute of Marriage and Family Canada. In 2016 we will celebrate 10 years of creating, compiling, and respectfully presenting research, with an eye to helping families flourish so that Canada will likewise flourish.
Sadly, Canadian families are struggling today. Canadians have about a 40% chance of divorce before their 30th wedding anniversary. We see increasing rates of single-parent families who are more likely to be poor. We see increasing rates of common-law families, which are unions that are more likely to break up. We see a decreasing marriage rate and a birth rate that is below replacement, so we have reason for concern. Behind those family statistics of course is a great deal of emotional pain for people. We examine this research with an eye to diminishing suffering. Tax reform is one way to help families. Our research leads us to recommend the following.
Firstly, eradicate an existing inequality by introducing family taxation, also known as income splitting. Income splitting establishes horizontal equity or tax fairness among families. It ensures that families who look the same and make the same amount of money are also taxed the same, regardless of how they earn that money. Families balance budgets not as individuals but together. Sharing is a good thing and is a hallmark of strong families. It is to be encouraged by tax policy
A healthy majority of Canadians, from every political party, recognize the current unfairness. For instance, 65% of Conservative supporters, 55% of New Democrat supporters, and 54% of Liberal supporters all agree that income splitting makes sense. It is sanctioned by the pre-eminent Canadian economist, Dr. Jack Mintz, and it has been enacted without controversy in an array of countries like the Czech Republic, Germany, and France.
Certainly, the main reason to establish income splitting is for tax fairness. Still, almost half of all Canadian families with children under 18 right now would receive a tax cut. For example, if it were implemented only federally, a secondary school teacher in Manitoba would save 28% on his or her tax bill. For a further example, an accountant in Saskatchewan would save 25% with income splitting. I believe we cannot look down upon those savings for average, middle-income Canadians, which would only increase if income splitting were offered provincially.
Secondly, we recommend increasing the money parents receive directly, whether through the UCCB, the CCTB, or another vehicle. While we would prefer that the tax code be used to leave money in the hands of parents in the first place, a second consideration would be to increase the universal child care benefit, increase the child care tax benefit, or take other measures. We believe that money in a parent's pocket or in a family's pocket is what allows them to make the best choices according to their family's diverse and specific needs.
Finally, we do recommend against the use of tax dollars to create a national day care program. And it is with regret that I realize this comes about two weeks too late for the honourable members of the New Democratic Party. State-funded day care, we believe, is extraordinarily expensive to do well. The costs go only one way—up—as we have seen in Quebec. Neither does state-funded day care account for different family situations across the country. It doesn't help people who do shifts. Some families go to extraordinary lengths to tag-team care between parents. If national day care begins, those families may find other benefits cancelled to pay for the one program that they do not choose to use.
Importantly, across partly lines, across gender, and across income levels, 76% of Canadians believe that the best place for a child under six is at home with a parent.
It is our concern that national day care might become a national boondoggle as the federal government struggles to provide that which we believe ought to be the purview of sources closer to home.
We have a number of resources available on income splitting and day care, and I would be very happy to take questions afterwards.
Thank you very much.