Finance Committee on May 18th, 2016

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order.

The meeting is related to the order of reference of Tuesday, May 10, 2016 for Bill C-15, an act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures.

As everyone knows, we're under limited time frames due to votes taking place in the House. There will be a vote at about 4:15 or 4:20, another vote at approximately 5:30, and then one at 6:45.

There are a number of divisions under part 4 of the bill that we haven't heard evidence from officials on as yet.

In the discussion I had with members, we'd like to have Justice come forward. Ms. Raitt and Mr. Caron had questions related to Justice as it relates to this bill. We will start with those questions. If we finish the round, then we could let Justice officials go and we would be back right after the vote.

Without going in any particular order, we'll start with Mr. Liepert who I know has a question for Ms. Raitt.

I might introduce Justice officials first. From the Department of Justice, we have Ms. Lieff and Ms. Hassan.

The floor is yours. I don't know if you have anything to say to start or if you want to go directly to questions.

[Elissa Lieff, Senior General Counsel, Family, Children and Youth Section, Policy Sector, Department of Justice]

I have a statement.

Thank you for inviting us to respond to your questions.

I am here to speak to you about the impact of the new Canada child benefit on the federal child support guidelines.

Bill C-15 proposes to replace the Canada child tax benefit and the universal child care benefit with a new Canada child benefit, which for simplicity, I will refer to as the CCB. The CCB will be a monthly amount paid to help families with the cost of raising children. It will not be considered income for tax purposes. The Department of Justice has been asked to provide information on the impacts, if any, of the CCB on the federal child support guidelines. The current Canada child tax benefit is used for comparison purposes, as from a child support perspective, it's very similar in its application to the new CCB.

Federal, provincial, and territorial governments share responsibility for family law matters. Provincial and territorial governments are responsible for laws that apply to unmarried couples and married couples who separate but do not divorce. The federal government is responsible for marriage and divorce laws. The federal child support guidelines are regulations under the Divorce Act. They consist of a set of rules and tables to apply to determine child support in divorce cases. Provinces and territories have adopted similar guidelines, except the Province of Quebec, which has its own model.

Would the Canada child benefit be considered income under the federal child support guidelines? A key point in understanding the impact on child support is that the CCB would not be considered income for the purpose of the federal guidelines. Under the federal guidelines, the amount of child support paid is determined in part based on a parent's income. The income is used to determine the appropriate basic child support amount under the federal child support tables, which are based on the number of children and the parent's province or territory of residence. The federal guidelines include specific rules to calculate income for child support purposes.

First, you look at the sources of income set out under the heading “total income”, which is line 150 in the T1 general income tax form. Because it will be non-taxable, the CCB will not be included in a person's total income. Second, you adjust the parent's total income in accordance with schedule 3 of the federal child support guidelines. Schedule 3 does not contain adjustments to allow the inclusion in a parent's income used for table purposes of governmental benefits such as the Canada child tax benefit or the new Canada child benefit. This is because these benefits are considered the government's contribution to children and not general income in the hands of parents.

[The Chair, Liberal, Wayne Easter]

Thank you very much. I believe we're going to have to go and vote and come back to questions following the vote because we're down to about eight minutes. It's hardly worthwhile getting into questions.

Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I did have a question, but it's not related to CCB. Do I wait?

[The Chair, Liberal, Wayne Easter]

Yes, officials will have to stay.

We'll go to vote. We'll come back and get right into questions. There are some from the government side as well.

I apologize for that, officials. We figured we might be able to let you off.

The meeting is suspended until after the vote.

[The Chair, Liberal, Wayne Easter]

We'll reconvene.

Mr. Liepert's not here, and he had a question, so we'll start with you, Mr. MacKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

I want to thank everyone for joining us today, as well as Ms. Lieff for her presentation.

My questions have to do with the Canadian child benefit, especially as it pertains to the province of Quebec. This has been said already, but I repeat that, for Quebec taxpayers, the Canada child benefit is not taxable, at the federal or provincial level.

[Elissa Lieff]

That's right.

[Steven MacKinnon, Liberal, Gatineau, QC]

Divorce can result in all kinds of situations when it comes to child custody, which may be given to one parent or shared.

How is the income determined, especially in cases of joint custody, when calculating the Canada child benefit amount a couple or a parent will receive?

[Pierre LeBlanc, Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

Thank you for the question.

When custody is shared, the two parents can divide the benefit. That is now the case with the Canada child tax benefit, and will also be the case with the new Canada child benefit.

I want to specify that the amount is calculated based on each parent's individual net income. If the two parents agree, they can each receive half of the benefit amount. Those are the rules.

[Steven MacKinnon, Liberal, Gatineau, QC]

When one of the divorced parents remarries, the income of the step-parent in the new blended family is not used to calculate the benefit. When the benefit is calculated, it is always based on the income of the mother, the father or both parents.

[Pierre LeBlanc]

Yes. Even if one of the parents remarries, the child is still theirs. Only the parent's income enters into the calculation.

[Steven MacKinnon, Liberal, Gatineau, QC]

So the income of the new spouse is not taken into account when the benefit is calculated.

[Pierre LeBlanc]

That's correct in that case.

[Steven MacKinnon, Liberal, Gatineau, QC]

I have one last question.

When divorced parents cannot agree on how to divide the potential benefit, what would be the method used by the government to decide who will receive the benefit?

[Pierre LeBlanc]

We could confirm that later on.

[Steven MacKinnon, Liberal, Gatineau, QC]

We know there are situations where it is difficult for the parents to agree on a wide range of issues.

[Pierre LeBlanc]

Yes. However, I would like to confirm the information. We will provide you with an answer later.

[Steven MacKinnon, Liberal, Gatineau, QC]

Okay. Thank you for being so clear.

[The Chair, Liberal, Wayne Easter]

Thank you very much, both of you.

I should introduce you, Mr. Leblanc, as the director, personal income tax division, tax policy branch, Department of Finance. You're not on our list, but welcome just the same.

[Pierre LeBlanc]

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Caron, I know you have one related to division 1, with other officials. Do you have anything you want to ask here?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

When I spoke with the officials, I asked them a question, and they told me they could not answer it. I asked that someone from the Department of Justice come answer that question.

Is that someone here?

[The Chair, Liberal, Wayne Easter]

They're there.

Do you want to rephrase your question so we're all clear?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I will, once there is a change.