Mr. Speaker, I am pleased to rise in the House today to speak on Bill C-256 presented by the hon. member for Mississauga South.
This bill would allow one spouse to split their earned income with a spouse who is working in the home and caring for a dependent child who is not yet enrolled in full time school.
This bill responds to the growing demands of Canadians that recognition be given to those who care for their children at home.
I am pleased to speak to this bill as an MP who has chosen to be recognized as a homemaker in my previous occupation. I have not felt isolated or deprived in that role. I am pleased to speak to this bill during national family week and in this, the International Year of the Family.
The initiatives presented in this bill would meet three important criteria. It provides parents with the option of keeping one parent at home during the early formative years of a child's life with a tax benefit recognizing the contribution as being significant. Income splitting is an important first step forward in recognizing the financial needs of families with young children. It would allow the spouse at home to be eligible for certain pension benefits such as RRSPs.
The most important objective of this bill is that it would reintroduce choice in the realm of child care so parents can have the freedom to make decisions that are in their best interest and in the best interest of their child.
Currently the system favours those who use day care by the tax incentives provided to the spouse earning the lower income. Consequently those who have one spouse stay at home do not have the equivalent tax deductions for providing the service themselves. Coincidentally, with the high taxes they pay single income families with one spouse at home are technically subsidizing those who have two incomes and use day care along with the tax deductions.
The Reform Party considers the family to be the fundamental social and economic building block of Canadian society. We also believe that parents are the number one choice when it comes to providing the best possible care for their children. This view is also supported by the majority of Canadians.
An Angus Reid poll published in Maclean's magazine in June of this year stated that according to all respondents 68 per cent agree that the best type of family in which to raise children has two heterosexual parents with one at work and one at home.
Unfortunately, the majority of Canadians cannot realize this desired ideal because of the limited choice in the area of taxation given to those who stay at home.
As a matter of fact, there is an unfair bias within the current federal tax system against two parent single income families in Canada. Currently, the lower income earner in a dual income family can claim under the child care expense deduction a maximum tax deduction of $5,000 for a child under seven years of age, while $3,000 per child is permitted as a deductible expense for children aged seven to fourteen.
Reform supports many Canadian parents' belief that by allowing a child care taxable benefit to working parents the federal government in essence is advocating dual income families in Canada and in so doing creating an unfair financial situation for stay at home parents.
This government has further aggravated this situation by advocating a commitment to increase the number of day care spaces every time the economy grows by 3 per cent or more. This is a commitment it will have to honour despite the fact that it will only further increase the inequities toward those who
elect to have one parent stay at home to provide personal care for their child.
No move has been made by this government to address this serious inequality which currently exists. Therefore, the bill introduced by my hon. colleague is a very positive step in the right direction.
Until such a time as a system of flat tax can be implemented the Reform Party supports the concept of income splitting between legally married couples. No other measure of tax relief would affect the family so greatly under our current system as the ability to split income and lower the resultant tax burden. The tax savings would be particularly meaningful when one spouse is working as a full time care giver to their children.
Regardless of the employment situation of the husband and wife, the marriage union will be recognized in tax law as an equal economic partnership. Should the flat rate income tax proposal presently being considered by the Reform Party be implemented, income splitting would become largely irrelevant because individually or collectively a couple would pay the same tax.
It is also important to counter some of the criticism launched against reformers by those who claim that supporting such policies is simply a means of trying to turn back the clock and keep women at home. Quite the contrary. We are simply responding to the desires of a large number of Canadian families that would like to stay at home to care for their children if they so chose without being unfairly disadvantaged financially by federal tax laws.
We believe that if implemented correctly, measures such as income splitting will allow those parents who are forced to work because of finances the option to stay at home and care for their children.
In a recent survey conducted by Angus Reid 57 per cent of respondents thought it would be good news if the government would provide some type of financial assistance to help one parent in a two parent family stay home to care for their children.
Income splitting would have several strong advantages to those involved and some spinoff benefits for others. First, it would help alleviate the excess tax burden experienced by those single income families with one spouse at home to care for their children. Even with a maximum of $25,000 of split income it would allow the spouse at home to receive proper benefit in terms of income and participate in simple pension benefits such as RRSPs. The tax burden on the family would be lessened, allowing for more disposable income to be spent on the very real needs of raising a family today.
Second, it would also have spinoff benefits in the area of employment and day care space availability. There is a very real need among single parents for both day care spaces and potential employment. If the spouse of a two income family leaves their job to care for their child at home this opens up a job for someone else and also creates a day care space. A single parent who wants to get off any sort of social assistance needs both of these possibilities to do so. These are very real needs for the single parent and simply creating day care spaces is only half the solution. Income splitting could provide for all components necessary in the equation.
The bill does have one apparent weakness in that it limits the deduction to those with preschool children at home. I would advocate that the bill be considered for amendment in that the eligibility criteria be extended to include those spouses who stay home to manage the affairs of the home with children who are in school. This is also an important area of parental care.
As critic of family issues I have heard from numerous Canadians across Canada regarding the issue of recognition of those who stay at home to provide care for their own children. It is also an issue in my own riding.
Let me read from two letters I received from two of my constituents. Mrs. Andrea Jones in Coquitlam wrote to me after I was first elected, sharing her concerns on the present status of the Canadian family.
She is a stay at home mother with a toddler to care for. Her husband is employed but they are finding it very tough to make ends meet. Andrea asked for equality to be implemented within the present tax system that does not discriminate against single income families. I quote from her letter:
I understand the terrible financial mess this country is in, but I strongly feel that the subsidies enjoyed by two-income families discredits the hard work homemakers do in support of their children, husbands and community.
Andrea Jones and her husband are not asking for special treatment, just fair and equal treatment.
Sandra Boleak from Port Coquitlam also wrote to me this past spring about the need for the government to recognize the important work of those who stay at home in support of the family.
Sandra and Len have four children at home under the age of six. Sandra left her full time, good paying job in 1989 to look after her family. Since then, it has been difficult financially and the sacrifice they are making to keep one parent at home is real. She states in her letter:
When will stay at home parents' jobs be recognized and respected? Why can my husband not write me off as a caregiver as well as claim the spousal amount?
The dilemma facing parents who have exercised this choice is that they are disadvantaged taxwise for doing so. They have
chosen the preferred child raising option of Canadians and yet pay higher taxes on their earnings because of it.
There is a real need to entrench within government policy and give full recognition to the importance of family in our society. The issue of child poverty is rooted not in the issue of women's rights or even of children's rights but in the issue of the strength of families.
Government policies can actually detract from the importance of family role. It is refreshing to see a slight reversal of this trend from the government side. Perhaps this will send a loud message with a purpose to give the family back its prominence and priority within our society, and give them back the freedom to choose.