Mr. Speaker, I rise today to speak on Bill C-241, an act to amend the Income Tax Act with respect to child support payments.
I wish to commend the member for Nepean for her persistence and her efforts in support of this bill we are debating today. The issue of child support payments and taxation has been festering for many years without an adequate response from either this government or its predecessor.
One parent families are a result of a breakdown in marriage in a family. To put this into perspective, in 1991 300,000 Canadian parents received child support. The total bill was some $1.65 billion. It involved some 35,000 children in support and custody cases. Further, statistics indicate that 95 per cent of the custodial and single parents are mothers.
The Reform Party has recognized the need to fundamentally address this issue. Our family task force, which I chair, carefully considered and developed our position on child support payments and taxation in addition to addressing some other related issues.
Our motivation for developing a position on this issue is the function of our concern about the family and recognizing the need for strengthening it for this generation and future generations of Canadians. We believe the family is the fundamental building block of our society. The family is the fundamental institution that transfers and protects our values and culture. The family provides our society with the necessary stability needed for our prosperity and measured progress.
Parents and children are the basis for the family. Children can in no way be considered apart from or distinct from their parents. Children exist through and thrive on the relationship that exists between a mother and father. Thus the well-being of a child is directly related to the continued shared responsibility. I believe this broader picture of the responsibility of both parents for their children must be considered if a positive solution is to be found to child support payments and family relationships are to be strengthened.
As I mentioned before, the Reform Party has developed a rather comprehensive position on this issue. We addressed the issue of taxation, the level of support through guidelines, and enforcement and compliance with maintenance orders.
On the issue of taxation, child support payments should not be considered earned income subject to taxation. The current tax regime in paragraph 56(1)(b) of the Income Tax Act does exactly that. I ask, where else in the tax system does such an approach exist? Child support payments are the fulfilment of an obligation of parents to their children regardless of family status. It is money directed from a parent for the well-being of his or her child. The money that is received for child support is not earned income. The federal government should therefore not tax these payments as though they were income.
This can be illustrated by contrasting child support payments and alimony. Child support payments are intended specifically for the children and not the mother. Alimony payments, on the other hand, are payments received as income for support of the divorced spouse. This distinction is a crucial one, one that must be recognized.
The effect of the tax system is compounded by the deficiency in the court system. The levels in support awards do not adequately reflect and meet the needs of the custodial parent and children, or perhaps the non-custodial parent.
With these considerations in mind, the Reform position, like Bill C-241, calls for revision of paragraph 56(1)(b) of the Income Tax Act that would strike payments received for child support from being considered as earned income and therefore eligible for taxation.
The Reform proposal would also redirect revenues collected from the taxation of the non-custodial parent to those single-parent families and dual parent families and the children most in need through a complementary increase in the federal child tax benefit, which is to say it is directed to those in need.
These positive and proactive measures will strengthen the circumstances and conditions of single parent families. They will also address the inequity the current tax regime promotes in the tax treatment of intact and separated families.
There is a broader issue of the current level of taxation that all Canadian families face. The reality is that the current tax burden upon the Canadian family is unjustifiably excessive and onerous. A 1994 study on families and taxation found that the average family composed of two or more persons paid 46 per cent of their cash income to various levels of government.
Families cannot now survive on a single income. In 1967, 58 per cent of families were supported by a single income. In 1994 that figure has been forced to an historic low of 19 per cent, and it is not by choice. In a 1994 survey of family attitudes, 52 per cent of respondents agreed with the statement that it is not possible to support a family on one income any more. The same survey stated that 40 per cent of parents agreed that if they could afford to they would stay home with the kids, that they work because they need the money.
Recognizing the needs of families and the pressures they face, Reform has developed another positive and proactive measure that will address the broader issue of taxation faced by Canadian families. The simplified tax proposal will provide some tax relief for Canadians, simplify the taxation system through the elimination of deductions, exemptions, and tax incentives, and in general promote more economic freedom for families. In particular, our proposal will provide a generous tax exemption for children to account for expenses parents incur in raising children. Such a provision will be particularly important for low income earners and single parent families.
A second important issue related to child support payments in addition to taxation deals with a process for administering the issue of child support payments. Families and marriages often break down under acrimonious and adversarial circumstances. Many parents then resort to an adversarial court system. The current system essentially pits one parent against the other. This is not in the best interests of the parents and it is certainly not in the best interests of the children involved.
Changes to the current system are urgently needed. The Reform proposal addresses this issue. We advocate the implementation of unified family courts. An important part of this proposal is the front end process of mediation and conflict resolution. The unified family court would also resolve the blended jurisdiction of family law, such as child support, custody, and access. Presently, jurisdiction for family issues is divided between levels of court at both federal and provincial levels. The development and implementation of the unified family court would better facilitate all aspects of family law by incorporating them under one roof.
The Reform proposal also addresses the issue of guidelines to determine the level of support awarded. When a family and marriage break down, courts are left to determine what the level of payments for child support should be. However, the problem has been, as my colleague has said, the inconsistency and sometimes unfairness of the level of support awarded. Such inconsistency is unfair to all concerned. To address this inconsistency, our proposal is based on well established legal principles of demonstrated need and ability to pay.
In practical terms, Reform advocates the establishment of nationwide guidelines that will take into consideration the income, taxation, and parenting cost implications for both custodial and non-custodial parents. Nationwide guidelines would have the effect of standardizing the level of support awarded. In doing so they will do much more to ensure fairness for those in the situation.
Finally, there is the issue of enforcement and compliance with maintenance orders. The present circumstances are abysmal. For example, in Quebec 25 per cent of non-custodial parents default in paying child support. The phenomenon of default is in part a function of the adversarial system I discussed earlier. A system that perpetuates acrimony and anger is a system that will fail.
Reform's proposal addresses the issue of enforcement across provincial boundaries. We propose the use of the national registry. We will pursue studies to see if this could be co-ordinated through the income tax system. A registry of this type would improve the access to information and effective response desperately needed to improve compliance and enforcement of maintenance orders.
In conclusion, the principle and concept of Bill C-241 is well founded, but more needs to be done to concretely tackle the root causes surrounding issues of child support. Although this bill addresses the issue of taxation, it does not consider this issue of the level of support and the crucial aspect of enforcement and compliance.
The time for action has come. To foster the stability and prosperity for the next generation of parents, children and families, we need to start by reinforcing and strengthening decisions made in this present generation.