I have read it. It helps with dispute resolution at a very difficult time. It is in the best interests of children that the legislation go ahead.
I would like to emphasize that Canadians, regardless of what political party they support, or what part of the country they are from, share some fundamental values. One is that children should come first. All of us in the House acknowledge that children, by the very nature of their childhood, are vulnerable and powerless and that their interests should be put first and foremost in every piece of legislation affecting children. That is what this legislation does.
Those values make up an important part of providing the framework for the legislation. The legislation will provide adequate and consistent child support levels. Those values should respect fathers who make their payments and make sure that those who are obliged to pay actually do.
The starting point for understanding this legislation is to understand that the Canadian family has changed dramatically over the last 20 years. I agree with the sentiment of the Reform Party that oftentimes those changes are not for the better. I do not think any of us are particularly comfortable with the rise in family break-up and divorce.
Over the past 20 years families headed by an individual parent have doubled in number. There are almost one million such families in Canada. In 1990, 61 per cent of single parent families headed by women lived below the poverty line. That is an extremely difficult social problem. It is not the fault of government per se, it is a combination of a number of factors. But government needs to address the issue.
The poverty level for single parent families headed by women is at 61 per cent compared with just 10 per cent for two parent families with children. While the steps taken in this bill will not end child poverty, they are an important part of the Liberal government's program to try to alleviate child poverty.
This measure derives its value from shared principles that we have as Canadians. First is the principle that children should be first in line. These reforms will put them there and keep them there. Child support is the first obligation of parents.
Second is the principle that a child's standard of living both before and after divorce should reflect the means of both parents. These reforms make sure that it does. Children are a shared responsibility of both the mother and father and the income of both parents should be taken into account. A divorce does not change that.
Third is the principle that people in like circumstances should be treated in like fashion. The guidelines mentioned by my hon. colleague are a core part of this legislation. They will ensure that a couple with children who are getting divorced in British Columbia and are in virtually the same circumstances as a couple getting divorced in Ontario will by and large pay the same amount of support for their children.
The strategy that the government has adopted has four interdependent elements. We are introducing child support guidelines to establish appropriate and consistent support levels and reduce the degree of conflict between separating parents. Anyone who has first hand knowledge of a divorce knows that it can be extremely acrimonious and at the end of the day children ultimately are the losers.
The government is also changing the way the child support payments are taxed to make things fairer and simpler. Furthermore, it is enhancing federal and provincial enforcement measures targeted at the wilful defaulters. We are helping working poor families by doubling the level of the working income supplement of the federal child tax benefit over the next two years. I would like to talk about each of these items in a little more detail.
First is the guidelines. As mentioned in my opening remarks, the guidelines are about consistency. We all know and I think agree that consistency is a fundamental part of justice. At the heart of this approach, the guidelines will be used across Canada by the courts, by lawyers and by parents to establish appropriate levels of support payments for children. At present, courts determine support payment levels on a case by case basis. Too often they are inconsistent and it means that somewhere Canadian children are the losers.
The issue of the lack of consistency prolongs litigation and adds to the anguish of parents. Unfortunately, not all judges take the
same approach or have the same philosophy. As a result, levels vary greatly not just across Canada but even from family to family.
The amount that is available to pay for a child's needs should not depend on which province one lives in or to which court room the case is assigned or which party has the more persuasive lawyer. The guidelines will establish without the need for a trial the levels of child support to be paid according to the income of the person paying. The amounts are calculated by a formula that takes into account average expenditures on children at various income levels. If income levels increase or decrease so will the parent's contributions to the needs of children, just as they would be if the family had remained together.
The guidelines are standard but they are also flexible. They allow for particular circumstances, such as child care costs and uninsured medical expenses to be taken into account when assessing the award. Furthermore, a court can also change the amounts if undue hardship can be established.
This approach has tremendous strengths. It is simple and it is standard. It ensures that support paying parents with the same level of income will pay the same amount of child support.
Second, I would like to deal with the issue of tax treatment. As most of us know, the change we are making has been controversial. I support the changes to the tax treatment for a number of reasons. Currently child support payments are tax deductible for the payer and taxable for the recipient. This rule was put in place 54 years ago and it needs to be changed.
Child support is not income for the parent but is money intended for children and as such it should not be taxed. While I am not divorced, when I spend money on my children it is not tax deductible. If I were to become divorced why should it become tax deductible if it was sent to an ex-wife?
Even when incomes are different, the courts often times do not take into account the tax liability. Therefore, by making this rule it will be taken out of the equation.
The no deduction, no inclusion approach will not come into effect until May 1, 1997. It will apply to all new awards made after that date but it will not apply after that date to existing awards unless parties agree or unless a court directs that the changes be made. By waiting 14 months, Canadians everywhere, as well as the provincial governments, are being given the time to adjust to these new rules.
The second most important part of the bill is the area of enforcement. The guidelines or any law for that matter are absolutely useless if we do not have the appropriate enforcement in place to make the law work.
Let me make it clear from the outset that I acknowledge that the vast majority of parents make their payments on time and deserve our respect. These parents take their responsibility seriously and they follow through. I want to point out emphatically that this bill is about the chronic defaulter and the enforcement provisions in it will apply to people who are far too many in number but by and large are not typical of the majority.
Wilful and chronic default by people who can pay but refuse to pay child support is simply unacceptable. The bill will do a number of things. Let me just mention a few of them. Federal legislation will authorize us to suspend federal licences and certificates such as passports in cases of persistent default. The provinces will be allowed access to the database of Revenue Canada to help trace persistent defaulters. Money and effort will be invested in upgrading computer systems to share information among the provinces to help in co-ordinating their efforts.
Some of these measures may seem particularly harsh, but when one looks at the consequences of defaulting parents and the negative effects it has on children and the fact that often the family in which these children live have to go to food banks and incur the negative effects of poverty, these measures are appropriate.
The fourth pillar in our child support strategy is the doubling of the working income supplement. I take a particular amount of pride in this measures in because I was part of a group that lobbied the government to double the working income supplement. When the working income supplement was brought in by the previous government it was placed at $500. It is a tax free benefit that goes to working families with an approximate net income of $25,000.
It recognizes that sometimes there is a cost when someone moves off welfare into the work force. It gives people an extra incentive to move off welfare and into the work force. The government has decided to double it to $1,000 and I applaud it for doing that.
I would like to point out that the working income supplement is tax free and will go right to the bottom line for families who need dollars for their children. It is distributed fairly, benefiting children of separated families and families that remain intact. It is targeted to those most in need.
In conclusion, these guidelines will ensure consistent awards at the appropriate levels with diminished conflict and expenses. A tax rule that reflects the social conditions and the values of 1942 will be changed to conform to current needs.
Effective tools will enhance enforcement so that the people who make their payments will know that those in wilful default will be pursued. Every dollar of increased revenue that Ottawa derives from the tax changes will be ploughed directly back into the system for the benefit of children in low income working families. I ask all members to support this bill.