Mr. Speaker, the 1996 budget is about the future, the secure prosperous future all Canadians desire. If any group represents Canada's future it is our young people. That is why the Liberal government's commitment to fair, sustainable and secure social programs would be incomplete if we did not include action to assist children who are the most vulnerable and in the greatest need. At long last this budget introduces a new strategy to strengthen protection for children buffeted by divorce and separation.
As the Minister of Finance told Parliament on March 26, and as many Canadians have known for some time, the current child support system has added to the uncertainty and anxiety many Canadians feel. The minister clearly outlined that in our view children should be the first in line. Child support is the first obligation of parents; it is not discretionary.
The budget acted on that principle. It announced the child support reforms which take wide ranging action to ensure the child support system is based on what is best for children. To start with, the government is changing the way child support payments are taxed. Until now child support payments have been tax deductible for the paying parent and taxable as income for the parent receiving the payments.
The budget proposes that we move to a system known as no deduction, no inclusion. What does that mean? Custodial parents will no longer be required to include child support payments in their taxable income and support paying parents would not deduct these payments from their taxable income. These new tax rules will apply to court orders or agreements made on or after May 1, 1997.
Child support paid under a court order made before May 1, 1997 would continue to be deductible by the parent and included as taxable income by the recipient until the support payment is changed by a court ruling or the parties add a clause to their agreement providing that the new tax rules will apply, or the payer and recipient file a joint election with Revenue Canada.
Coupled with this important tax change is a second major component of the child support reform. The government is introducing child support guidelines to make support awards fair and more consistent and to reduce the degree of conflict between separating parents.
These guidelines will be used across Canada by the courts, lawyers and parents to establish appropriate support payments. They include a payment schedule, a set of tables showing the basic amount of support to be paid according to the number of children and the income of the support paying payment.
The second part of that is that scheduled amounts can be adjusted to recognize individual family circumstances. Special expenses for child care, health care, education or extracurricular activities can be added to the scheduled amount provided that these expenses are reasonable and necessary in light of the needs of the children and the means of the parents.
The guidelines allow a court to alter the award in exceptional circumstances where it would cause undue hardship to either parent or to the child.
The third component of the child support reform strategy will be the enhancement of the federal-provincial enforcement measures. Children benefit from fair support awards only if they are paid in full and on time. The numbers are appalling. Far too many children in Canada are left without adequate financial means because one of their parents is willfully ignoring their responsibility to their children. Some one in four children's parents are fully paid up in their child support awards. This is an appalling situation.
As a federal government we must remember that child support is mainly a provincial and territorial responsibility, and so the
measures we are proposing compliment the enforcement efforts and strategies at that level.
It should be emphasized that we are targeting parents who are persistent defaulters on their support payments. How are we to do that? We will start a national public awareness campaign that will aim at changing public attitudes about child support. It is not discretionary; it is the first responsibility of parents.
We will provide provincial enforcement programs with a new enforcement mechanism. Legislation will be enacted that will authorize the suspension of federal licences, privileges and certificates such as passports when someone has demonstrated persistent wilful default.
The federal government will provide up to $13.7 million over five years to help the provinces expand the use of more aggressive enforcement measures and streamline the collection of out of province orders.
Improvements to the federal tracing service will allow the release of certain information from designated federal information banks to help locate defaulting debtors. This will include Revenue Canada to the list of departments whose data bases can be searched at the request of provincial enforcement agencies.
We will also improve federal pension diversions to ensure this measure can be applied to persistent defaulters. This can be done even if the defaulter refuses to apply for pension benefits to ensure the maximum amount of benefits goes to child support.
Improvements to computers systems will allow for on line computer access between federal, provincial and territorial enforcement services. This will enhance the efficiency of the garnishment and tracing service and greatly facilitate the exchange of information.
This is concrete and substantial action, but I am glad to say the 1996 budget plan does not limit new assistance to children whose parents are separated or divorced. There is another very important measure. The budget announces we will be doubling the working income supplement under the child tax benefit in two steps.
This will ensure and encourage employment and self-reliance by helping low income parents meet some of the expenses resulting from membership in the paid workforce, expenses like child care and transportation. It also helps make up for the benefits lost by parents who leave social assistance to re-enter the workforce.
Beginning in July 1997 we will go from the current maximum of $500 to $750, and in July 1998 it will be increased to a maximum of $1,000. When fully phased in this will result in an additional $250 million in support annually to approximately 700,000 low income working families, one-third of which are single parent households.
I am proud to be part of a government that puts children first, that thinks about the cost of not taking care of our children and that makes sure parents understand the responsibility to their children.
I am sharing my time with my colleague from Hillsborough who will take the remaining time.