moved:
That, in the opinion of this House, the government should consider amending the Income Tax Act to provide a caregiver tax credit for those who provide care in the home for preschool children, the disabled, the chronically ill or the aged.
Mr. Speaker, over the past two years I have presented a petition to the House of Commons which basically states that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society. The petition also states the Income Tax Act discriminates against families that choose to provide care in the home to preschool children, the chronically ill, the disabled or the aged. The petition therefore calls on Parliament pursue tax initiatives which would do just that.
Motion No. 30 is a votable motion of the House of Commons which asks the House of Commons and the government to consider the advisability of this motion and to provide a caregiver tax credit to those who choose to provide care in the home to preschool children, the chronically ill, the disabled or the aged.
I will give a bit of background. Last weekend I had the opportunity of attending a wedding of my cousin. As they exchanged vows I began to consider what family really meant to me.
This is a young couple starting their lives together. I wondered when they exchanged their vows did they automatically become a family. I looked around the church and I found there were many children there and I realized even more that family means children.
As I looked at my family members and relatives I saw an aunt whose husband had been disabled, chronically ill, and she had to leave her work to care for him. Tragically he passed away.
I saw a sister who is married but who decided not to have children. I saw my brother who has daughters, but both he and his wife decided to continue their careers because a parent lived next door to them who could care for their daughters during their formative years.
I saw my grandmother who is now 95 years old, who after my grandfather passed away had to leave her home because she was no longer able to care for it. Then she stayed with my mother. After some time as she needed more and more care it was evident she needed institutionalized care. I also saw a cousin who presently lives common law and who has no children.
Then I looked at my own family. My dear wife and I will celebrate our 25th wedding anniversary this year. We have three lovely children. My wife took 13 years off from her career to help raise those children to be fine young people.
The issue surrounding Motion No. 30 is family responsibilities. They are lifelong responsibilities, from cradle to grave. They reflect family values and social norms and values and choices related to children and other family members who may be chronically ill, aged or disabled
I quote Dr. Benjamin Spock: "Children are made to love. Parents love children because they remember being loved so much by their own parents. Despite all the hard work, taking care of children and seeing them grow up to develop to be fine young people gives most parents their greatest satisfaction in life. To reflect on children we se that this is creation, this is our visible immortality".
Dr. Penelope Leach is the author of Children First , a wonderful book which states that if couples are contemplating having children, one thing they must understand is they must be prepared to put the interests of their child ahead of their own. This is very difficult and in many cases not possible in today's society.
What is the current situation in Canada with regard to families and children? I come across many cases in which people have said: "Both of us are working. We have our children in child care spaces but after child care expenses, after income taxes, after the cost of employment, my net take home pay is so small I really do not know why we are doing this".
We have a situation now in which the drop-out rate in high school is around 32 per cent. We have growing concern about young offenders and crime in general. We have concern about the literacy rate in Canada, which is presently at about the grade six level.
In 1968, 68 per cent of families with preschool children had one parent staying in the home and caring for those children. Twenty-five years later in 1993 that reduced to only 12 per cent.
We have social agencies everywhere for behavioural, learning and social skills. Schools even have full time psychologists now. Families are having increasing difficulty parenting their children.
The Standing Committee on Health is presently studying preventive strategies for the good health of children. We heard a number of witnesses. I refer to a couple of the points raised.
There was the point that quality day care cannot be provided or delivered without government subsidy, the reason being the salaries paid to qualified caregivers averages somewhere around only $21,000. That was presented to us by Martha Friendly of the U of T child resource centre. She confirmed that the demand for subsidized child care is much greater than the availability.
Families are different. Choice and options are essential and desirable. Dr. Fraser Mustard of the Canadian Institute for Advanced Research also came before the committee. He told us about research that clearly shows there are factors occurring during the first three years of life that have a significant impact on the likelihood of positive outcomes of children, cognitive skills, social skills, behavioural skills, coping skills, mental and physical health.
We also had Dr. Marc Genuis of the National Foundation for Family Research and Education. He told us about a meta-analysis, a analysis of all the studies done on this subject matter.
He told the committee that if a child had more than 20 hours per week disruption of the secure attachment with the caregiver, there was evidence of increased likelihood of negative impact on socio-emotional development, behavioural bonding, consistent, secure attachment to an adult.
The Globe and Mail April 22, 1996 reported on a U.S. study, the most far reaching and comprehensive dealing with the first 15 months of infancy. It said the likelihood of a troubled mother-child bond can be increased by child care that is of poor quality, that changes several times or that extends to more than 10 hours per week. It also said that after the mother as primary caregiver, child care centres were ranked lowest in quality whereas fathers, relatives or other caregivers in the family home were ranked the highest.
This is not a situation of black and white. This is a situation of probabilities. We can have many situations turning out different ways but we are talking about the likelihood of outcomes. It is important for us to ensure there are high likelihoods of positive outcomes for the development of our children.
As legislators our job is to provide optimum flexibility to families to choose options suited to their situation and to their values.
What if more families to could afford to provide direct parental care? In the short term, it would free jobs possibly for those on welfare or for those who really need the jobs. It would free the demand on child care spaces and institutionalized care spaces. It would reduce stress on the family and, most important, it would recognize the value of work in the home.
In the recent census we included a question to get information about the amount of unpaid work. In the long term health, social and criminal costs to Canada would decrease significantly because of the more positive outcomes of our children.
It would create healthier, happier families. It would allow families to better discharge their lifelong duties. It would be an investment in the healthy outcomes of our children and it would constitute a significant saving to the Canadian taxpayer.
The viability of M-30 needs to be assessed not from a financial perspective, but from a balanced perspective, taking into account both social and fiscal realities. The finance minister said to the House in his very first speech: "Good fiscal policy makes good social policy and good social policy makes good fiscal policy".
Now is the time to recognize that reality. Now is the time to stop defending the status quo based on soft mathematics. Now is the time to have tax reform which restores fairness and equity to all Canadians. Now is the time to reflect social priorities in our tax policy.
The recent bill on the employment insurance program showed some movement on behalf of legislators in Canada to recognize the value of work in the home and the importance of caregiving in the home. That reform showed this by recognizing and offering for the first time training assistance and wage subsidies to parents who have taken parental leaves to provide that parental care.
In October 1994 I had a private member's Bill C-256, which proposed income splitting between couples so that one could stay at home and care for preschool children. During the debate on the bill the finance department spokesman came before the House and dismissed it on the basis that the idea was too costly and because we had already provided many tax breaks to the family. In my view, no assessment of the social realities was given, no recognition to long term benefits and no mention of anything other than it being simply too costly.
Parents know intuitively that direct parental care is optimal. In a recent Angus Reid survey 70 per cent of parents, where both were working and had preschool children, said that if they could they would choose to have one stay at home to provide direct parental care for their child.
I am not naive on this issue. The pie is not getting bigger. We do not have more money to spend. That means that we have to work smarter with what we have. Therefore, we need to reassess the propriety for existing deductions, tax credits and other tax benefits incorporated into the Income Tax Act. We need to establish whether tax breaks will be given on the basis of need and family income, such as is done with the old age security, the age credit and the new seniors' benefit which was announced in the last budget. We need to consolidate existing resources and allocate them to where we get the optimum benefit for all Canadians.
These changes will result in stronger, healthier families. I believe that if the family is strong the deficit would be gone.
The financial arguments against M-30, to provide a caregiver tax credit, take the narrow view of fiscal expediency and dwell on why we cannot rather than on how we can. I would like to give some examples to the House.
The child care expense deduction in the Income Tax Act provides for preschool children a deduction of $5,000 per child. That is not available to a stay at home parent. It is only available to someone who actually incurs the cost and pays someone else to care for their child.
What is worse is that a deduction is worth more to a high income earner than to a low income earner. As an example, someone who makes $60,000 a year and pays $5,000 for child care space receives a refund cheque from the government of $2,600. However, if someone makes only $30,000 and incurs the same $5,000 cost, their refund is only $1,800. That is an $800 difference when both taxpayers incurred the same expense for child care costs.
I have Bill C-240 before the House which proposes to convert that deduction to a tax credit so that it will be equitable and fair for all Canadian taxpayers.
Another example would be the supplement to the child tax benefit, which is $213 per year, or a working income supplement, which could be up to $500 a year. However, these are quite insignificant. They would represent something like about $12 to $13 a week. That kind of additional assistance to couples who want to choose to provide direct parental care simply does not facilitate that choice.
Also there is the disability tax credit, which can accumulate savings of some $720 to the taxpayer who is caring for a disabled relative or dependant. The reason that they get the savings is that the disability credit is transferable to the relative that is taking care of them. Again, this represents a very small amount of money, some $20 a week.
If Canadians were forced to provide care because they could not afford the cost of institutionalized care, this modicum, this very minuscule amount of dollars certainly is not going to deal with a situation that is imposed on a family. The family has that responsibility. Canadians want to be able to provide that kind of care in those situations for their family members.
The medical expenses credit provides a 17 per cent credit for expenses in excess of the lesser of 3 per cent of net income or $1,614. This is available to all Canadians. What is not available to all Canadians is that those who are employed, who have employer paid plans, have all of their expenses covered subject to possibly certain deductions and there are some uninsured costs. Those uninsured costs then can be covered when they file their income tax return to claim the additional amount of the credit. Therefore, those who have insured plans have a better opportunity to recoup a greater proportion of medical expenses. That is not available to families who make the choice to provide care in the home to a family member.
We should have a special benefit. I proposed to the finance minister that there should be at a point special rules for uninsured Canadians so they do not have to have a deductible of the first 3 per cent of their net income and that every dollar of medical expenses incurred by families that are uninsured be covered in the Income Tax Act.
There is also an infirm dependant credit which could generate savings for a family of up to $400; again, some $8 per week.
The finance department in the past, and I suspect today, will characterize the existing benefits as significant assistance to the family. I characterize these benefits as inadequate in the extreme.
By investing in families through meaningful tax breaks which facilitate care in the home to preschool children, the chronically ill, the disabled or the aged, the savings to Canada in the long term would far outweigh the costs.
Motion M-30 is not a simple solution to a complex problem but rather an opportunity for all hon. members to ask themselves whether we can do better. I believe that we can.
Tax reform is an issue which I have talked about substantially in the House on a number of private members' bills and motions. I have also prepared a report which I sent to the finance minister before preparation of the last budget. I believe that the finance minister is open to suggestions on tax reform. A blue ribbon committee has been established to deal with the corporate taxation issue. I know the minister was very receptive to a number of the changes proposed. I am sure that the kinds of things that we are talking about are progressive and should be looked at very carefully.
Tax reform is not an option, it is an imperative. Therefore on behalf of the traditional family I ask the finance minister to heed his own words when he said that "good social policy makes good fiscal policy and good fiscal policy makes good social policy".
Now is the time for tax policy to reflect good social policy and the best interests of the Canadian family.