moved that Bill C-289, an act to amend the Income Tax Act (child adoption expenses), be read the second time and referred to a committee.
Mr. Speaker, it is good to see you back after the summer. I know you had a busy one. I appreciate the opportunity to speak to Bill C-289, my bill that was drawn not long ago. I appreciate it being before the House. Unfortunately, although we made a very heavily supported recommendation to the committee from people right across the country, the bill was not deemed votable. However I appreciate this hour of debate in the House. I know many who are interested in this topic are watching today on the network.
The bill states in its own summary that its purpose to enact an allowance for taxpayers, a deduction for expenses related to the adoption of a child that does not exceed $7,000 when computing his or her income for a taxation year. The expenses must have been incurred in that taxation year or in the previous two years. That is the summary of the bill.
Essentially the bill would recognize that adoptive parents make a significant social contribution to our society by adopting children that have a need for parenting, and that this activity should be encouraged and supported for the good of children and for the good of society as a whole.
I submit that this is a very important bill and worthy of being deemed votable. Unfortunately we did not get that, but I would hope that in the future parliament would entertain doing more for adoptive parents. I think we can all agree that adoption is a gentle option to ensure that a child can be placed with loving and generous parents.
However adoptive parents often face significant upfront costs when they embark on adoption, and out of pocket adoption expenses are not tax deductible. This bill would be a first step toward addressing some of the concerns of adoptive parents.
Adoptive parents have unique challenges and expenses when they adopt a child. Even in public adoptions where provinces have traditionally covered the related adoption expenses, we are now starting to see adoptive parents faced with new fees and ever increasing costs such as $1,200 for home studies, et cetera.
In the case of a private or international adoption, couples may face costs in the thousands of dollars in legal fees, home studies and a number of other studies that they must cover off. Such upfront costs may result in the discouragement of couples even thinking of adoption. It would thus serve a larger public interest to allow adoptive parents to deduct expenses related to the adoption of a child to better facilitate and better encourage this act of generosity and love that serves us all so well.
Bill C-289 is essentially an adoption expense deduction bill which proposes to allow a taxpayer a deduction of up to $7,000 for expenses related to adoption.
The introduction of the bill follows consultation with a number of adoption organizations as well as individuals who have personally adopted children. Statistics Canada's national longitudinal survey of children and youth has clearly shown us, in empirical terms, clear measurables, that an environment where there is a mother and a father is an environment where children thrive. Children without parents are at a disadvantage. I believe we should do all we can to encourage families who have the desire to adopt children instead of making adoption a difficult alternative.
We need to send a message of appreciation for the social contribution that adoptive parents make and recognize the inequities that adoptive parents face.
Adoption is under the control of the provinces, but Bill C-289 is a means by which this important institution could be encouraged and supported at a federal level through the means of a federal tax deduction format. Bill C-289 therefore is constitutional and fulfils another of the guidelines that the subcommittee required for a bill to be deemed votable.
Here are some details of the bill. As I said, it would cover off the legal expenses related to adoption. Any kind of illegal adoption or surrogate parenting arrangements would not be covered, but the legal adoption expenses that relate to adoption would be tax deductible up to a maximum of $7,000. The $7,000 figure was used so that it would be the same as the maximum amount deductible for the child care expense deduction currently in the tax code, the CCED, which is essentially a deduction that recognizes the costs of third party care.
If the state can recognize these costs, I believe it is appropriate to recognize that there are costs specifically related to adoption which adoptive parents face. The adoption expense deduction would be available for both domestic and foreign adoption. It would include expenses for pre-adoption home study as well as birth parent counselling and travel expenses related to the adoption of the child. All these are incurred regularly by adoptive parents today with no recognition.
It would be available for the adoption of any child under 17 years old, again matching the CCED provisions. If any expenses are to reimbursed by an employer or by the government, they would not be eligible for this tax deduction. We thought out those aspects of the bill.
The numbers of adoptions are difficult to attain but the Library of Parliament indicates that the total number of domestic adoptions in 1990 was about 2,800. The most recent figures available indicate that some 1,800 international adoptions occurred in 1997. The province of Quebec estimates that the average cost of an international adoption for adoptive parents is $20,000.
The paper that the Library of Parliament prepared for my office used the assumption that Bill C-289 would not come at a high cost to the treasury. The estimated cost to federal tax revenues for this bill, using a $7,000 adoption expense deduction, is approximately $5 million at the current estimated adoption levels.
In addition to sending a message of appreciation and encouragement that parliament could send to adoptive parents through the bill, allowing adoption expenses to be tax deductible would make the tax system more equitable for adoptive parents for two reasons.
First, biological parents have the pre-natal and post-natal costs of having children covered under medicare, but adoptive parents have to pay out of pocket expenses related to adoption costs directly out of after tax income.
Second, currently fertility treatments are tax deductible. According to the Library of Parliament fertility treatment expenses are eligible for the existing 17% federal tax credit for medical expenses provided for in section 118.2 of the Income Tax Act. Thus it could be argued, and this is straight from the document prepared by the Library of Parliament for my office, that among those taxpayers who are unable to have children naturally the current tax law favours those who seek fertility treatment over those who adopt. Yet it could be said that adoption is more socially beneficial since it aims to provide a family for children who already exist.
It is inherently unfair and poor public policy for expenses related to in vitro fertilization to be tax deductible while adoption expenses, which by definition relate to a case where a child has already been born and is in need of parents, are not tax deductible.
In the end I also submit to the House that adoption saves the taxpayer money as many children in need of parents would no longer be under the care of the state with the related expenses that are all paid by the state. It would result in a permanency for the child, which would also result in a stronger society and as a whole more healthy child development with a two parent family.
This topic has been in the media. I just make reference to some of the statements that have been captured in the media concerning this issue. The Winnipeg Free Press on January 4, 2000, in an article by Leah Janzen indicated:
Faced with a critical shortage of loving homes for older children and those with special needs, Child and Family Services is offering paycheques to adoptive parents.
It is not something we are advocating here, but we are advocating through the tax system the recognition of the social contribution made by adoptive parents. Ms. Janzen went on to say:
But so far, with about 700 needy children on their waiting list and only 125 prospective parents in sight, the gap is still heartbreakingly wide.
In the Ottawa Citizen on April 3, 1999, Derek McNaughton wrote:
Between 1997 and 1998, the adoption rate for children from overseas countries jumped by at least 30 per cent. For China, the number of adopted children has rocketed upward by 73 per cent.
He went on to say:
Currently, Quebec is the only province providing tax relief for adoptive parents. And in its recent budget, the Quebec government raised the allowable tax deduction for adoptive parents from a ceiling of $2,000 to $3,000.
A lady whom I have had some contact with on this topic, Judy Grove, executive director of the Adoption Council of Canada, says that the issue of tax relief is rooted in how this country values children. She says that politicians from both federal and provincial governments are long on rhetoric about the needs of children but short on action. She states:
It's very shortsighted, adoption, from the view of the state, is a cost effective process because kids that are adopted are not on the child welfare budget. If you look at the effect of allowing tax breaks, it makes adoption easier and therefore it saves the state money.
She makes a very valuable and valid point. The Adoption Council of Canada has also sent a number of letters to my office. In one of those letters on this private member's bill it points out that there are more than 70,000 children in foster care in Canada. More than 20,000 of these children are available for adoption. One of the main barriers, they pointed out to me, to the adoption of these children is the financial burden adoptive parents face.
Most adoptions of Canadian newborns and infants are facilitated through private adoption agencies which have fees that range anywhere from $6,000 to $10,000, and in some cases even more than that.
This proposed tax deduction will make it more feasible for lower income families or those concerned about the costs to adopt and care for children. That just makes sense. This bill would be a public recognition or a statement on the value of the contribution those parents are making.
What about public support? Do Canadians want Bill C-289 to pass? I would submit that public opinion is very supportive. Since I first introduced the bill in the first session of the 36th parliament petitions of support have steadily been coming into the House of Commons. I have received many e-mails and many letters of support with really no media play or public promotion on my part at all. I was actually surprised by the overwhelming support I have had on the bill without really publicizing it or promoting it in the least.
In parliament there have been about 4,000 signatures on petitions in support of the bill already presented to the House of Commons. I have another 1,000 signatures waiting. I have some petitions that I wanted to present here today but I plan to do that tomorrow, all in support of the bill.
I thank the many Canadians who supported my office and supported me in the endeavour of bringing this bill forward to the floor of the House of Commons. I thank the Adoption Council of Canada, Judith Grove and Connie Premont who created an e-mail list and communicated the intent of this bill to many supporters right across the country. I would also like to thank the many adoptive parents who sent me pictures and letters and encouraged me to contact other members of parliament to support this initiative.
This is good legislation. I urge all members to strongly consider making a bill of this kind something the government would develop legislation for and that we move to recognize the contribution of adoptive parents, especially when we so regularly say how important children are and how legislation needs to be in the best interests of children. Recognizing the contribution of adoptive parents would go a long way to us taking a step in that direction.