Mr. Speaker, I am very pleased to speak in the House on the second reading of Bill C-41, an act to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act, Attachment and Pension Diversion Act and the Canada Shipping Act. My comments will outline the key elements of the federal government's child support strategy encompassed by the amendments to these acts.
At the heart of these reforms is the principle that children should be a prime consideration in the unhappy circumstances of marriage breakdown. Child support is the first obligation of parents and it also of prime importance to us as legislators in the House, at least on this side of the House. The approach and changes announced in May are designed so that Canadian children will definitely benefit.
The government is changing the way child support payments are taxed. I am pleased to see the government fulfil its commitment to do this.
It was in 1994 in the House that I put forward a motion which read:
That in the opinion of this House, the government should amend the Income Tax Act so that the child support payments are no longer considered taxable income for their recipients.
That motion was passed unanimously by the House. This served as an indicator to the government that it was time to rethink a taxation policy that was introduced in 1942 and which no longer reflected the reality of single parents, primarily working mothers in the 1990s.
Canada will be moving to a system known as no deduction, no inclusion. The new rules will apply to orders or agreements made on or after May 1, 1997. Child support paid under a court order made before May 1997 will continue to be deductible to the payer and included as taxable income to the recipient until the support payment is varied by the court or the parties agree in writing, or the payer and recipient jointly sign and produce a form with Revenue Canada indicating that the new tax treatment should apply to the face value of their existing support order.
The government is introducing child support guidelines to make child support awards fairer and more consistent and to reduce the degree of conflict between separating parents. The guidelines will be used across Canada by the courts and by lawyers, judges and parents to establish appropriate support payments.
The guidelines have three main parts. First, payment schedules are presented in tables like tax tables that show the basic amount of support from a non-custodial parent according to the number of children or the income of the support paying parent.
Custodial parents also contribute a similar share of his or her income to the needs of the children by virtue of the fact that the children will share in the resources of the parent with whom they live because their standards of living are inseparable. As the income of both parents increase or decrease so will their individual contributions to the needs of their children.
Second, the scheduled amounts can be adjusted to recognize individual family circumstances. There are four categories of special expenses that can be added to the scheduled amount, if they are reasonable and necessary, in light of the needs of the children and the means of the parents, including child care costs for preschool children and uninsured medical costs.
The guidelines also allow a court to alter the award in the rare circumstance that it would cause undue hardship to either parent or to the child.
Third, the government is enhancing federal and provincial enforcement measures. The enforcement of child support is mainly a provincial and territorial responsibility. The measures the government is proposing complement provincial and territorial enforcement efforts already in place. The government is targeting, in particular, persistent defaulters. Some of the enforcement measures include a national public awareness campaign, a federal licence suspension initiative, more aggressive collection of out of province orders, improved federal tracing services, improved federal pension diversions, improvements to computer systems connecting federal, provincial and territorial enforcement services, and a new federal support enforcement director.
Research will continue into developing new strategies for enforcement of child support debts and into identifying why so many non-custodial parents default.
Fourth, as the purpose of these reforms is to help children, the federal government will reinvest its anticipated revenue gains from the new tax rules in measures to benefit children. The government will fund a doubling of the working income supplement of the federal child tax benefit from a maximum of $500 per year to $1,000 per year. The working income supplement provides a non-taxable benefit to supplement the employment earnings of families with earnings of at least $3,750 and net incomes below $25,921.
In conclusion, I believe the reforms that I have presented meet the long overdue need for reform in the way Canada ensures support for children following family breakdown. The reforms will put children first. They will put responsibility fairly on the shoulders of the parents and will move Canada's child support system into the nineties.
