STFC Committee Meeting

SUB-COMMITTEE ON TAX EQUITY FOR CANADIAN FAMILIES WITH DEPENDENT CHILDREN OF THE STANDING COMMITTEE ON FINANCE

SOUS-COMITÉ SUR L'ÉQUITÉ FISCALE POUR LES FAMILLES CANADIENNES AVEC DES ENFANTS À CHARGE DU COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 29, 1999

• 1822

[English]

The Chairman (Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.)): Pursuant to the motion adopted by the Standing Committee on Finance, dated March 17, 1999, the subcommittee now resumes its study on tax fairness for Canadian families.

This evening I'm pleased to welcome, from Mothers Are Women, a member of the steering committee, Sonya Nigam; and from FatherCraft Canada, its executive director, Mr. Glen Cheriton. We are also waiting for Ms. Donna Eaton. I welcome both of you to this very important work this evening.

We would like to begin possibly by having your presentations, and then we will open up for discussions amongst members. Should Ms. Eaton join us imminently, we will have her make her presentation at the same time.

Maybe we'll go with ladies first, just to be respectful.

Ms. Nigam.

Ms. Sonya Nigam (Member, Steering Committee, Mothers are Women): Thank you, Mr. Chairman and honourable members. My name is Sonya Nigam and I'm here this evening on behalf of Mothers Are Women.

Mothers Are Women is a progressive grassroots feminist organization that advocates on behalf of mothers who choose or find themselves to be at home with their children, whether full-time or part-time. MAW seeks a balanced and integrated approach to the objectives of gender equality in the home and the workplace, the well-being of children, and mechanisms that help women and men balance their responsibilities of paid work and family.

Since MAW was founded in 1985, it has undertaken a number of research and public education projects that have focused on child care and unpaid work. MAW was one of the organizations that lobbied to get unpaid work questions included in the 1996 census, and MAW continues to work to bring an understanding of unpaid work, including that of parental child care, into the Canadian public, economic, and social policy framework.

In addition to our advocacy work, we provide support to mothers at home. We publish a national quarterly magazine and have a website. We coordinate discussion groups and book groups, as well as host workshops. MAW respects and supports all child care choices and recognizes the full diversity and multiformity of families in Canada.

• 1825

We also support a progressive tax structure and a fixed system of taxation based on the individual.

What I would like to talk about now is how unpaid work fits into the discussion of our tax and transfer system. Women's unpaid work, particularly caregiving work or dependant care work, remains poorly understood and severely undervalued in Canada and elsewhere. This lack of recognition of unpaid work is one of the reasons women's responsibility for this work leads to discrimination and poverty. The gender wage gap remains as wages for women's paid work continue to be low, especially in the caregiving fields that parallel the kind of free unpaid work that women do.

Women in Canada have lobbied for various mechanisms to address their concern of obtaining greater economic security while recognizing their responsibility for dependant care. This has led to important improvements in the area of family law as well as an array of mechanisms including pay equity, employment benefits, maternity leave, pension benefits, and taxation measures.

However, upon analysis, it is clear that women's unpaid contribution to the well-being of their children, households, and communities has been only selectively addressed. The only area in which it has been directly addressed is in the area of family law. But in all other policy areas, including the tax and transfer system, women's unpaid work continues to be underrecognized and undervalued.

Most of the social benefits available to women, which in hindsight are being highlighted by the government as examples of recognizing women's unpaid work, are directly related to paid work. This leaves women without paid employment or a recent employment history out of the picture, just as they were 50 years ago.

It appears that the Canadian government, with some ambivalence and little coordination, is currently pursuing three policy objectives in relation to Canadian families: gender equality, the well-being of children, and balancing of paid work and family responsibilities or unpaid work.

In pursuing the objective of gender equality, the government has been telling women in Canada that they should decrease their unpaid dependant care work and focus on work for pay to achieve that equality. The reality is that women continue to place caring for their children as a very high priority when deciding what, if any, paid work to do and when to do it.

Increasing women's participation in the paid workforce has not achieved gender equality, because there also remains great inequality in unpaid dependant care work. Increasing men's participation in unpaid family work is essential to gender equality.

For the government to move forward on gender equality in our society, it must recognize unpaid dependant care work as part of the work that women and men do. By ignoring or refusing to recognize unpaid work in our policy discussions, obvious mechanisms such as the tax system become flash points for such support. Although we believe the tax system is essential to an integrated approach, we do not feel it should stand as the only vehicle through which family policy should be driven.

Mothers Are Women believes it is time for the federal government to develop a comprehensive federal initiative that encompasses the policy objectives of gender equality, child welfare, and balancing of paid work and family responsibility. By undertaking an active, comprehensive initiative in this area, the federal government could ensure that measures developed under one policy objective are not in conflict with mechanisms designed to meet other policy objectives. It could also ensure that policy objectives could be implemented in a way that does not advantage one kind of family over another, but that also targets those most economically vulnerable. It would allow the federal government to take a leadership role in an area that clearly has overlapping concern with the provinces.

In talking about policy directions, I would like to add that there is a need to recognize and support unpaid dependant care work while it is being done and to ensure that those who undertake such work for some period of time are not penalized or disadvantaged in their later years for having done so.

• 1830

In order to move policy development forward, we feel that the government must make a commitment to more research. Understanding the critical role of unpaid work and the functioning of households, communities, the marketplace, and national and global economies has critical and far-reaching implications for both social and economic policy in Canada.

As much as this is an issue of private decision, it is also a decision with macroeconomic dimensions. Statistics Canada is a world leader in the area of unpaid work and has a data foundation for concrete research that can more fully inform public policy on the issue of unpaid work. This data has been vastly underutilized by the government. According to an official at Statistics Canada, Statistics Can is unable to confirm that the 2001 census of the population will even include a second round of questions on unpaid work.

Along with the commitment to gathering data on unpaid work, more research in the area of how unpaid work is valued is needed in order to integrate unpaid work into our system of national accounts. It is the system of national accounts that underpins most macroeconomic analysis. Economic statistics such as the GDP, consumption, real disposable income, and productivity form the basis on which Canadian fiscal policy, including tax policy, is developed.

Not only do we need more research, we also need more public discussion and consultation with government. The government should support a consultation process and the encouragement of public debate, including public education and information based on a progressive understanding of dependant caregiving as unpaid work.

In closing, we would like to acknowledge that the unpaid work issue is a complex issue. The process of recognizing unpaid work challenges many of our assumptions. It causes us to throw up our defences and draw lines in the sand. Individuals, organizations and various government ministries have spent a lot of time and effort in defending their points of view and attacking others. This argumentation has caused Canadian policy to stall. This finance subcommittee has the opportunity to move things forward in a positive direction.

Mothers are Women calls upon the finance subcommittee on tax equity for Canadian families with dependent children to adopt the following recommendations:

Firstly, we recommend that the federal government, in consultation with all stakeholders, develop a comprehensive federal initiative that encompasses the policy objectives of gender equality, child welfare and the balancing of paid work and family responsibility.

Secondly, any changes to the tax and transfer system should target immediate and/or projected benefits to unpaid workers to recognize the work of unpaid dependant care of children as productive work.

Thirdly, we recommend that the federal government commit to collecting data on unpaid work through the 2001 census and beyond, as well as increase its support for research in the development of valuation methodology for unpaid work so that the informal sector and the household sector can be included in our national accounts.

Finally, we recommend that the finance minister increase the government's financial support for Status of Women Canada in its work of research, policy development and interdepartmental consultation, and its support of women's equality-seeking groups through the women's program on the issue of unpaid work and dependant care.

Thank you.

The Chairman: Thank you very much for your presentation, and especially your recommendations.

I'd like to now turn to Mr. Cheriton for his presentation. Welcome.

Mr. Glen Cheriton (Executive Director, FatherCraft Canada): Thank you, Mr. Chairman, members of the committee.

I want to thank you for inviting me here. I think this is actually on a taxation matter. It's the first time a men's organization has actually been invited to present on a taxation issue. This has been going on for a long time. There were no men's groups allowed into the Thibaudeau case. And men's groups were also completely excluded from the hearings on the taxation of child support. So this actually is an historic first.

About FatherCraft, I'm the executive director. My name is Glen Cheriton. I won't be reading my presentation; I will be going through it and making various points.

• 1835

FatherCraft is a non-profit organization. We started off doing a certain amount of parenting assistance, mostly for single fathers. As a result of that hands-on phone assistance, we discovered quite a number of issues that they were concerned about. I wanted to go through those issues.

The first one that surprised me was the fact that a lot of these single custodial dads were not allowed to have the equivalent-to-married exemption, even though they had the kids full-time. The reason for their not having this exemption is because they were also paying support. They were paying support as well as being the sole custodial parent. This seems to be a real problem for them, because they are not getting the same benefits as they would if they were a single mother. We don't find single mothers being in a situation of paying support and being custodial parents.

These are not small numbers. In fact, it looks like about 40% of single fathers are paying support in addition to being the custodial parent. This is a bias in the income tax system. It's built right into it. I brought it along so I can refer to various places in here.

The second problem with the Income Tax Act is the child tax credit. That is profoundly biased in favour of women. The data from Human Resources Development Canada show that single mothers get about 40% higher child tax credits than intact families. This encourages family breakup. When you look at the amounts received by single fathers, they are lower than those received by intact families, even though their incomes are lower. The origin of this in fact is in the Income Tax Act, where it refers to: “the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent”.

So how that has been interpreted by Revenue Canada is that any woman in the household, whether this is a second spouse, a girlfriend, whatever, even though she's not the natural parent, receives the child tax credit. I refer in my submission to a Vancouver case of a natural father who appealed this because they said, “You are not the parent.” For the purposes of the income tax, fathers are told, you are not a parent because you are a man. Any available woman is the real parent, even though she's not the natural parent.

There's an additional same point in here that says this child tax credit cannot be shared. In other words, if you are sharing parenting, you cannot share this between a man and a woman. It has to go to the woman. There are a few exceptions to that. Further on in the Income Tax Act it says: “the female parent”—

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Ref.): Mr. Chairman, I'd ask the guest this.

When you make those references and you're turning in the Income Tax Act, could you refer to the page number. And when you cite a case, just cite the name, because it will certainly be easier for our researchers a little bit later on when they're following the transcript. Thank you very much.

The Chairman: Okay.

Mr. Glen Cheriton: This is from the Income Tax Act, 1997, page 806, paragraph 122.6(f), I believe.

The Chairman: You also are creating history today, sir, because it's the first time I've seen a witness come with a tax act and know it inside out. Continue, please.

Mr. Glen Cheriton: I think my experience has been that I have talked to a lot of fathers who do know this. If you think I know this, you should see them. It's because I am standing on the shoulders of people who know this backwards and forwards, and have been through this system and have been told, you can't do this because you are a father.

There are certain exemptions to this, but it is controlled by the female parent. This comes from page 2073, paragraph 6301(1)(a): “the female parent of the qualified dependant declares in writing”.... This is that the male parent can become the recipient of the child tax credit if “the female parent of the qualified dependant declares in writing to the Minister of National Health and Welfare that the male parent, with whom she resides, is the parent of the qualified dependant”, and so on. There's actually even a provision in paragraph (c) for having more than one female parent. I haven't quite figured that one out, but in any case there's more provision for more than one female parent than there actually is for the male parent.

• 1840

Moving on, there is a problem we've discovered that relates a lot to the taxation of child support, and it is that there is evidence of widespread evasion of taxes on child support, on the reporting of this income. What this amounts to is income that's undeclared of about $250 million a year from the years 1989 to 1992, as I show in my submission.

The curious thing about this is that the amounts that are being evaded are all the difference between the amounts that men report and women are declaring. It's all women. Curiously enough, it seem men are either, on average, overreporting their child support income or women are underreporting, at least from single fathers, so the problem in switching the child support taxation is the fact that effectively this covers up a huge amount of tax evasion. It rewards tax evasion. It encourages it. These figures essentially will disappear under the new regime.

The problem with doing this—and this is the reason the Thibaudeau case was quite important—is that in fact by changing to a system...we've moved the taxes on the average from the mother to the father because there are higher taxes in there. We are punishing those who are most faithful in paying and we're rewarding, essentially, tax evasion. The net result of this, of course, is a lot of fathers see this and they say, look, what we're being told is that we are not wanted in the family. We're not a member of the family. Women get the credits. Men get the taxes. You're not treated as actually a member of that family.

What is interesting is to look at the amount of parenting that mothers and fathers do, and there has been a slow and steady increase over the years. There are more men doing more parenting. There are more fathers at home. There are more fathers being the primary caregiver. In intact families, the level where the father does more child care is about 15%. The ratio of single fathers to single mothers, at least in 1991 according to Statistics Canada, was 22% of lone-parent families. And in fact, according to Status of Women Canada, the ratio between the child care that women do and the child care that men do is 1.86 to 1, women to men.

But in fact, if you look at the tax credits, and you consider those to be paid for child care done—and that's a debatable point—then essentially, if you look at the amounts fathers do, the amounts women do, and the amounts of tax credits coming back to fathers related to those children versus the amounts that go back to the mother, essentially the father gets about one cent for every dollar that women get for the same amount of parenting. You could also look at that as saying that fathers in intact families are completely excluded from any consideration for the parenting they do, and half of single fathers are completely excluded from any consideration within the tax system for the work they do.

Another point here that is interesting is the difference between the way the Income Tax Act does treat support for a relative outside Canada versus supporting your own children here. A father can get a tax credit for supporting his wife overseas but not in Canada. To me, it is astonishing that Parliament would actually, within the Income Tax Act, put a greater priority on support for someone outside Canada than someone within Canada.

One additional problem with the Income Tax Act is the fact that in terms of the child support in the Income Tax Act, it's specifically detailed that the amount of the child support cannot be in any way related to or demanded to be paid for expenses for the child. This is something fathers are very concerned about. If you are paying for a child and that child is at university and those payments are not going to the child, and the Income Tax Act is used as the reason those payments cannot be spent on the child, that is a problem in the Income Tax Act.

• 1845

I want to refer to section 56.1 of the Income Tax Act, page 299, the maintenance allowance. This is very complicated here, but for purposes of the Income Tax Act, it only can be defined as child support, unless that person has discretion as to the use of the amount. In other words, that money will go in most cases to the mother, and the father has absolutely no control over whether she spends that on the child or on a vacation, and the origin of that is that section of the Income Tax Act.

One of the things I did want to present to you was the possibility, looking into this, of a court challenge of this bias against fathers in the child tax credit. It seems to me that at some point this is going to be challenged on the basis of gender discrimination, because the bias is very clear in the Income Tax Act. If a father and a mother were equally sharing under shared parenting—say they were separated, and the child was spending 50% of the time with the father and 50% of the time with the mother—and the Income Tax Act says, regardless of those circumstances, the child tax credit must be paid only to the mother and you cannot share that, at some point that's going to be challenged—and, I suggest, successfully.

On the amounts involved in that, I think if it's extended to separated parents sharing parenting, it's inevitably going to be extended to intact families. If it's extended to intact families, the amounts of the claims involved are going to be substantially larger than the government's pay equity dispute.

I want to make reference to the Thibaudeau case, because the judges in that case suggested that in fact this bias—and they were dealing with tax matters—was related to, as they put it, “immutable characteristics, not because of merit,” which suggests very strongly that the Supreme Court recognizes that we are dealing with a situation where there is bias. “Immutable characteristics” can mean nothing other than gender. The bias in the Income Tax Act is built on immutable characteristics and not on merit, and I think that is an important point to consider.

One of the points I want to make is that looking at Statistics Canada income levels, unmarried men and women, all other things being equal, earn the same amount and pay the same amount of taxes. In a family, according to the Vanier Institute of the Family, that tax burden shifts so that, on average, fathers with children pay 75% of the taxes within the family and women pay 25%. Part of this is related to the differences in incomes and choices that people have, but a lot of it is in fact a distortion produced by the Income Tax Act. So people in Canada are less free; the father is less free to choose to stay home with his child even if he's the better qualified parent, because of this child tax credit linkage. In addition, a lot of other government programs are linked to this same consideration.

One of the points I did want to bring up was the fact that the Canada Pension Plan child care dropout is linked to the child tax credit recipient. In effect, this means that the father cannot apply for the Canada Pension Plan child care dropout without permission of the mother. A mother can apply without any permission whatsoever, but a father must have permission from the mother. Again, this is one of these things you cannot share that is strongly slanted towards the mother. If a mother does not want to stay home, these sorts of provisions give her less choice, as well as giving men less choice. The net result, of course, is that children effectively have far less choice.

One of the problems with the taxation system is that all of those things are tax credits that essentially can be taken with one side when the family breaks up.

In addition, on the equivalent-to-married exemption, I don't understand why, if you have a child and you're on your own, that is equivalent to being married—in our dreams; it's simply not. By any social policy, it is simply not. The Income Tax Act encourages that type of family breakup with the attendant social costs, because one side essentially can take all these tax credits with them and shift the tax burden over to the other. The government essentially makes more tax money out of this type of system, but in fact I think the social costs consume a lot of that, because they're extremely high.

• 1850

From the standpoint of fathers, at the low income levels you have major problems because the taxation is so high on fathers. Essentially they're treated as individual taxpayers.

For a father with $30,000 worth of income, supporting a first family with the child support, plus the tax at individual levels on there, if he has a new family, he would be substantially better off on welfare. In fact, the only way a lot of these fathers can actually support their children is by going into the underground economy. They have a choice: either support your children or pay your taxes. A lot of them agonize over this, but a lot of them do not have any choice. I'm not in that situation, but I sympathize with them, and I'm here simply because they don't have any voice. They don't have any way of presenting these issues, and they're very concerned about it.

I have specific recommendations, and I'm assuming that people will ask me about those. I'm not going to read them.

Thank you.

The Chairman: Thank you very much, Mr. Cheriton.

At the outset I'd like to state that you've brought an awful lot of technical terms, and in discussion with the researcher, we're going to give your brief to the legal department to analyse for exactitude. I just want you to know that beforehand. But thank you very much for your comments and your recommendations.

I'd now like to ask Mr. Forseth to begin. We'll go with 10-minute rounds, Paul.

Mr. Paul Forseth: Thank you very much for coming today, Mr. Cheriton. Certainly you've presented one of the most provocative perspectives, and watching the faces and the body language around this room, I can see that you provide a new voice or a new kind of perspective than what has been typically heard in parliamentary committees in past years.

I've found that men's groups or fathers' rights groups, or whatever you want to call them, are beginning to find their voice in this country. Certainly all groups and all perspectives should be free to speak out without being discounted before they even finish their message. I think that has happened somewhat in the past.

We've found that there's a lot of, you might say, social conflict out there that we picked up during the joint Senate-House of Commons committee that reviewed the Divorce Act. We recently submitted a report to government, and we're waiting for a government answer on that issue and a lot of the kinds of things you're talking about, how the overall rules of the game that government provide seem to militate against family life and family peace.

There's really no place for the gender war, or the name-calling, or the holier-than-thou, and all of that, which we heard from some of the presenters at that committee, and it has no place here. But it's certainly appropriate to have an open mind and to look at some of the things you're saying.

We know the existence of this subcommittee has to do with public perception. We just recently went through the exercise of filling out our income tax forms. Families on the same street talk to each other. Two fellows may both be living in Kanata and working at a computer firm, and they know what their salaries are and what kids they have; they're comparing household to household and their kids play across the driveway with each other. Yet the relative bite that the government takes at various levels is quite different between those two households, merely because of particular lifestyle choices of child care, and so on.

So we're trying to get at that issue, and we've had a variety of perspectives on how we begin to figure out how can we ever get out of this morass we're so entangled in, in going down a particular tax road.

One of the examples that have been made is that there was a social desire in the United States to get to, maybe, public medicare, but because of the historical situation they're in, they're so entangled that they just can't get out. I hope that is not the case here.

• 1855

Certainly, we'll be looking at the technical measures you made.

But I wanted to ask you about the issue of child maintenance. You were saying something to the effect that we know now that child maintenance is no longer seen as flow-through money. A payer used to not pay the tax on that money; the tax was paid by the receiver. It's no longer done that way. The payer, which is typically a father, is sending child maintenance money for his children after tax, and the receiver of that child maintenance does not have to pay any tax on it.

But you're saying that it still has to be declared in order to qualify for other benefits. Certainly, child maintenance does not have to be declared for the purposes of paying income tax, whereas, I take it, spouse maintenance still does. Maybe you could just enlighten us on that particular issue. You were talking about non-declared money and tax evasion, and I quite missed the point there.

Mr. Glen Cheriton: The problem, I think, is that under the system here a father who is paying support and has the children loses the equivalent-to-married exemption.

Mr. Paul Forseth: Let's make a distinction when we talk about paying support. We have child maintenance and spouse maintenance. What are we talking about here? Are we talking about his paying spouse maintenance?

Mr. Glen Cheriton: They may have changed it since 1997, but that's obviously the year when things came in. But at this point, 1997, it was the same thing for spousal support and child support. The overwhelming majority of support paid—and I believe that in the Thibaudeau case the Supreme Court accepted a figure of over 80%—is actually child support. They originally called it alimony. It's called maintenance in some provinces, and it's also called support.

A dollar is a dollar is a dollar. If you are paying money to support another household and you are the primary caregiver of those children, you are denied the tax credit because you are paying that dollar. It doesn't matter whether you're paying $1 or $10,000; you still lose that tax credit. Let's not lose sight of the fact that there are children who are not getting that tax credit because somebody is doing the responsible thing.

Mr. Paul Forseth: So you're saying that they lose the ability to have the equivalent-to-married exemption.

But what was the other aspect where you were saying that the receiver of child maintenance seemingly no longer has to declare the receipt of child maintenance for the purposes of paying income tax? At this point it's paid by the payer, not the receiver, and that's a recent change because of that Thibaudeau case. Where does this element of tax evasion come in?

Mr. Glen Cheriton: The tax evasion comes from the fact that there are differences between the amounts men are paying and the amounts women say they are receiving during those particular years leading up to this change in taxation, and that is undeclared income. Either men are overclaiming or women are underreporting. It's fairly easy to see the amount men are paying. They have to document these things. Generally, it has been accepted by the people I've talked to that this is in fact unreported income. So to change the tax system in a way that covers up unreported income seems to me to be essentially a slap in the face to those who are paying taxes.

Mr. Paul Forseth: You mentioned the Canada Pension Plan dropout provisions. That came up yesterday. You're saying that parents don't quite have the freedom in the privacy of their own family corporation to decide from time to time which parent will do that. You're saying that it's kind of biased one way.

Mr. Glen Cheriton: Exactly. It is linked to the recipient of the child tax credit. The Income Tax Act states that the child tax credit goes to the female parent unless she decides to send it to someone else.

Mr. Paul Forseth: Do you have the reference or the page where that can be found? You could maybe provide that a little later.

Mr. Glen Cheriton: I did provide that reference here.

• 1900

The Chairman: Does it say that it has to go to the female if she is not the custodial parent?

Mr. Glen Cheriton: It presumes that any woman in the house...or if the custody is switched, the child tax credit stays with that woman. Therefore, it has a tendency to remain with the woman regardless of whether or not the children are with her. In fact, with some fathers I know, the only way they can get their kids—and they're taking care of their kids, as the kids are living with them—is if she keeps the tax credit.

An hon. member: You're confusing me.

Mr. Glen Cheriton: I don't want to make this into a big deal, because these are small numbers. But we are dealing with people who are taking care of children, and they feel this is a real discrimination, and it is. And it's really hard on the kids. There are 170,000 single fathers, and 78,000 of those are not eligible for the equivalent-to-married exemption. To me those are large numbers. In your context they may be small numbers.

But there's a problem with the tax system unless you are fair to everybody. If you bias the thing toward unfairness and tax evasion, that amount grows. You drive out the most productive and responsible people in society, and you attract people who like that kind of lifestyle, which is irresponsible. It has a tendency to grow.

I have no doubt that if men had the same bias in favour of them, they would be the ones doing this. But because the Income Tax Act is biased against fathers, it shelters a small but very significant amount of irresponsibility.

Mr. Paul Forseth: Thank you.

I want to ask Sonya Nigam a question. On page 11 of your submission under closing remarks, you make the following statement:

That any changes to the tax and transfer system should target immediate and/or projected benefits to unpaid workers to recognize the work of unpaid dependent care of children as productive work.

Do you have an idea of exactly how that might be done?

Ms. Sonya Nigam: You could do this through a refundable tax credit. That would be an immediate kind of benefit. A projected benefit could be something like a homemaker's pension.

Mr. Paul Forseth: So how would that be done? Would someone have to declare on some kind of form that so many hours were put in looking after an infirm person or children in their house and there would have to be signatures? I don't know how that would work.

Ms. Sonya Nigam: We are not the tax experts. I think it does come back to doing more research into these matters and to really looking at them closely.

But I think on the last tax form there was already a credit for dependant care and elder care, and perhaps there could be something along those lines. It could be extended—

Mr. Paul Szabo (Mississauga South, Lib.): The difference is that's non-refundable. You have to have an income and taxes payable in order to be able to get any benefit from that. I think you're referring to a refundable—

Ms. Sonya Nigam: We're talking about it being refundable.

Mr. Paul Szabo: —tax benefit such as the child tax benefit.

Mr. Paul Forseth: I'll end it there.

The Chairman: Thank you, Mr. Forseth.

[Translation]

Mr. Cardin, please.

Mr. Serge Cardin (Sherbrooke, BQ): Madam, sir, I thank you for appearing before the committee. Thank you for your presentations as well.

I'd like to ask Mrs. Nigam a question on unpaid work. You bring forward an idea and you ask tax experts to look into the matter. Two things could happen: the government, through a fiscal policy statement, could recognize that work and support it financially through tax credits or various other similar mechanisms, or the working spouse could split their income with the other spouse in their own tax return. It would be a way to recognize unpaid work.

You are saying that tax experts should look into this matter, but you certainly have a sense of how it could be implemented in practical terms.

[English]

Ms. Sonya Nigam: We are not so much in favour of the idea of income splitting. We find it is problematic in that the benefits that may come out of it may go to the payer, to the higher-earning spouse earner. So we have some reservations in that regard.

• 1905

In terms of what exactly to do, the exact mechanism, we favour different things. We favour things that are direct payments to unpaid workers; something like the child tax benefit if that was the reason for doing the child tax benefit, because we take some issue with it. We find that it is more of an issue of increasing family incomes in order to take care of children and not really to recognize the unpaid work. We really want to see the recognition of unpaid work. We find that it is essential to moving forward in the area of gender equality.

As for the exact mechanisms, we find it is problematic. We find that we don't have all of the tools at our disposal in order to study the matter. We're not experts. We do all of our work on an unpaid basis. We don't have great library resources. We work from our homes. But we do feel that the government needs to take the time to really look into it and in a way that is fair for all families. It's so complex. We have such an array of mechanisms, as Mr. Forseth said earlier, that for us to disentangle the whole thing becomes very difficult.

[Translation]

Mr. Serge Cardin: My question is to both of you. Initially, our mandate was to study tax fairness for families. We were supposed to look into the situation of one-income families and two- income families. There is a big difference in the tax treatment both receive. That was our starting point, and we now look at the possibility of going much farther. We'll have to make some recommendations at some point in time and we can go beyond the mere area of tax equity for one-income and two-income families. Now, we are talking about all kinds of things, such as unpaid work and gender equality in the tax treatment.

We find often that individual choices are made in the family, choices which have a tax impact. Do you think that, generally, the government should make sure to close the tax gap, taking individual choices into account.

[English]

Mr. Glen Cheriton: Shall I respond to that?

In fact, the points I've made in here are areas where in effect the family does not have choice. The tax act specifically directs that the child tax credit cannot be sent to the father. It cannot be shared unless...even in cases I suppose where the woman applies directly to the minister, which is like the old Divorce Act days, when you had to apply to Parliament in order to get a divorce. This is not a real choice.

I wanted to emphasize the certain areas where in fact I think there is agreement between your submission and what I have. One thing that I think would be a major change is a joint return, a joint filing for families with dependent children.

The Chairman: Would you agree with that, Ms. Nigam?

Ms. Sonya Nigam: Again, I go back to the idea of recognizing the unpaid work. If it can be done in a fashion where the unpaid work gets recognized, and the money comes directly into the hands of the unpaid worker, they're benefited in that way, then we would be in agreement.

Mr. Glen Cheriton: Yes, thank you. I want to emphasize that I think there are areas where we can agree; for instance, putting more money in the hands of the family. I think that's it. Particularly—and I would emphasize this—if you believe that marriage is a valuable social asset in Canada, then clearly you have to eliminate the bias in the income tax system, which encourages family breakup.

This is something that I think is a major problem, because it's a major disadvantage for children. It's a major risk. The major risk that happens there is effectively the loss of the father, and it's the loss of the father, I think, in a number of ways to Canada, because these fathers are disillusioned. They're disillusioned with the justice system, they're disillusioned with the tax system, and they're disillusioned with the government, because they are told they are not wanted in the family. You're not a parent for the purposes of the tax system. They're told, as far as the research goes, they are not included.

• 1910

In the research on elder care done by Statistics Canada, all fathers were excluded. All men were excluded from that study. In the national longitudinal study on children and youth, the number of fathers was reduced to such a low level that they're statistically insignificant.

I think the other thing we could agree upon is that there is need for more research, although I would suspect we might differ on whether there is a need to rebalance the research that's been done by a whole array of ministries into women's needs, women's choices, and this area with the need that families have for men's participation. I would emphasize that you need to be prepared to tell government ministries that you can't effectively exclude fathers and men when you're studying family issues. That's effectively what has been done. You can't make policy in these areas if half the population—and they pay 75% of the taxes—are being told that is not even going to be considered.

[Translation]

The Chairman: Do you have other questions, Mr. Cardin?

Mr. Serge Cardin: Mr. Cheriton mentioned several examples in his presentation. In a previous life, I filed many income tax returns and, from time to time, I saw men who got child support and received family tax credits, child tax credits.

When the spouses no longer live together, men sometimes cannot claim all tax deductions because of some disagreements, but here generally are no problems if all is well in the family. Often, the woman receives the tax credits, but, when all is well, it does not matter which spouse receives the tax credits. In the case of a separation or a divorce, if the custodial parent is the man, he would normally receive the applicable credits. That's what I have always seen.

[English]

Mr. Glen Cheriton: Yes, this is an argument that I certainly have encountered before. The argument clearly is that if we put money into the family, it doesn't matter whether we send it to the woman or the man. Actually, the assumption is more along the line that if we send it to the woman, she is going to spend it on the kids, but if we send it to the man, who knows what will happen. The idea is that we can't split it, because of course we can't actually have both receiving this child tax credit and treat them both as parents. It would be essentially the same argument they used to have for women. We couldn't pay women the same wages as men because they were not supporting a spouse and their children, whereas men were. That was the same argument.

The Chairman: We're getting a key point here, that the child tax credit is based on family income. Therefore you have to choose one recipient, and normally they choose the lowest earner.

Mr. Glen Cheriton: That's not what the tax act says. It says the female parent.

The Chairman: For the child tax credit?

Mr. Glen Cheriton: For the child tax credit.

The Chairman: I think it's the lowest earner, isn't it? Paul, you might know it better.

Mr. Paul Szabo: You're confusing that with the child care expense deduction, which is the lower-income earner. I'll just clarify some terminology, because some things are in the tax act, and some things are outside of the tax system. In your presentation and all of this, we've been talking about a child tax credit, but there is no child tax credit. It's called a child tax benefit.

Mr. Glen Cheriton: I stand corrected.

Mr. Paul Szabo: Let's be clear on this, because I think the point we're all going to find consensus on is that there are many ways in which benefits can be delivered to families with children. Some are in the tax act, some are outside of the Income Tax Act. And the amount of the benefit varies on a whole host of assumptions.

The Chairman: Thank you. Paul is our resident accountant, so we rely on him for help.

Yes, Ms. Nigam.

Ms. Sonya Nigam: I would like to respond to Mr. Cardin's question about whether the government should make up for differences in choice. I believe it's the role of government to advance social policy in Canada and to pursue certain objectives, such as the objectives I outlined in the brief: gender equality, the well-being of children, and the balance of paid and unpaid work. And I think that the word “choice” is so loaded. The way life proceeds for families is that often it tends to just happen.

• 1915

The Chairman: Thank you.

Just for a point of clarification, Mr. Cheriton, are your tables and sources on page 2 from Revenue Canada or Statistics Canada?

Mr. Glen Cheriton: They're from the statistics department of Revenue Canada.

The Chairman: The statistics department of Revenue Canada, okay. We'll try to verify and validate those. Thank you.

[Translation]

Are you finished, Mr. Cardin?

Mr. Serge Cardin: I'd like to make one last brief comment.

Both witnesses stand essentially for gender equality, but, in all this, we should mainly stand for the best interests of the children, who need every possible resource to develop in as healthy a way as is possible.

The Chairman: Very well.

[English]

Do you want to comment on that? I think he's made an excellent point.

Mr. Glen Cheriton: Well, I certainly do.

Gender equality covers a multitude of good points and sins, shall we say. I think one of the things we will recognize—and this tax act does not recognize—is that children need both parents, and they need both parents there to be treated with respect. The tax act does not treat both parents with respect when it designates one parent as being the parent for the purposes of the tax act and the other parent as an individual.

It seems to me that the tax act predates a lot of other government initiatives. In fact, I think it has been the model for a system of barriers to keep fathers out of the area of parenting. We have made some major steps to make women feel welcome in the workplace. There's been virtually nothing done to make men feel welcome, encouraged, trained, and confident in the home. In fact, that I think is the key area. You have potential for children to be raised by models from both men and women. That's the original idea of a family. It's the original gender equality—a man and a woman. And we've gone away from that toward all other organizations, which pale in comparison to the intact family as gender equality.

The Chairman: You mean because society has changed over the past decade.

I'll let the rest of the members continue. Mrs. Redman, please.

Ms. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chairman.

Actually, Mr. Cardin made exactly the point that I was going to bring out. All of us come to this table...I mean, both of you come with a point of view, and I really respect the fact that you raised specific issues. I guess sitting at a table in a role that has been predominantly male, I have a lot of sympathy for gender equity, because one of the reasons that initiative exists is that it needs to. I don't know that this table necessarily is where we should focus that. However, I would agree with Mr. Cardin that the key of this whole issue is to look at it being child centred.

I also think it's a bit of a red herring, as much as we've looked at some of the statistics, to pit the one-earner family against the two-earner family. I truly believe that tax policy—and the government, for good public legislation—has to steer away from the social engineering aspect of it. We have to permit choice. And as the chairman said, there are all kinds of permutations and combinations of family and what makes up family today.

So I think to get into everybody's specific biases is a bit counterproductive, although I do appreciate the points that have been brought to the table.

I think dependant care is an issue, and I think it's a valid issue. I don't know that it's the issue this subcommittee is necessarily dealing with. I think when you look at child-centred choices, the lower earner may be the male or the female who stays home. I certainly have people in my neighbourhood where it's the father of the intact family who is the at-home parent.

• 1920

So I don't think we can presume that we have June and Ward Cleaver living down the street any more, as much as some of us might think that would be a good thing to have. I think there was a lot of unhappiness back in the fifties, and what we have to acknowledge is that it's not government's role to make those choices for men or for women.

One of the questions I would have to ask—and I will start with Ms. Nigam—is this. You mentioned other tools, and I think that is really important. As I've looked at this issue, I don't think that income tax alone is necessarily the tool. I think we could look at EI and flexible maternity or parental leave benefits, so it isn't necessarily the mother who gets time off. If we have some flexibility, this would be a real boon for women because they would be able to contribute to CPP and they'd have a pension at the other end, when they go back into the workforce.

I realize you said you're not the tax expert, but I'm wondering if, after you've looked at this, from your point of view, your assumption is that it should be universal.

Ms. Sonya Nigam: That the benefits be universal?

Ms. Karen Redman: Should it all be contingent on the tax bracket you're in, the amount of money you're making, or is this something that all families with children should be able to get?

Ms. Sonya Nigam: If it were to be a direct benefit, then we would say it should be universal. When you're talking about benefits related to paid employment, then those would be directly related to that paid employment.

Ms. Karen Redman: Mr. Cheriton, if you had to respond to that—and obviously it could be the male or the female, so I would invite you to continue with your point of view—would you see it as being universal, or something that could be clawed back at the higher income rate?

Mr. Glen Cheriton: My concern is primarily at the low income level. I must admit a lot of the problems I've seen.... Maybe I take a hard-nosed approach, but I figure that somebody who is making $100,000 a year can take care of themselves. The guy I'm fighting for is the guy who is making $30,000 or $35,000, who has to go to a food bank, who doesn't have enough to pay his rent or buy groceries for his kids, and who is treated as an individual taxpayer. You may think government is not making these choices, but to these guys, the government, the courts, and Revenue Canada are making these choices for them. If he were a woman, he would have more take home money.

Now, the way they look at it—and I'm going to lay the responsibility right on you people, because in fact you people set up the laws, you people hire the people in the government departments—is that you are responsible for this. There is real discrimination going on out there, and you cannot avoid that.

Ms. Karen Redman: Just to be very clear, I said I appreciated the points you brought forward and I'm saying that ought not to happen. I'm not saying it doesn't happen. We'll get verification of the things you brought to the table. But my view is it should not happen.

Mr. Glen Cheriton: I think I am looking at it from the standpoint of two different directions. One of them is the direction of looking at kids and how they grow. I am absolutely convinced that you're looking at it from the wrong direction. How do we set this up so that we're pretending this is not happening and people, in theory, have the choice, but in fact it's all linked back to some mysterious little phrase in the tax act? That's the mistake you're making.

You have to change it around and say the problem is the fact that children are not getting enough fathering. We're not training the fathers. We're not providing the support services for them. Children are desperately in need of more fathering. I think if you look at the problems in society, at the kids in prison, at school dropouts, at girls who end up being pregnant, at suicide.... There is a whole array of issues, and all of these are linked to inadequate fathering. If you pretend you're being neutral on it, you're not.

You have to switch it around and ask how we can change this so that at the very least we reinforce that. In fact, the way you can reinforce that is to bring it back so that there isn't a bias in favour of breaking up families, so that the only institution that is actually reasonably effective in having fathers in the lives of children is the intact family—marriage. And unless you reinforce that or at least redress the balance so that married families are not at a disadvantage, and fathers are not at a disadvantage....

• 1925

Ms. Karen Redman: Perhaps I can continue. Another large issue is that of farm women. I'm wondering if you have looked at all at the rural situation and if you have any comments on that.

Ms. Sonya Nigam: We had a symposium on unpaid work in October 1977, and the women farm workers were present. We know there have been some improvements in that area, but I don't have any direct comment on that at this time.

Ms. Karen Redman: As we look at the change in demographics of families, but also of the workforce, there are many more people working out of their homes, and there are many more people working part-time. Again I'm wondering if you have looked at any kind of mechanisms that would address the father or mother who is at home working at their computer terminal but also looking after the children? Would you see that as part of the acknowledgement of the value of unpaid work?

Ms. Sonya Nigam: We would hope to see some benefits there, because women who are working from their homes and have their own businesses are not eligible for any maternity benefits or any provisions related to income from employment. They're working from their homes in order to also take care of their kids and spend more time with their kids, and they don't receive any social benefits.

Ms. Karen Redman: There is one other question that was raised, and Mr. Cheriton has probably already given his answer to this.

I was on a women's trade mission to Washington about a year and a half ago, and one of the things female entrepreneurs were saying was that they would like to be able to deduct their full-time nannies as a cost of doing business, because it's part of what allows them to go out and follow their career paths. I wonder if you've looked at that as well.

Ms. Sonya Nigam: We haven't looked at that directly, but it's in direct relation to the reason women's activities in the workforce get curtailed—the high level of dependant care work they have to do. It may have been in the Moge v. Moge case where they went on at some length and really looked at the issue of women and how their incomes fall. You can work in the paid workforce and reach salaries level with men up to the point when you have children, and then the whole picture changes. That is exactly why we're looking at this issue of unpaid work. It's a gender equality issue also. It's hard to grapple with, but I don't see how you can get away from it.

I have a son and a daughter, and I know they can go out into the paid workforce and continue to earn the same amounts of money until she has kids.

The Chairman: Thank you, Mrs. Redman.

Ms. Jennings, please.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Chair.

Thank you both for your presentations. You've both raised some issues on which I have a great deal of sympathy, and some other issues I will need to reflect on.

Ms. Nigam, I have to say that when you talked about women who have managed to reach equality in the workplace in terms of salary—same work for the same pay—and as soon as they have children they begin to lose, I'm very sympathetic to that. I'll be celebrating 25 years of marriage in June, and I've always earned more money than my husband—at times double what my husband makes. In 1992 I had a daughter, and now I find I make less money than my husband. So I'm very sympathetic.

The Chairman: That's also because you're an MP.

Ms. Marlene Jennings: Exactly. Well, there you go.

The Chairman: But that's by choice, isn't it?

Ms. Marlene Jennings: Maybe because I'm a lawyer by training, I'm very curious about some of the statistics you have provided us. I understand you make the point, Mr. Cheriton, that as a non-profit organization you don't have the resources to do all of the research and that, but you may be able to answer some of these questions.

On page 1, where you talk about the married tax deduction, are you able to provide the average income of these 78,000 separated custodial fathers who pay support? I'm assuming that's alimony, not child support, because they're the custodial parents. Is that correct?

Mr. Glen Cheriton: Support for tax purposes is support. In a lot of these cases, even if you read the judgments, you can't tell whether it's child support or spousal support. I think that has been a problem in the past. Now this is becoming clearer, but it's not either alimony or child support.

• 1930

Ms. Marlene Jennings: I come from Quebec and I think I can speak about this. Mr. Cardin said the same thing. I am a lawyer, and the judgments, if there are court judgments, specify what amount is actually child support and what amount is spousal support. Now, it may be different in other provinces, but in Quebec that's been in existence since before I went into law school, and I began law school at 33 in 1983.

So I'm not aware of the system in the other provinces, but that's not the case in Quebec. That is why I'd like to know if you know the average income of the 78,000 separated custodial fathers who, according to your figures, should be able to claim the married tax deduction but are not allowed to because they pay child support. Do you have that figure?

Mr. Glen Cheriton: The short answer is no. I agree with you that the situation in Quebec is more reasonable and clearer. I have a sense of what it is because in 1994 Lloyd Axworthy did a social policy review. One of the things that came out of that—and this was a little surprising—was the incomes of single custodial fathers were somewhat lower than those of intact families.

Ms. Marlene Jennings: But how much higher are the incomes of intact families compared to single female custodial parents? That was going to be my second question. Let me get on to it. You talk about the child tax benefit and you make the point that according to HRD, the average amount paid to single mothers was 40% higher than that received by intact families, while that received by single fathers was 10% to 15% less than intact families.

I've done a few courses in statistics—and I really don't want you to take this as an attack on what you're saying, because you've raised some really valid issues—and I do know we can make figures say anything. So when I look at that, my first reaction is to ask: What's the average income of the single mothers? What's the median income of the single mothers? What's the average income of the intact families? What's the median income of the intact families? Then I would ask the same for the single fathers.

If I had those answers and they said the average income of the single mother with two children was $20,000 a year, and the intact family with two children had an average income of, say, $30,000—I'm just using hypothetical figures—and the average income of the single father was $40,000, the fact that there are differences in the percentage who receive child tax benefits—-

Mr. Paul Szabo: The benefit has absolutely nothing to do with gender.

Ms. Marlene Jennings: No, but he's tying it to gender.

Mr. Paul Szabo: I understand that.

Ms. Marlene Jennings: It has to do with income.

Mr. Paul Szabo: It's mathematics. It has nothing to do with—-

Ms. Marlene Jennings: It has to do with income, which is why I'm saying I look at that and I want to know what the incomes are.

Mr. Glen Cheriton: Your assumption right off the bat is that this has nothing to do with gender. However, one of the things I have been doing is trying to piece together statistics comparing the treatment of mothers and fathers. I think you would find it curious that even though the income of the intact family is higher, they get a higher child tax credit than the single father. Now, why would that be?

Ms. Marlene Jennings: Do you have that in statistics?

Mr. Glen Cheriton: Yes, I have those figures. They are figures from Human Resources Development.

Ms. Marlene Jennings: Can you provide them to us?

Mr. Glen Cheriton: I can provide them to you, yes.

Ms. Marlene Jennings: I'd appreciate that.

Mr. Glen Cheriton: The second point I want to make is that I'm concerned by the assumption that this is not a gender-biased system. I did get a breakdown of child support by province and by income for the tax year 1995. This was actually a breakdown for virtually all of the taxpayers in Canada. It was for 99.97% or something like that—all the machine-processed returns.

I calculated the difference between men and women, according to support payments by income, and I suspect the same thing is happening here. At the low income levels, it showed men and women were treated equally harshly. As the incomes rose, there was a greater and greater gap between the amounts men paid and the amounts women paid at the same income levels. So the differences were not small. The higher the income, the greater the advantage, essentially, for women. At incomes of $50,000 to $60,000, the amounts were eight and a half times. We're not talking about differences that have been made a big deal of, like 5% and 10%.

• 1935

Ms. Marlene Jennings: Can you provide it?

Mr. Glen Cheriton: I can provide it for you.

Ms. Marlene Jennings: Please.

Mr. Glen Cheriton: This is not just a selected study; this includes all taxpayers. The differences I've been encountering in these areas are so huge. Okay, 22% of single parents are men, but they get 1% of the child tax credits. The differences are so huge we have to look into it.

Ms. Marlene Jennings: But, Mr. Cheriton, the point I attempted to make and that my colleague Mr. Szabo attempted to make is that the child tax benefit—we're just going to talk about that—is tied to income.

Mr. Paul Szabo: Family income.

Ms. Marlene Jennings: Yes. Therefore, those with higher incomes don't receive it. So if men, as the single custodial parents, are only receiving 1% of the child tax benefits, if that figure is correct, it means they have the higher incomes. They are earning incomes where they don't get it. I don't get it, because even at an MP's salary—and I have the lower income in my family, don't forget—I don't receive it. I just receive my Quebec tax assessment on the child tax benefit that says, sorry, you aren't going to get it because your income is too high.

That means those men you were talking about who didn't receive it are at the high end. The so-called high cut-off may be too low. That may be another issue. But we're not talking about gender there or discrimination; we're talking about low-income people. If the cut-off is, I don't know, $30,000 and 95% of the single mothers are receiving it, that means they make less than that. If only 1% of the single fathers are receiving it, that means they're above the cut-off. The cut-off may be too low, but that's another issue.

The Chairman: It's $50,000 per family.

Ms. Marlene Jennings: Okay. I'm just using that as an example. So it means that if only 1% are receiving it, then their incomes are more than $50,000 a year, and 95% of the incomes of those single mothers are under $50,000. That makes a big difference in how we view at least that point you've raised.

Mr. Glen Cheriton: I would like to point out that there are some figures—the largest study to date of incomes of custodial mothers and fathers was done by Justice Canada, based on 1991 figures from the court documents. The study was on 3,129 cases they shuffled down. They discarded most of the single fathers, but from the ones who were left in there, the incomes of the custodial fathers and custodial mothers were within 10% of each other. That's from court documents.

Ms. Marlene Jennings: I'm sorry, I didn't get the point you were making.

Mr. Glen Cheriton: My point is that you are making the assumption, based on my figures, that single fathers all earn high incomes—which everybody assumes—and the overwhelming majority of single mothers all have low incomes. But in fact this study done by Justice Canada, referred to as the Finnie, Stripinis and Giliberti study, actually has tables. They divided them up into three groups: low income, medium income and high income. If you break those down into gender, which I did—I got the original data from them—by custodial fathers and custodial mothers, there is very little difference between the incomes of the custodial fathers and the incomes of the custodial mothers.

I did an interesting exercise. I took the average figures for the amounts a single father would get and added them to the incomes. Then I added the amounts an average mother receives for child support, put those back in there, and the net incomes of the mothers—obviously this is just a study; it may not be representative, and I suspect it may not be—were higher after adding in the child support than those of the single fathers. She would get, on average, $5,000 according to Revenue Canada. He would get, on average, $100.

So let us not make these assumptions. I'm suggesting perhaps you should do the research and look into it.

• 1940

The Chairman: That's what we'll do, I think. You've got a good point, and it's well taken. We'll look at the research and also at some of the statistics.

Mr. Szabo, please.

Mr. Paul Szabo: Thank you.

Thank you to both of you for your presentations.

One of the things I obviously learned is that there are a number of permutations and combinations with regard to the circumstances, the configurations, the choices, etc. It's going to be extremely difficult to find a simple solution for all, so we have to be open to a new breath.

Mr. Cheriton, I think the most striking thing Paul and I learned from you about custody and access is that both mothers and fathers have important roles to play in the lives of their children, and that if you take either one of those out of the active parenting role, it's usually the children who are the victims. So thank you for that. We understand that very, very well.

Sonya, I can tell you that the unpaid work issue is finally creeping to the surface in terms of a priority, and it's good that it was in the census. Knowing you were coming, I wanted to know more about it, so I went on the web.

If you're interested, looking at males over 15 years of age, 87% of males provided less than two hours per day of child care, 7% provided two to four hours, and only 6% provided five or more hours per day. The comparable figures for women were that 76% of women provided less than two hours a day, 7% provided two to four hours, and 17% provided five or more hours per day.

I thought the most striking figures were for the five or more hours per day, which is basically the principal caregiver, of only 6% of men and 17% of women. We understand that sometimes parental choices go with income levels, etc., so you can understand maybe the distance. But maybe the distance is too wide. It's going to take more than a tax break to fix this, we know that.

I have just two questions I would like to ask both of you. I hope they will be brief. I think we're here because somebody synthesized this whole problem down to the idea that if both parents are working, they get a child care expense deduction, and if only one parent is working, the stay-at-home parent or that family doesn't get some equivalent benefit or some sort of recognition. Does this strike you as being an item of inequity or, as some would say, discrimination?

Ms. Sonya Nigam: Yes, it does, but I'll qualify that. We are not looking to see the child care expense deduction removed. We see that as a very important part of allowing women to re-enter the workforce, so we're not looking for removal.

Mr. Paul Szabo: Very quickly on that, as you know, a deduction is worth more to a high-income earner than to a low-income earner. Of two people paying $5,000 for child care, if one has a $100,000 income, they're going to get a $2,500 refund cheque, whereas someone at the low level, below $30,000, would only get about $1,250, half the benefit. Do you think the benefit for subsidizing child care expenses should be the same for all families regardless of their level of income?

Ms. Sonya Nigam: It should be fair in relation to all families.

Mr. Paul Szabo: Okay. Mr. Cheriton.

Mr. Glen Cheriton: The problem is clearly at the low income level, which is where people are suffering. To put a blunt face on it, you have to reduce the taxes on the low-income family. This is where you have to put more effort toward having more fathers at the low income level involved with their kids.

At the high income level, frankly, I don't care about somebody who's there. Justice Canada is doing this study about incomes above $150,000 but nothing on the low income level. We have to reverse that and say let's have more family participation at the low income level.

I think these tax credits should be reserved for lower income levels. I think there should be a tax credit for those who are paying child support at the low income level and supporting another family. You have to change the tax impact at the lower level, because that's where the tax creep has primarily hit.

That's where the tax-free income that has been provided by the new child support thing benefits the upper income levels. Most of this tax-free income, the income that's been taken away at the low income levels, is not going to the children, it's not going to the women. It's going to provincial governments. That's where the problem lies.

• 1945

Mr. Paul Szabo: Okay.

My final question is basically to see if you have any problem with some principles or criteria that I've asked other witnesses about, to sense if there is...your policy direction should have some foundation of principles. I'll give them to you very briefly. There are five, and some of them are fairly general.

The first one is that our policy should be child centred and promote the best interests of the children.

The second assumption or principle is that parents are in the best position to determine what constitutes the best possible care arrangement for their children.

The third one is that our policy should provide more flexibility, options, or choices that would make it feasible for either parent to be the caregiver or to be in the paid workforce.

The fourth one is that our policy should be inclusive of all families with children.

The final one is that our policy should be fair and equitable and neither penalize nor compel specific caregiving choices.

As a flavour, does anything I've said there, any of those principles, cause you some concern, or would you have any comment?

Ms. Sonya Nigam: Speaking on behalf of Mothers Are Women, we have absolutely no problem with principles 2, 3, 4, and 5. Regarding the child-centred approach, I think the difficulty we find is that the reason women tend to be less active in paid employment is precisely because they're child-centred, because they're choosing to reduce their paid employment in order to take care of their children. So there's a choice made on an individual level. In terms of creation of policies, I think we'll have to discuss that more fully, whether they should be—

Mr. Paul Szabo: If you would like to make further submissions to the committee, you're most welcome to.

Mr. Glen Cheriton: This is a completely different world from the world I normally inhabit. I'm coming from a world where I'm dealing with fathers who are absolutely convinced that you people have set up a system to keep them out, right?

A lot of them are profoundly disillusioned by how they've been treated. So when someone says, okay.... There are all of the things I have cited, and then we come up with a bunch of principles and say, oh yes, we really want to be fair, we want to treat everybody the same.

I've made a very good case that the Income Tax Act is profoundly biased in favour of breaking up the family and one person taking away all the tax credits. While that is happening, you cannot sit here and make pious statements about these so-called principles, because in fact the fathers out there who are being discriminated against don't buy them. If you refer to a child-centred approach with the best interest of the child, these guys have dealt with judges who tell them, look, the child goes with the mother, regardless; it's in the best interest of the child. The best interest of the child is only one parent; that's essentially what the Income Tax Act says.

Mr. Paul Szabo: These principles I was referring to, though, are with regard to the tax policy, not custody.

Mr. Glen Cheriton: No, my feeling is that I think the Income Tax Act predates this. Going back to the original mother's allowance, all of these provisions in here were based on the assumption that we tax fathers and we support women—this is the Victorian idea. These predate all of the other problems. This is the engine that drives the bias in the family courts.

Mr. Paul Szabo: Do you have any comments on these from the perspective of parents or families, where we're talking about two people working together?

• 1950

Mr. Glen Cheriton: In most cases, you know, families are struggling out there to make the best choices for kids. I think, in a sense, you could say you could have more choices. I think families filing together, joint filing, would be good. Eliminating some of these things so people actually had the choice whether it was the father or the mother...a lot of these things, in principle, are good. But unless you face up to the fact that this is a biased system and that traditionally it has been used to exclude fathers from being treated as parents.... These guys do not believe that you people are treating them as parents.

Mr. Paul Szabo: Thank you for your input. I think you've made your point well.

The Chairman: Thank you, Mr. Szabo, and thank you, colleagues.

Ms. Nigam, in your recommendation three, when you say we should continue collecting the census data, what about the type of data collected right now—is it adequate or should the data collection also be modified?

Ms. Sonya Nigam: We can make a further submission on that.

The Chairman: Okay, if you wouldn't mind, please.

Ms. Sonya Nigam: Yes.

The Chairman: Thank you. I really appreciate this session. You've raised an awful lot of technical and compelling, confusing points at times, as you've seen from us. But they're extremely valid points and we will undertake with our research staff to try to clarify them also.

Feel free, both of you, if you have any other information you'd like to share with our committee, do it through the clerk and just advise us in writing if you want to add anything that you've also maybe forgotten to give us.

On behalf of the committee, on behalf of all of us, we would like to thank you for sharing these special hours with us.

We look forward to sessions next week, colleagues. Thank you very, very much.

The meeting is adjourned.