Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Issue 4 - Evidence, February 17 meeting
OTTAWA, Tuesday, February 17, 1998
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 10:00 a.m. to monitor the implementation and application of Chapter 1, An Act to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act, the Garnishment, Attachment and Pension Diversion Act, the Canada Shipping Act, and the associated Federal Child Support Guidelines.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, this is our third meeting in respect of our mandate to monitor the implementation of the child support guidelines.
Our witness this morning is Ms Betty Ann Pottruff, Q.C., who is co-chair of the Federal/Provincial/Territorial Task Force on Implementing the Child Support Guidelines. The task force has been in place for approximately two years and includes representatives from all Canadian jurisdictions.
Ms Pottruff is the director of the policy, planning and evaluation branch of the Saskatchewan Department of Justice, a post she has held for over 10 years. Before that, she was a director of the Family Law Branch of the department, and also a litigator for the Department of Justice in family and criminal law.
Welcome, and please proceed with your presentation, which we will follow with questions.
Ms Betty Ann Pottruff, Q.C. Director, Policy Planning and Evaluation Branch: Thank you for inviting me. I hope the information I provide will be of some assistance to you. I believe you all have a copy of the brief that I have prepared. I shall speak from it; however, I shall not read it. I am assuming that senators will have done that.
You have the report on various jurisdictions on implementation that was distributed this morning. I will not proceed in detail through that unless you wish to deal with certain areas.
The paper sets out the steps that the various jurisdictions have taken to implement the guidelines, and I am able to provide some further information on those steps should you desire. However, I do not presume to hold myself out as an expert on the legislation of other jurisdictions, or their implementation processes.
With regard to my role with the federal/provincial/territorial task force, my position as co-chair with that task force is to help facilitate provincial and territorial input in terms of the implementation issues that were before us with the child support guidelines. I coordinate and facilitate in that respect.
As the material provided and previous speakers have indicated, the task force meets normally twice a year. We have had regular phone calls over the last several years to try to keep on top of the developing issues and to share information.
Early on in the process involving the task force, it was realized that one of the most fundamental moves that was required was indeed the development of information. There are many choices to be made for members of the bar, the legal profession and the public regarding the child support guidelines, and the only way they can make those choices is if, in fact, we provide them with information and support. I think you will see in all the jurisdictional implementation plans that there is a very significant emphasis on information and assistance, and less so on the actual, physical or practical legal counsel provision, and that in many situations, once people are informed of their choices, they are able to settle outside the courtroom.
Most jurisdictions as well have broadly brought into place schemes that assist in resolving disputes early, and this includes Quebec's significant move towards mediation. Mediation is part of the plans of most jurisdictions, to enhance that capacity within their own process.
In terms of implementation, the fact that we have had an interjurisdictional group to help facilitate the implementation has been useful. It certainly has allowed us not to duplicate work. For example, even now with the ongoing work, videos are being produced in some of the jurisdictions on child support guidelines or on educating children about them, and the experience in one jurisdiction can then be used by another, so that we can be more effective in our use of resources, and more consistent across the country with the information we are trying to produce.
As well, we have certainly had the opportunity to learn from each other's experiences regarding, for example, the development of rules of court, and that has been quite useful. We have learned from each other's ideas about 1-800 numbers, how you facilitate public access, and how you involve the local bar associations in responding to child support guidelines. For example, Saskatchewan and Nova Scotia have agreements with their bars so that there is a very low-cost, $25 half-hour consultation on child support guidelines available through experienced family law lawyers for those who are considering making an application. There has been a great opportunity to work in a co-ordinated way and to make sure that information to citizens in an increasingly mobile society is more consistent across the jurisdictions.
We have been able to work together in providing a sounding board for the federal Department of Justice in terms of changes to the legislation, including the most current regulation changes. The federal funding has been a welcome support for the jurisdictions, most of which were facing cutbacks or restraints on resources during this period of time. For the majority of jurisdictions, that was quite significant in making sure that they had some ability to introduce new services, even though that ability was limited by budgetary constraints.
The one area of concern regarding funding has been the fact that funding is not available to support legal aid, and so, as you will see in the material, jurisdictions have either cut back on the availability of legal aid because of the cost, as B.C. has done, or have had to find additional funding for legal aid. That was one of the reasons why, in fact, it was so important for us to focus so strongly on public education and information. We have all recognized that there was funding available to support that sort of direction from the federal government, but it was not available for legal aid directly.
In fact, that is not actually a bad result for litigants because they have had opportunities to resolve disputes earlier, rather than focusing all their attention on legal counsel and results through litigation. We have tried to find other means to facilitate the provision of legal advice, such as agreements on lower fees with the bar associations.
In terms of the positive implications for family law services in the future, as you look through the report from the jurisdictions you will see that there is a great deal going on that relates much more broadly to the area of family law and not just to child support guidelines: the education that is happening with parents about divorce and separation; the education that is being implemented with regard to the effect of divorce and separation on children; and the implementation of dispute resolution processes, helping processes, for the simple cases. In fact, there are available some information support centres where people can obtain more information about what the impact of a marriage breakdown will be. Those are all systems that I think will continue after the implementation period of the child support guidelines is over, at least in some context, in most jurisdictions. Those systems will help families in resolving custody and access disputes or other family-related matters. In other words, the impact of what we have done in implementation here will be broader than simply child support guidelines, and I certainly hope that that is the case for families facing these problems.
There were some implementation concerns. Certainly, the delay in the final resolution of the wording of the bill and in its passage was creating -- and did create, and continues to create -- some difficulty for the jurisdictions, because the provinces and territories, in trying to adapt their own legislative regimes to a child support guidelines environment, were not able to make their final decisions until the final wording was known, and the implementation date was known. Since all jurisdictions have different legislative schedules and different processes by which they get legislation on the schedule, the delay has meant that the majority of jurisdictions still do not have complementary provincial or territorial legislation in place. We do in some, however, and it will increasingly come on line over the next year.
That results in some confusion for the public. If they are not familiar with the distinction between divorce and support under provincial or territorial legislation, which most of the public are not, then they are not quite sure whether this regime applies to them or not. I fear that, to a degree, some of that confusion will show up at tax time when they think that, because of the Divorce Act changes, there was some automatic change in the status of their order. If they have not pursued some further information and learned that they actually have to do something for there to be a difference in their tax treatment or in their order amount, then they will be surprised.
Most counsel are familiar with the guidelines to some extent now, but I am learning, much to my disappointment, despite several training sessions with the bar in Saskatchewan, for example, and the provision of materials to the bar, that there are still a lot of members of the bar who do not practise family law a lot, and who are still not as familiar as they should be with the guidelines. There will be an ongoing process of training and awareness with the public even yet. Although it has been almost a year since the amendments were finalized, many people still really do not quite appreciate what the impact of this legislation is on them.
There are also delays in the jurisdictions in terms of getting services going and getting the education and other information out to the public, all of which, along with the timing, has really resulted in a delay in the impact of the child support guidelines implementation. It is difficult for jurisdictions at this point to anticipate what the actual, full impact of the guidelines will be. We simply have not seen enough volume of activity. The volume has been increasing as people have become more aware over the Summer and Fall, and with the recent advertising campaigns. Also, when we start getting into tax time, I think there will be another group of people who will become more aware of these issues. I think that we will see a continued impact on the implementation over the next year.
There are some other concerns. Some obvious issues are arising with the bar, areas where the legislation is still not clear in terms of interpretation in the court. The discretionary areas of the bill -- and we expected this at the time of proclamation -- have created some concern, because clearly they require interpretation, and that interpretation only occurs over time through the development of case law.
There have been a significant number of decisions across the country dealing with various areas of the bill: special circumstances; undue hardship; what is income; what is not. Those are working towards a resolution and a more common basis of understanding. It is still too early to say whether, in fact, the development of case law in this area will be sufficient to resolve the concerns about how one should interpret these various situations. It may be that some areas require substantive amendment in the future, but I think it is too early to make a specific call on some of these.
It is not a surprise that an issue such as the 40 per cent shared-custody rule is a concern, and that people do not exactly know how to interpret it. Whenever you build into legislation areas of discretion, you know that it will take a while for that discretion to be understood commonly across the courts.
In fact, many cases are currently working their way through the Court of Appeal in Saskatchewan, but to date we have only had one Court of Appeal decision, so the process of working it through the final resolution takes time.
In terms of the guidelines themselves, and with the enforcement legislation, there are some areas where we feel that the enforcement remedies have been quite effective. That is the experience of our maintenance enforcement system in Saskatchewan. While we recognize that things such as passport withholding are an extreme measure to be used as a final resort, we, and possibly to our surprise because we are a small jurisdiction, in fact have used it on four occasions. Where it became really useful for us was in dealing with oil field workers who are now, of course, travelling around the world. They are often people who are liable for making large payments and, because they are not easily found, do not always make them. The withholding of passports has been quite effective in that respect. We have also seen that the availability of additional information on the last employer, et cetera, has been quite useful.
In terms of where we can see some potential areas of possible amendment or further clarification, such issues might be: how is income determined under the legislation; and have we fully explained all the various circumstances that are involved. From my experience in Saskatchewan, certainly one of the areas that is a problem for us is in dealing with the self-employed and farmers is whether we have correctly captured all of the capital cost issues. Right now, capital costs on land can be claimed, but not on farm equipment. You can imagine that is a problem with someone who buys a $175,000 combine. In any event, there are also jurisdictional-specific issues about income, and whether we have captured them all. That is something that we will develop over time as the case law develops, but it is perhaps an area where future amendment is required.
It is also clear that there continue to be concerns about whether we have correctly identified special circumstances, extraordinary expenses, and how are the courts interpreting those. The case law seems to be developing at a reasonable level in Saskatchewan on this aspect, but it is still not clear that we have finally resolved the case law in this area.
With respect to undue hardship, once again we know that that is a problem area in terms of its being a complex test in terms of the bar working through it and understanding it. Whether or not it is being used, and used correctly, is something we need to monitor over time.
How are the courts dealing with the shared parenting area? What is the status and criteria for assessing those cases? That is certainly something to continue to watch. There are a number of provisions in the regulations as well that deal with the sharing of information. There is discretion for the parties to agree on the level of income, but then there is still the requirement that, in fact, three years tax returns, et cetera, be shared. Certainly, some of the courts in some of the jurisdictions -- and some of the counsel -- are feeling that that is an onerous premise; that if you have parties where there is agreement as to the level of income, what is the need for all this paper? On the other hand, you must guard against people who perhaps think that they understand everything, but actually do not understand that there were investments of other kinds that they are not being told about. It is one of those issues where you must measure how much the state is prepared to be paternal about what people are entitled or required to know, versus being able to allow them to find their own level of comfort.
There is a concern still within the special circumstances awards area that some of the courts, because of the wording in the legislation, are making orders that say "You will share so much of a proportion of the special expenses when the bills are submitted" rather than setting a definite amount. Those sorts of orders are extremely difficult for the maintenance enforcement systems to enforce, and it means that the payments vary from time to time, based on what bills are submitted. Most jurisdictions have a concern that, in fact, it would be better for the courts and the parties to be aware at the time of a specified amount beyond which the parties would need to prove special circumstances, and part of that proof should be the actual amount of what those expenses are, and then everyone is dealing with a certain set amount. We are watching that, and we are concerned about it. We are already talking to the bench and the bar in Saskatchewan about that issue, and trying to have such expenses, by practise, set in a specified amount because it is, I think, in the long term, in the best interests of the parties to know what the specified amount is.
Those are primarily the concerns I would have, other than one other plea that the provinces and jurisdictions have been making for some years: In the process of obtaining Revenue Canada information, right now the parties are required to supply that sort of information, and they can obtain it on request of Revenue Canada, and a party can assign to a provincial enforcement agency the ability to demand that sort of information from another party. What we cannot do is have a provincial enforcement information agency demand that information from Revenue Canada, so we must go a circuitous route in order to get the information. It may be that, in fact, that sort of process is an extra difficulty for the parties, because as a lawyer, you make a 30-day demand to the individual, who, because most of them do not keep good tax records, then must ask for the information from Revenue Canada. If you do not get it, you harass them again in terms of "We want that information." The information then comes back and eventually is filed in court.
It might be a much speedier process if there was recognition that provincial enforcement agencies could make those demands direct to Revenue Canada for these cases, and then the parties would not have extra areas of conflict between them about the demands for information. That is one area that certainly has been pinpointed in the past by jurisdictions as being an area where support and the simplifying of the process for the parties really counts.
I was not intending to go through this broader report from jurisdictions. If you want me to go jurisdiction by jurisdiction, I can.
The Chairman: We will open the floor for questions, if that is agreeable to senators.
Senator Jessiman: When you sent in this document, called "Child Support Guidelines Implementation", you made reference to the report we received this morning. Was it sent in at the same time?
Ms Pottruff: No, it was not. Unfortunately we had to ask jurisdictions to update the information, and the federal justice department kindly agreed to put it together and translate it.
Senator Jessiman: It is difficult for us, since we do not get these documents in advance, and therefore I have not had an opportunity to read it. Anyway, we will question you on what is here.
I would like to think that you will to agree to a statement I am about to make, and if you do not agree, tell me. Would you not agree that the guidelines cannot extend the meaning of words that are already in the Divorce Act? The guidelines are passed subject to the Divorce Act, so words that are used and defined in the Divorce Act cannot be defined differently in the guidelines?
Ms Pottruff: I would say that, generally, interpretation must be taken from the act, not the regulations, but if you are setting in place a specific scheme with specific meaning to a word you can always have variations on that in regulations. It would be a "subject to" response.
Senator Jessiman: If it had the exact opposite meaning it would be beyond the jurisdiction of the guidelines; would you not agree?
Ms Pottruff: That would be up to the court to determine in interpreting it.
Senator Jessiman: You were saying that there are some cases going through the courts and there is one case that went to the Appellate Court. Are you speaking only of Saskatchewan?
Ms Pottruff: Yes. I am certainly aware of other cases across the country but I am not as familiar with them.
Senator Jessiman: Have any of them reached the appellate courts?
Ms Pottruff: I am sure some of them have. I just have not monitored them as carefully.
Senator Jessiman: None have reached the Supreme Court yet?
Ms Pottruff: Not to my knowledge.
Senator Jessiman: What is the substance of the one that got to the Appellate Court in Saskatchewan?
Ms Pottruff: I must check. I have it right here. It was not a major case. It was the Marshall v. Marshall case. They had appealed on the basis that the chamber's judge had erred in finding that his assets were not reasonably utilized to generate income, and the Court of Appeal agreed with the trial judge decision.
Senator Jessiman: Can you tell us the criteria for distributing this $50 million? How is that determined? Is it on a pro rata basis?
Ms Pottruff: It was basically agreed on a per-capita basis, although there is some special recognition for the territorial governments and the smaller jurisdictions, including P.E.I., because the per capita base was not seen as adequate to give them the level of funding needed to do the necessary implementation.
Senator Jessiman: Would that be the same for the $13.8 million?
Ms Pottruff: Generally, yes.
Senator Jessiman: You have not heard much about this measure because the end of the tax year has not arrived. When non-custodial parents who are paying under the guidelines find out that they cannot deduct it from their income, you may find there are more cases.
Ms Pottruff: I think the difficult area will be those who have old orders and think something changed because of the passage of the legislation. Those who have new orders or have varied under the new regime know the tax consequences. It is those who thought something automatic happened or never paid any attention to the available information who will be surprised.
Senator Jessiman: On page seven of your brief, it says:
That said, initial indications, at least in Saskatchewan seem generally positive and there seems to be generally almost a doubling of support amounts where parties proceeded to court.
Are you saying that if they were receiving $500 a month per child prior to the guidelines, depending on the income, they might now be getting $1,000?
Ms Pottruff: The level of awards generally in Saskatchewan was $225 or $250 a month. We actually did a case review ourselves to determine the impact of the guidelines. We had anticipated that there might be a 19 per cent increase in awards generally. What we have actually found in those cases litigated is that there has been a doubling of the award in some of them. That is not a standard response. Some orders have gone down, some have gone up, and some have stayed the same. However, it certainly points to many orders which were significantly inadequate before the guidelines.
Senator Jessiman: For the cases where payments were deductible by those contributing the money, the non-custodial parent, in effect those in a higher bracket, it amounts to a quadrupling, not a doubling, of the amount. If were you in a 50 per cent bracket and if you were getting $250 before, you would only get $125 net. Now that is doubled and you get $500, and you do not pay any tax on it. I am not saying it is wrong, but would that be the effect?
Ms Pottruff: Yes. For some of them, clearly it is a significant reality check.
Senator Jessiman: I am not saying that not being able to deduct the tax is wrong policy, only that it has been presented wrongly. It has taken about $600 million away from separated or divorced couples. That money goes to the government, which says it will help the poor, but it comes from separated couples and it means that there is just that much less available. Would you agree?
Ms Pottruff: Certainly how the tax implications would work was always an issue. The Federal/Provincial/Territorial Family Law Committee was very strong in their recommendations on guidelines in saying that if there were tax savings, these had to be ploughed back into children.
Senator Jessiman: The money is not going only to children of separated couples. It could be children of married couples who are very poor, and I am not against that. It seems to me that what we are doing here is unfair to those who are separated. We are taking money away from separated couples who are trying to look after their children and paying it to poor people, who could be married, and I think that is a responsibility of all of us.
Ms Pottruff: One of the concerns about the previous tax system was always that only families in marriage breakdown situations had this tax benefit.
Senator Jessiman: There are tax advantages to being separated.
Ms Pottruff: In fact, families still intact paying that same amount for children had no tax advantage, so there was an unfairness there, too.
Senator Cohen: Now that the guidelines are in force, what role will the task force have in the future? Would amendments come from the task force or from the advisory committee?
Ms Pottruff: The role of the task force is still to monitor and assist in implementation. There is a five-year period for the funding, and we expect the next year and one-half will continue to have high volumes of activity. As well, most jurisdictions are considering a phase two. The guidelines include a potential for recalculation systems and more involvement by provincial agencies. Most jurisdictions must sit back and consider what that means and whether there is a need for that sort of intervention. I think there will be an ongoing role for the task force over the next five years.
In terms of amendments, certainly to solve practical operating problems with the guidelines, I am sure the task force will bring some of those concerns to the attention of federal Justice's. The responsibility for reviewing policy areas of the guidelines of the Divorce Act lies with the family law committee and the advisory committee, although I am sure the task force will be consulted.
Senator Cohen: On the last page of your submission, you ask questions about the practical concern for all jurisdictions and how this change is affecting children. Could you review those questions with us and perhaps expand on a few areas of which you may have knowledge?
Ms Pottruff: Do the awards reflect a fairer level of support for children beyond necessities? Has it been fairer for children, and are there better outcomes for children? Initial indications in Saskatchewan, based on the few cases that have been litigated -- and I am nervous about making assumptions based on them because those are the hard cases -- are that the outcomes for children are better because we are seeing increases in support. However, I am not prepared to say that overall the outcome for children is better until we know whether this has promoted quicker resolution of disputes and has changed how people decide issues like custody and access and matrimonial property. We need to consult further with the bar and people involved in this process to learn the answer to that. My sense from phone calls I get from members of the public and the bar is that in fact the guidelines have lead to a high degree of settlement. Most of the phone calls I get are equally from payors and payees, and they want to know the information. Once they have the information, they tend to be fairly neutral about whether they agree with the level. It seems to be acceptable to them once they understand the process. They are actually relieved to know that someone has set some level of bar around which they can negotiate.
Are awards for children in similar circumstances similar? I would hope that they would be if in fact the courts and the bar are following the guidelines. There are still situations where, because the family law bar or the judges are not fully familiar with the legislation, errors in terms of how the orders are made. However, that is decreasing, as it should, as they become more familiar. To try to stay on top of that situation, most jurisdictions are still planning on doing additional training with the bar. I know that we certainly are in Saskatchewan.
Have the guidelines resulted in fewer children and caregiver parents being in poverty? It is too soon to tell.
Has there been an overall impact on the lifestyle of the child? Once again, it is too soon to tell. You would have to look at the overall impact of how assets get divided in the family. That is why the whole issue between matrimonial property, spousal support, and custody and access have to be examined together. Families have always had to deal with these issues. Are they now dealing with them in a way that is better for the child? We need to find out.
Senator Cohen: You said you are going on with training for members of the bar. What about training for the judges?
Ms Pottruff: Certainly, they are welcome to participate in any of the legal training sessions. Normally members of the bar participate as members of the panel. Certainly, the Canadian Judicial Centre is involved in ongoing training with the judges. In most jurisdictions, the judges have had their own specific day set aside to look at the legislation. It depends on the interest that a certain member of the judiciary has in this area, whether he or she will pay intensive attention to it.
Senator Cools: Last week we had a witness before us, a Mr. Philip Epstein, who told us that he largely regrets that the previous tax structure has been changed. In his opinion, most of the members of the bar in Toronto, or those with whom he has spoken, agree with him on that.
Can you amplify your comments on the tax structure?
Ms Pottruff: It was always possible to put the guidelines under either tax structure. It would have been a more complex formula, in my understanding, had we kept the past tax structure. There were always concerns that those tax rules were not well understood or well implemented by the majority of members of the bar and the judiciary and this was reflected in the court orders. By and large, the complexity of the tax situation was not understood and was not adequately addressed in the orders.
Tax continued to be a problem for many recipients of child support. While they were aware of the need to retain certain amounts for tax payment, in reality many of them lived in very straitened circumstances, so putting money aside each month to pay tax, rather than using it for children's clothes and food, was not a realistic option. At the end of the year, they often ended up with a big tax bill that they could not pay. That was also due in large part to the inadequacy of the awards themselves and the tax consequences of the awards being inadequately calculated into the award.
There were many problems with the past tax system. It could have been made to work, though.
Senator Cools: That is your opinion, that it could have been made to work.
Ms Pottruff: The present route is not a bad choice because it does simplify the process.
Senator Cools: I was just letting you know that, according to the witness last week, the greater number of the bar in Toronto think of it as a tax grab.
You keep referring to a delay in passing the legislation. Of what delay are you speaking?
Ms Pottruff: We had understood for some time that May 1 was being targeted for the date of implementation. In order for jurisdictions to prepare for implementation, the final bill had to be in place. We could not conclude planning on what we would say to the public about child support guidelines or on how we would implement support programs until we were certain of the legislation and certain of the implementation date.
Senator Cools: May 1 was not the date? I understood that implementation was not delayed.
Ms Pottruff: Yes, but if we do not know until the end of February that May 1 is the date, that is not sufficient time for jurisdictions to hire staff, provide publications and correct our legislation.
Senator Cools: When could you have known before the passage of the bill? The bill took six weeks to pass.
Ms Pottruff: I am not questioning the process or the time that it took. That is the process.
Senator Cools: Were there delays in some parts of the country regarding the date of May 1? I understood that the date went off swimmingly well.
Ms Pottruff: It went off better than we had hoped, but "swimmingly well" may be a little advanced of where we were.
Senator Cools: At page seven you say that withholding passports has been effective. Can you tell me how many passports have been withheld? Why is it effective and how has it worked?
Ms Pottruff: I only know about the jurisdiction of Saskatchewan. I understand we have applied in four cases. We had tried all other remedies and they were not successful. The indication was made to have the passport withdrawn. Either the actual application or the threat to do that was sufficient to have the payments come in.
Senator Cools: At page eight, you say there are a range of court decisions across the country which have begun to address these issues in a principled way. Could you give us a list of those decisions?
Ms Pottruff: I only have a list of the Saskatchewan decisions. There are other national compilations around. I am sure, with my colleagues from the Department of justice, we can get those for you. I can give you a list of the Saskatchewan decisions. They are in an appendix to a paper.
Senator Cools: I am only asking you for the Saskatchewan cases.
At page nine, you propose that you should look at other processes -- and I do not agree -- such as the option of allowing parties direct access to Revenue Canada information. How would you reconcile the enormous constitutional questions involved in this proposal? So many of the on-the-ground issues here are governed provincially and Revenue Canada is a federal body.
Ms Pottruff: I do not foresee it as being a constitutional problem. The Revenue Canada legislation simply needs to recognize a certain class of applicant for information. They now recognize that you as an individual can ask for access to your records. We are suggesting that they could recognize another class of applicant, which would be a provincial enforcement agency, for a very specific and limited purpose. Obviously you do not want to interfere broadly with the privacy rights of individuals.
Senator Cools: Mr. Chairman, in 1984 and 1985 when Mr. Crosbie had his bill before us, the Privacy Commissioner and many senators expressed anxiety about those proposals which were weaker than those coming forward now. There was enormous anxiety about opening the door to Revenue Canada at all. Now the door has gone from slightly ajar to a cavernous opening. At some point we should review the movement of this issue from 1984 to the present. We are now hearing a proposal that an independent assessor be allowed to approach Revenue Canada direct. I propose that we look at that aspect on its own as an issue, to see how this phenomenon has developed over the last 12 years.
Senator LeBreton: My first question has been answered. It had to do with the role of the task force from this point forward.
My second question relates specifically to page 8 of your brief. In your overview, you spoke of jurisdictional-specific issues. Saskatchewan is probably a good example. Per capita, Saskatchewan has a large number of farmers and self-employed business people. You used the example of a farmer buying a combine. From that, I assumed that you meant that buying the combine would lower that person's income, and thus they would not be eligible for such large payments. However, if a farmer buys a combine for suspect reasons, who determines whether, indeed, that is the case? Perhaps the combine was purchased to allow that farmer to sustain a profitable enterprise.
In your paper, you talk about this particular group, farmers and the self-employed -- that is people who do not have regular pay cheques, and therefore their incomes are not as easily accessible. You say that this is a potential problem. What amendments might you consider to deal with this specific area of farmers and small business people?
Ms Pottruff: I am not prepared to suggest specific amendments at this point; rather, I am voicing a concern that perhaps we have not thought this system through thoroughly enough. I hear from colleagues a concern about the capital cost recognition only being on land, and not on equipment. However, I am sure that that is not the only category where we have problems in terms of the self-employed, and what is a reasonable deduction or expense from the business enterprise and what is not.
Ultimately, in terms of what will be accepted, the decision belongs to the courts. That is as it should be because each situation is unique. Yes, you could have someone hide assets by buying a combine, but you could also have an individual who legitimately needs to buy a new combine to get on with their business. I think the issue is whether our present categories are too narrow or too broad, but we will learn about that over time as more cases go before the courts for determination.
Senator LeBreton: That is very true. It will take quite a few court decisions to determine the case law in this regard. Have you had enough of these kinds of cases so far to enable you to make a judgement?
Ms Pottruff: We had a couple of situations where these issues were raised, but they are presently working their way up to the Court of Appeal.
Senator LeBreton: I wish to follow up on Senator Cools' question about Revenue Canada. That jumped off the page at me as well. Would such a move stand up to a challenge under the charter, or under our privacy laws? Has your task force looked at it from that perspective?
Ms Pottruff: No, but we point that out as an example. If we want to simplify the process further, this is one thing that would simplify the process. It has not been analyzed from the legal point of view, in terms of the various changes. The reality is that we are asking parties to do indirectly what could be done quite directly.
One concerns is not just the delay and the difficulty parties have in terms of obtaining the information; there is also a potential for dispute and harassment between the parties if the legislation is set up in such a way that one party must ask the other party for income information on an annual basis. The situation might be defused if an independent agency could make that request on an annual basis and obtain particulars of the income tax return. That agency could then say that there had been no change in income, and therefore there is no need to go forward with a variation. Those are the background concerns: simplicity, and the need to defuse the potential for conflict.
Senator LeBreton: I agree with my colleague Senator Cools. I worked for a famous individual from Saskatchewan, John Diefenbaker, when the social insurance number was instituted. He predicted then that these things would happen -- that people would no longer have identities, would no longer have privacy and would no longer have a name. He predicted that they would all be known by a number.
I am very fearful that that might indeed be the case, and I think everyone should be concerned. We see examples of it every day. The more people who have access to people's private information, such as that lodged with Revenue Canada, the more the information will be shared with others. That is a very dangerous road to follow.
Ms Pottruff: Certainly there is a need to be very conscious of the privacy aspect. I do not dispute that at all. One of the options is that access is allowed only with the person's consent. Right now, given the way the legislation is drafted, that would not be allowed. With consent, perhaps it would be appropriate.
Senator Cools: I did not want to raise the example of Mr. Diefenbaker, but I am so pleased that Senator LeBreton did so.
To repeat and re-emphasize what I said a few minutes ago, the proposal before us is not for the parties to find out from each other; the proposal before us relates to access to that information by independent people outside of the couple in a marriage. It refers to independent assessors. It is quite a novel proposal, and I submit to this committee that we study it very carefully. The fact that two individuals are in a dispute is no justification for the government to open up its Revenue Canada files to independent people.
The Chairman: I think what is being suggested is that the provincial enforcement agency have access.
Senator Cools: It amounts to the same problem. I am suggesting that we look carefully at the principle.
The Chairman: I quite agree. We have a dozen more hearings on the child support guidelines. As further witnesses appear before the committee, the suggestion we heard this morning is something we might compare with subsequent testimony.
Senator Lavoie-Roux: My question relates to access to the files of Revenue Canada. I believe Quebec's legislation is such that accessing information held by Quebec's revenue department is not possible. I do not know why all of a sudden we would open up this area.
Senator Forest: Our sister province has done some good things in this area. When we heard the pros and cons of the proposed legislation, there was a lot of talk about the guidelines decreasing the amount of litigation because decisions would be made with respect to the level of support. We hear now that, in order to become case law, we must wait until the cases work their way through the judicial system, which is understandable with new legislation.
You mentioned that more cases are being settled. Are you surprised at the amount of litigation being undertaken?
Ms Pottruff: No. We anticipated that the first two years after the guideline implementation would be significant in terms of the number of situations that came back for review in the courts. However, we always anticipated that the vast majority of situations would settle outside of the courts. It is still my belief that that is what is happening.
Senator Forest: You believe that there is an increase in the number of cases being settled outside the judicial system?
Ms Pottruff: Yes.
Senator Forest: Is there data to support that belief?
Ms Pottruff: No. That is why we need to continue the monitoring. My discussions with counsel would lead me to believe that that is the situation.
Senator Forest: Many of us were hopeful that this would result in more mediation being undertaken by the parties involved and that, with guidelines in place, there would be less room for confrontation and a better climate for mediation. Have you any indication of what is happening in that area yet?
Ms Pottruff: Once again, it is too early to say with a great deal of certainty. With the process of public education and family information centres that Saskatchewan and other jurisdictions have used, there is a reduction in those issues in dispute. That probably flows over to the mediation area and other issues, but it requires study.
Senator Forest: To return to Senator Cools' question with respect to delays, at the outset we had a deadline for the legislation passing through at the end of the year, and it was not done for six weeks. Is that what you are indicating was the cause of the delay?
Ms Pottruff: That is part of it. It is a process of implementation. I am not questioning the process that resulted, but the practical implication is that jurisdictions were not as ready for implementation as we would like them to have been.
Senator Cools: Well, six weeks is nothing. When we had the divorce bill before us last time, we had it for six months to one year, so that six weeks is nothing in the life of a bill. I thought it went through fairly quickly.
Senator Jessiman: I am sure you are familiar with the Manitoba Civil Justice Review Task Force Report of 1996.
Ms Pottruff: No, but I may be familiar with something in it.
Senator Jessiman: One of their recommendations in respect to the Court of Queen's Bench, Family Division, is that the task force is of the view that the parent education program for the sake of children is vital. The task force recommends that it be continued as an ongoing program, and that the program be made a mandatory requirement before proceeding with litigation. What would your views be on that kind of recommendation?
Ms Pottruff: As part of the child support process, most jurisdictions have looked at parent education, and including that in the process. In Saskatchewan, we have considered the matter of mandatory parent education classes. When we did a review and evaluation of our family law division, that matter was raised. At one point, it was a recommendation from the evaluation report that was carried out. The bar was not as convinced that a mandatory requirement would receive the cooperation that you need from people to participate. Some of the U.S. studies would say differently. I think it is a coming trend. Over the next 10 years, we will probably see mandatory parent education in most jurisdictions
Senator Jessiman: I do not think they have it Manitoba.
Ms Pottruff: They have expanded it in Manitoba.
Senator Jessiman: Yes, they have. Could you give us your thoughts on conciliation and mediation -- that is, mediation within the government and outside mediation?
Ms Pottruff: I think it is terribly important that we have both conciliation and mediation services available to parties in any range of family disputes. Clearly, forcing the individuals to go through a litigation process often hardens attitudes, and does not help build an environment wherein they can continue to work together, which is often the situation where children are concerned. In other words, they must continue to work with their situations as a family unit, over time.
In terms of conciliation, for example, the child support guidelines offer the opportunity for the existence of a provincial reassessment agency. If that process is followed, that may be an opportunity for the parties to look at how they reach a settlement, based on the information they have from that independent agency.
Mediation is there to look at situations where there are broader issues to resolve between the parties. It is not just a fact finding situation, which is what conciliation might deal with. The mediation process needs to deal with the whole spectrum of attitude and values of the parties, with a view to attempting to build a better relationship in terms of the issues that they must deal with on an ongoing basis, particularly on custody and access.
Senator Cohen: I was interested in your brief comments on the jurisdictional cooperation between different provinces, and the advantages. Perhaps you might explain further about the relationship between Nova Scotia and Saskatchewan that you briefly touched on about the 25-minute interval. I did not quite follow it all, but it sounded interesting.
Ms Pottruff: It is not only Nova Scotia and Saskatchewan that have pursued this avenue. I believe that Ontario has, too, but it is not noted in their update.
When looking at the issue of child support guidelines and the ability of people to obtain legal advice, we recognized that Saskatchewan has provided more money to our legal aid system. However, there are always that group of individuals who are the working poor or lower income individuals who do not qualify for legal aid. For them, the payment of legal bills is more of a barrier to moving forward than it is to other individuals, although legal costs are always a barrier. We approached the local bar association in Saskatchewan and enequired of them, "How will we deal with this issue? They are your clients. You have a relationship with them. They have a need. The reputation of the bar and the legal system is at issue here." They were very agreeable and concerned that we needed to provide some mechanism that would help people to make choices. They agreed that for the first half hour of any consultation, a minimum fee of $25 would be charged, but many of them do not even charge that. Nova Scotia arranged a similar relationship with their bar, and I believe that Ontario had a similar situation with their bar.
[Translation]
Senator Ferretti Barth: You know that in Quebec, family mediation is mandatory. The Divorce Act is federal and the other laws are provincial. The Richardson report proves that 67 per cent of cases were settled through mediation. We are looking for solutions right and left. Why aren't we looking at other provinces that are at the forefront? In Quebec, it works very well.
Senator Lavoie-Roux: But it was implemented only recently.
Senator Ferretti Barth: The committee that looked at the impact of the five mandatory mediation sessions before a divorce warned that the results are terrible. Many cases are resolved by mutual agreement. We should examine a little more carefully the situation in the provinces where an approach that is beneficial to both parties has been adopted. Divorce cases can be resolved without going to court and without resorting to lawyers whose services are very expensive. People have the opportunity to talk to each other and to explain what is wrong. Mediation and conciliation is a service that is required and that provinces must provide.
[English]
Ms Pottruff: I certainly agree that mediation is a strong tool to put in the kit of how you resolve family issues, and that it should be there. Whether it is there on a mandatory basis or on a voluntary basis is a good issue for debate.
Saskatchewan did have in place a process of mandatory screening and orientation to mediation. When we implemented the family law division in 1994, we implemented that process. That meant that both parties had to come in separately to meet with the mediator, who would explain the process. The parties could figure out whether it was good for them. If they wished, they could access either Saskatchewan Department of Justice mediation services or private mediation services.
The bar felt that that was an intrusion into their area, because the Divorce Act already requires them to advise clients about mediation possibilities. We also found it was an overlap with the parent education process, which also talked about mediation. Therefore, we withdrew that regulation.
In addition, the uptake on mediation coming through the mandatory orientation and screening process was not significantly higher than we already had, which was a fairly good level of mediation. Therefore, the issue is really one of assessing the situation in terms of whether there needs to be more of an educational approach to try to stream people into mediation voluntarily, and how we coordinate with the bar on that.
We must also look at how the different jurisdictions process cases. In Saskatchewan, a pre-trial is required on any family matter before it can go to trial. This means that the parties must meet with a judge, who goes through the facts in dispute and tells them what he thinks would happen. The majority of cases do not proceed beyond that point. Probably less than 10 per cent of cases are fully litigated in the end. You would need to look at the whole mix of services in a jurisdiction in order to determine where you might want to increase the emphasis on the non-litigation approach, but I think that, by and large, all jurisdictions are supportive of doing more in the non-litigation approach and are quite admiring of Quebec's example.
Senator Cools: We frequently hear that less than 10 per cent of cases are actually litigated. Could you expand on that? My understanding of that statement is that less than 10 per cent actually come to trial because most have fallen off in the interim, largely due to the enormous legal costs. Therefore, the fact is that many of these individuals cannot proceed to trial because they are financially exhausted.
I submit that for the average person, $50,000 is a great deal of money. I would like you to expand on that. As I study the issue, this 10 per cent is not a true number. It measures those who are actually able to sustain a long battle, both financially and emotionally, but it does not measure satisfaction at all.
This issue comes up again and again, Mr. Chairman, yet all the literature that we read, such as the document which Senator Jessiman just cited, the Manitoba Civil Justice Review 1996, and the equivalent document here in Ontario, the Ontario Civil Justice Review 1995, make repeated mention of the high legal costs, and the fact that people are forced to settle because they cannot afford to continue. Therefore, it is not really a sufficient explanation to say that so few cases actually are litigated. The fact is that people burn out, financially and emotionally. Sooner or later we must deal with this situation because there are many people accepting settlements they do not really want.
Perhaps you could expand on this figure of less than 10 per cent, and tell us the actual number that do reach trial?
Ms Pottruff: I can only give you the estimate of 10 per cent, because that is what it is. You are quite right: I am talking about those who actually go through full trial and litigation. There is no doubt that the costs of legal proceedings would be a barrier to proceeding for any of us, in terms of whether we are prepared to expend that emotional and financial energy. While that is a difficulty, clearly the existence of civil legal aid processes does remedy it for some litigants, but only for some.
The costs should be a concern to us all because, to the degree that a justice system is inaccessible, it is not effective. On the other hand, it can be that the costs of litigation make people think quite seriously about their boundaries, and actually encourage settlement in some cases. It is not a fully negative situation, in my view.
Nevertheless, I think that the studies on mediation and conciliation would show that people are generally more satisfied when they go through those processes and have control over the decision-making process, rather than having a decision made by a judge where it is taken out of their hands. That is a normal human reaction, and quite positive. I think it is for that reason that all jurisdictions do recognize the need to focus more attention on the non-litigation processes; the ones that people feel satisfy their needs more.
Senator Cools: There are large numbers of people who go through divorces and never go into litigation at all. That is one group of people and, quite frankly, they are usually the wiser ones. The group of people at which we must look is that group who go down the road of litigation and are compelled to stop, for any reason. What is the actual number of that group of people?
Ms Pottruff: I cannot give you an estimate of that because there are so many factors at play in terms of how a dispute gets resolved. I cannot give you a number on that.
Senator Forest: You mention, on page 9, the undue hardship test. Many of us have been concerned about how and whether that would work. You may say that it is too soon to tell, but what is the experience so far on that?
Ms Pottruff: That is one area in which counsel has had a little more difficulty in understanding the process and applying it. There have been a number of software programs developed to help people deal with the guideline application issues. Those software applications are particularly helpful in dealing with the undue hardship test so that interested parties can have a process for determining the relative standards of living in the families and the tax consequences. I think that is part of what makes it a little more complicated, but once they are familiar with the software package, it becomes a less complicated area and they can then switch back to the real decision, which is whether there was a factor in this relationship that created an undue hardship in terms of the guidelines. As you will recall, it is a two step process. First, you must find undue hardship, and then you must find that there would be a lower standard of living in the payer family. For a while, people were struggling with how to determine what is "a lower standard of living." The software programs help solve that problem, and now people can concentrate a little more on whether the undue hardship test, and understanding it, works. The cases seem to be dealing with it.
Senator Forest: Do you have any indication of whether it is being used in an expansive way?
Ms Pottruff: I do not believe it is being used in an expansive way at all. The courts are very much controlling the use of the undue hardship test.
Senator Lavoie-Roux: I wish to remark on something that we could look at later when we discuss recommendations we might make. Everyone agrees that mediation decreases hostility and helps people to see things clearly. We are all for that. However, there is one basic missing. I can only speak for Quebec, although I am sure it is the same in other provinces. In Quebec, because of the severe cuts in social services, we have more or less abolished family counselling. Before addressing the problems of hardship and difficulties one must first address divorce and separation. Child welfare services have not been cut because to do so would have scandalized everyone. However, adults services are probably judged as not being as important. Perhaps the government should re-think this approach, in order to prevent break-ups. In other provinces, as you might know, the area of services to families no longer exists. I should like to know how you feel about this.
Ms Pottruff: Family services, or service to families, is obviously one where needs are almost a bottomless pit of what could, and should, be done for families. The issue is at what level can we provide those services, or can individuals afford to pay for them.
The service mix is richer in some jurisdictions. Coming from Saskatchewan, I look at British Columbia's Family Centres with some envy. They are a good combination of counselling, mediation and information services for families. We certainly do not have that type of extensive system in Saskatchewan. We have private agencies providing counselling. We do not have government-funded family counselling separate from the child welfare area.
However, the answer is yes, there are needs for families there. What the state's role is, and what the role of the individual family in trying to find services to access is deserving of further attention. I assume it will get that attention through processes such as the Special Joint Committee on Custody and Access.
Certain jurisdictions are also looking at the range of services that need to be available to families. The Federal-Provincial-Territorial Family Law Committee, for example, has a project to determine what the best model possible would be. Not that we could all afford to do that, and not that the state would always pay for it, but what should it encourage.
Senator LeBreton: Referring now to the status report that was handed out this morning, in the area of enforcement issues, Manitoba says they are looking at ways to support orders to simplify and standardize; Alberta is working with Justice Canada to implement enhanced enforcement measures; New Brunswick has a feasibility study on replacing its bookkeeping and enforcement system; Newfoundland and Labrador are working with justice; and Prince Edward Island is looking at technology for allowing better enforcement.
For the Province of Saskatchewan, you make some very definitive statements, such as:
While the impact of the guidelines is just beginning to make itself felt, it is expected that the workload at Maintenance Enforcement will increase by 20 per cent and the default rate will rise from its current level of 24 per cent.
It also speaks about workload demands, on page 33. That is rather curious. You talk about specific workload increases, and an increase in the default rate at this very early stage, when in fact you told us that it was still too early to tell. I am curious as to how you came up with those figures on the enforcement issues?
Ms Pottruff: In terms of doing our implementation planning, when we look at the need to re-register orders, new notices must be sent to individuals about their new level of payment. They can expect that there will be some increased default because of this new activity. People used to pay at a certain level, and they now must be persuaded to pay at the new level. Some of the enforcement processes may need to be reinvigorated.
This is an implementation issue. It is not something that is expected to go on after the first two years. However, during that period of time there will be increased workload for the maintenance enforcement services. Looking at the numbers is really a matter of monitoring activity from September through December, in terms of where we may be going. It is useful for us from a tracking point of view as to whether or not this was an impact that was felt. You may find we have over-projected.
Senator LeBreton: You say this is a short-term measure. What have you built into your system? Will you check it every three or six months? What is your guide post to see if these projections are accurate?
Ms Pottruff: We write reports to Treasury Board every three to six months. That will be our major check and balance.
The Chairman: It remains only for me to thank Ms Pottruff for coming here today, and for her testimony which we are all agreed has shed some light on some very important issues.
The committee adjourned.