Proceedings of the Standing Senate Committee on
Social Affairs,
Science and Technology
Issue 6 - Evidence - March 17, 1998
OTTAWA, Tuesday, March 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, to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act, the Garnishment, Attachment and Pension Diversion Act and the Canada Shipping Act and the associated Federal Child Support Guidelines.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: Senators, this morning we will continue our study of the mandate given to us by the Senate to monitor the Federal Child Support Guidelines.
Our first witness this morning is Mr. Barry R. Gardiner, FCA, a chartered accountant from Edmonton. He is one of the developers of a software program called ChildView which is used by the governments of British Columbia, Alberta, Saskatchewan and Prince Edward Island, and by family law lawyers in those provinces, to assist in the application of the child support guidelines. He has had extensive experience in litigation support in family law matters. Mr. Gardiner has recently completed a study of 2,800 files related to child support applications in the Alberta court system between May 1, 1997, and December 31, 1997. Through the study of actual cases Mr. Gardiner will be able to provide for the committee an idea of how the guidelines are working in practice.
Welcome, Mr. Gardiner. I presume you have an opening statement to make, after which senators may have questions.
Mr. Barry R. Gardiner, FCA, Chartered Accountant: Thank you for allowing me the opportunity to speak to you today.
I have a different perspective of the guidelines than most of the witnesses who appear before you may have. My perspective is one of implementation of the guidelines as well as provision of services.
As the Chairman said, I am a practising chartered accountant. One of the areas I have specialized in for the past 18 years is litigation support, particularly in the area of matrimonial property and support issues -- both child and spousal support. For those reasons, my firm has needed software to assist us in determining after-tax effects of spousal and child support prior to May 1, 1997, when both of those receipts were included as income.
With the advent of the guidelines we realized that we would have to change our software substantially. In the course of reviewing the early drafts of the guidelines or the regulations to the Divorce Act I realized that it would not be as simple as looking up a table amount based on the number of children in a province, that it would become very complicated to laymen in the special expense area, particularly those three which have tax effects, as well as the standard of living test, which is very much driven by income tax.
Because of my interest in the litigation area I felt I needed to have a very good grasp and in-depth knowledge of the guidelines and the arithmetic in them. I was also interested in how the court system would be able to make these calculations and determinations.
Therefore, although the software for many years had been used only in-house, my partner and I decided that we would develop it for external use and we got into the software publishing business. We then realized how complicated it would be because each province has different forms and different processes, not for the calculation of the guidelines but for how the information is provided to the court system. In some jurisdictions the judges have computers and other technology to assist them whereas in other jurisdictions they do not.
My other perspective is that of provision of services. The software is also available to lawyers and parents, and I have used it in my practice in mediation, particularly when assisting couples in determining a fair amount of support based on the guidelines.
My personal views on the guidelines are positive in most respects. Perhaps accountants are like this, but I do like some consistency in application. I appreciate the attempt to provide what I term a "section 3," which is the table amount threshold. When couples are dealing with how to provide support for their children and what is expected of them the section 3 amount, which is the table amount, provides a base from which they should start.
From an accountant's perspective, I very much appreciate the removal of the budget-based arguments, which was the old method of determination of child support under which the children's costs were to be isolated and identified. There was then a tax consideration, gross-up, and things like that, which added a complexity to the process because most of the arguments focused on very minor amounts as to which child expenses were valid and which were not. The budget process also allowed for inflated budgets and, in many cases, the budgets were understated. The removal of that old method should significantly reduce legal costs for couples.
In some cases, I do appreciate the tax-free nature of receipt of child support. It has positive benefits to many recipients. In my practical experience, many recipients have told me that they would spend all the child support they received prior to each May 1 and every April they would find out how much tax they owed. That would cause them financial difficulties through the balance of the year with Revenue Canada attempting to collect the tax. The tax-free aspect allows people who cannot budget for income tax or pay instalments to spend everything they receive.
The guidelines also provide a focus on resolution because it narrows the issue substantially down to income, the number of children and the table amount.
There are a couple of negative aspects to the guidelines. One of them, again from a chartered accountant's perspective, is the loss of the tax planning opportunities that existed when there were payers and recipients in different marginal tax brackets. In the past, if the payer had a very high income and the recipient had a very low income, there were some tax planning opportunities which have now been removed. Those opportunities still exist, however, in the area of spousal support.
The other negative aspect, which I believe will be overcome in time, is in education and training. It will take some time for the bench, the bar and the parents to grasp how the guidelines operate outside of the table amounts.
In my brief I make a number of suggestions and I have others which I did not put in print. I suggest that the standard of living test in the undue hardship area is extremely complicated. It is seldom understood at this point by many people. As an accountant, I would prefer that consideration be given to reducing the standard of living test to some measure on cash flow rather than a ratio. At this time the standard of living test, which is under Schedule II of the guidelines, gets you to an absolute value of two numbers: 1.38 and 1.79.
Although I understand what those measures attempt to do I think that people commonly deal with how well off they are by how much they have in the bank at the end of the month. In my view, the determination should be driven by what cash flow you have after meeting all of your obligations rather than by a ratio. That is very simple to do because the Standards of Living Test actually reduces a person's guideline income and deducts income tax and child support. It is an attempt at cash flow analysis but it does not complete the whole analysis required.
In my travels across Canada, both in training and in meeting with provincial governments to assist them in the implementation of this, I have been told by some of the judges that there was little support in the early days of the guidelines in terms of technology, computers, software, or even staff support in many cases. I expect that will change over time because the provinces have been provided with an allotment of funding to assist in the implementation. Certainly one of the areas in which they should use those funds, in my view, is to train the judges and the various clerks in the courts.
In the area of special expenses, I have the following observation: As you know, there are six special expenses which are provided for in the guidelines. Three of them are major events in a family's life, whether they remain together in a traditional family unit or are divided. Those three major expenses which occur generally are child care expenses, major medical expenses and post-secondary educational costs. Those three special expenses all have tax preferences related to them and might be viewed by many families as necessities. Child care expenses are definite necessities to allow one of the spouses to earn income. Major medical expenses, which should not be denied children, and post-secondary educational costs, which generally relate to universities and colleges for older children, are the most important of the special expenses.
I would suggest removal of the other three because they are not, in my view, necessities.One is medical-dental premiums, which are necessary but are very small amounts of money. Primary school expenses and extra-curricular activities expenses are discretionary. I believe that those costs are discretionary on the part of the parents. In some cases they may certainly be necessary but I think that on the whole they are discretionary.
What I would suggest is that the special expenses, being child care, major medical and post-secondary, remain as they are and the removal of medical-dental premiums, primary school costs and extra-curricular activities expenses, to be replaced by a higher table amount for those three. In other words, if you remove some special expenses the table amounts could be increased somewhat to cover them, so that the arguments that I suspect are happening across Canada about riding lessons, golf lessons or piano lessons and school field trips and so on would be removed as issues and the table amounts would be increased to anticipate that those costs at various income levels in fact do occur.
My fourth comment is that shared parenting is a unique arrangement. In my practical experience I have assisted many mothers and fathers in dealing with the cost of a shared parenting arrangement. Those parents generally are very cooperative. In other words, they can sit in the room with one another and someone like myself. They tend to come to an agreement on financial matters and all other aspects of their children's lives. It is not a difficult process for sharing parents to deal with financial issues as well as access and custody. They are very cooperative. I do not think you can create a formula for these parents. In other words, the guidelines provide for, in section 9, a process for shared parenting financial arrangements. You will find that most sharing parents can come to agreement on most issues and so it is not necessary to create a formula for these people.
I mentioned as well the education and training of judges and lawyers. They do not understand certain of the more complicated areas of the guidelines at the present time. I think in due course, when there is case precedence and further training, they will come to understand it. The lawyers and judges, in my view, do not understand the impact of spousal support as spousal support affects the guideline result, particularly section 7.
There are also the spousal support consequences. If you receive it you lose other benefits that relate to the children. For example, the child tax benefit would drop, GST credits would drop and other provincial subsidies, which are based on income, are reduced as you add to a person's taxable income. Eventually the lawyers and judges will come to understand the impact of the relationship and the dynamics between child support and spousal support.
Although this is not a practical matter in my practice, since I have become a software publisher, I think there is a need for consistent standards for software publishers. There are four programs in Canada presently. One of them is in Quebec and only in Quebec. There are three that have been developed for use outside Quebec: ChildView, of which I am an author and co-author, Divorce Mate and Support Works. One of the difficulties with software is that, depending upon how it is written, you will get different results with the same input. As a practising CA I am familiar with how the Income Tax Act works. We use software in my public accounting practice to prepare tax returns and I know that if I use one type of software package and then another type I will get the same answers. This is what I would expect. What you will find in the software side of the child support guidelines is that you will get different answers and that is because of different interpretations. Unfortunately, this will provide different results for the same situation, which troubles me because of my experience with the Income Tax Act.
At the present time, in Alberta, I am involved in a case with a justice of the Queen's Bench who is asking these questions: Who will monitor the software? Why should it be monitored? Why should we allow for different results based on the same factual input? How will the courts accept this type of electronic evidence? In other words, if there is an application in court must I go there on each and every occasion to give evidence to explain how the guidelines work through a computer program or should the court eventually take judicial notice that this software provides a result which is expected? Unfortunately, software can change every day because the authors of it can change certain of the source codes and you can get a different result from what you had yesterday. That is troublesome for me because I do think that the guidelines require, to be done properly, computer software to assist in coming to a result.
All four of the software publishers have been invited and requested by the Department of Justice here in Ottawa to submit their programs for review so the Department of Justice can look for consistency for standardization and for use of the same parameters, so there is a dialogue taking place at the present time with the Department of Justice to ensure that there is some standardization as to the outcomes for the various software packages.
Those are my general comments. I believe you were all provided with a copy of a database that I had done. I am not a trained statistician or a social scientist so I do not necessarily comment on what it tells me. There are some parts of the database which did surprise me personally, particularly who the applicants are, the nature of family sizes, the difference between those applications that went through under the Divorce Act, those for married persons as compared with provincial legislation for non-married couples.
If you have any questions regarding my comments or the database I would be pleased to answer them now.
The Chairman: Have you had an opportunity to look at the brief that we have received from the Equitable Child Maintenance and Access Society, from whose representatives we will be hearing in a few minutes?
Mr. Gardiner: I was provided with a copy of that brief this morning. That particular group is Alberta-based. I provided Mr. LaBerge and Ms Forbister with copies of what I had done because I believe it is fair that any group which appears before this committee should have access to data from real life situations.
The Chairman: On pages 15 and 16 they summarize their recommendations. You touched on some of these issues in your opening statement.
I will ask you, if it is not unfair, to eyeball these. Some of these recommendations are judgement calls; that is, policy matters on which your opinion is as good as that of anyone else but perhaps not better than mine -- no insult intended. However, there are others on which your professional opinion, experience and expertise would be extremely valuable to the committee.
Would you look at those now and comment on any or all of them as you see fit.
Mr. Gardiner: The first recommendation is:
Child support guidelines be based on the income of both parents.
That catches my eye because, as you know, the guideline tables are presumptive in the sense that, although you look at the income of the non-custodial parent, the Quebec model is better understood. In that, you take the income of both and say, for example, that the non-custodial parent has an obligation to pay $500 and the custodial parent has an obligation to contribute $200. It is very much misunderstood that this can be a one-sided equation. I like the Quebec model, which considers both incomes.
The Chairman: In general, you support recommendation number 1?
Mr. Gardiner: It is based on the income of both parents. It is an implied situation but it is not visible, it is not transparent.
The Chairman: Continue to take us through them, Mr. Gardener.
Mr. Gardiner: Recommendation number 2 read:
Child support guidelines recognize the fixed costs of the non-custodial parent in maintaining a home for the children.
I do not know how the table amounts were fixed. I assume that someone, some day, decided on how to arrive at the table amounts and certainly would have wanted to consider the fixed costs of maintaining residences.
Recommendation number 3 reads:
Child support guidelines be based on a sliding scale for time spent with each parent.
I have a personal concern with regard to this from my experience. Since we have had the 40 per cent threshold I have seen people attempt to keep score to get to 146 days. To my knowledge, there has been no judicial interpretation of what this 40 per cent means. Is it waking time spent, for example? Parenting is not just a one-hour-a-day responsibility, it is a 24-hours-a-day responsibility. Coparenting with a 50/50 relationship is the true shared parenting arrangement. A sliding scale based on access or time spent creates a nation of bookkeepers keeping track of how much time is spent with their children. I am troubled by that.
Recommendation number 6 reads:
A tax professional be included to review and make recommendations on the guideline amount and accompanying income tax implications.
I would hope that would be the case. There are a lot of tax implications of policy and regulations and they should be vetted by those who can assist groups in understanding what behavioural consequences will arise from certain actions.
Recommendation number 7 reads:
The area of "extraordinary" versus "ordinary" expenses be clarified by the authors of the guidelines and not left for case law to determine.
My suggestion there is that they should only be reduced. If you can reduce the area of conflict you will do a service to the many parents in divided households. That will enable them to focus more on their children than on very minor amounts of money. You would be surprised to know how much will be spent on legal fees over piano lessons, for example. It is incredible. I would remove the extra-curricular activities expense and build a higher amount into the table to include piano lessons.
Recommendation number 9 reads:
The area of "undue hardship" be clarified, bearing in mind that the results have to leave the paying parent a life-sustaining cash flow.
In this, cash flow is the key. It is not a ratio.
Recommendation number 10 reads:
The committee recommend the reinstatement of the tax treatment of inclusion and deduction.
That might be considered to be optional. Those who wish to opt in would be the sophisticated users of the results. There are those who would prefer to receive net cash and not make tax instalments.
Recommendation number 12 reads:
An immediate review of the guidelines take place, rather than in four years from now.
I agree with this recommendation. I do not know the mandate of this committee, but I would suggest that it learn what it can and make its recommendations early so that we will not have five years of the same thing and then make changes, because I think you will see inertia. Once things become set in place nothing will change for a while. It would be commendable if the committee could make recommendations and see them through. I would not wait for five years to find out what is happening.
Recommendation number 13 reads:
Child support should end upon the latter of the child reaching the age of majority or completing secondary education (high school).
I do understand the serious difficulties of children at or over the age of majority. In Alberta the age of majority is 19. The database indicates that there are very few applications with respect to children at or over the age of majority. The average age of children in the database for Alberta is eight or nine. There are exceptions of children who are adults. Perhaps there should be a different approach to deal with an adult child aged 18, 19 or 20 who has need of financial support from one or both parents with respect to post-secondary education costs.
The next three recommendations read:
14. If child support is to continue beyond the attainment of the age of majority and completion of secondary education, a legally enforceable support commitment should be placed on the both parents.
15. Tuition fee and education deductions should be apportioned to the supporting parents relative to the support provided.
16. The onus for variation of the child support order to continue beyond age of majority should be with the custodial parent.
These recommendations all deal with the unique child who is an adult and may be contributing to his or her education and may be living with one of the parents or both of the parents on a shared basis, or perhaps not even living at home but still in need. Teenagers or young adults who attend post-secondary schools are a unique situation.
I agree with some of these, I disagree with some of them and some may add further complexity. The goal is to make this easier, and it must be transparent. Those people who are impacted by the guidelines have to understand how they came about, not to challenge them but to be aware of how they were arrived at and to know that they apply to everyone.
The Chairman: Thank you, Mr. Gardiner.
Senator Cools: I wish to thank Mr. Gardiner for appearing before us this morning. I believe that he has put a significant amount of time into this work. Because his testimony this morning is so much stronger than some of the testimony we received in previous sessions I suggest that his written submissions be included in the record.
Many witnesses do a lot of work on written presentations and then, in the interests of time, summarize those presentations and only what they actually say appears in the record.
Mr. Chairman, could the written presentation of Mr. Gardiner be included in the record?
The Chairman: Is that agreed?
Hon. Senators: Agreed.
The Chairman: That is agreed.
(For text of document, see Appendix 5900/S2-SS-1, 6 "1", p. 6«1»:1.)
Senator Cools: Mr. Gardiner, it is a wonderful day when we can bring witnesses of your calibre before the committee witnesses who can be asked for their opinion on the recommendations of the next set of witnesses I commend you and I commend the next set of witnesses. I must say there is fantastic work coming out of Alberta in this particular field.
You were saying that the committee and the senators should move quickly to form some conclusions. The other witnesses who have come before us, and who are primarily of the lawyer brand, have told us that it is too early to tell. You advise us to form some conclusions before systems, attitudes and practices crystallize. I ask you to stand by that comment.
Senator Cohen: I have a supplementary to that. You also mentioned, Mr. Gardiner, that in five years the guidelines will be revisited. I wish to put on the record that when the committee on Bill C-41 met many of us made a recommendation that five years was too long and that we would like to have the guidelines revisited in two to three years.
The Chairman: We can report at any time.
Senator Cools: Yes. I have been reviewing some of the case law and I have before me a case in which Mr. Gardiner appeared as an expert witness. The case is an Alberta case, Court of Queen's Bench, Middleton v. MacPherson, June of 1997. The judge in the case is Judge Moreau, who said the following, at page 341 of the judgment:
It would be an easier exercise for the courts to determine what is an extraordinary school expense if there was evidence of what expenses were taken into account when creating the table amounts.
Mr. Gardiner, your concerns are being echoed more widely than we think.
You talk about the need for the Department of Justice, and obviously Parliament, to pay close attention to the issue of standards for software usage. I will not put a question to you on that but I thank you for that recommendation. Perhaps, Mr. Chairman, when the Department of Justice individuals come before us again we can ask them to review the very question that Mr. Gardiner has raised.
We must be reminded at all times, honourable senators, that we were told that these guidelines were needed and necessary to simplify the field. It would be simpler in search of uniformity, to have table amounts to which everyone can refer. We are now told that it is enormously complex, and that massive software and programs are needed for judges and lawyers to understand all of this. Furthermore, some of the software currently in use, unless people pay careful attention will yield different results.
The final point I should like to underline from Mr. Gardiner's remarks is his concern regarding the next witness's recommendations about the guidelines being based on the income of both parents. I believe the witness actually said that he is respectful of the Quebec situation, where both incomes are taken into consideration.
The reason I put some of this on the record, Mr. Gardiner, is that you do not know the background of this committee and how we got where we are. The sort of data that you presented this morning is difficult to get before the committee. I would even describe it as elusive. It is the sort of date that we really need. One of the issues that we have had to face is that while these guidelines are called "guidelines", they are really not guidelines at all. It is a novel exercise of the use of what we call "subordinated" or "delegated" legislation; in other words, regulations. What we have is an unusual situation, which many of us on this committee objected to when Bill C-41 came before us, which was, in essence, the use of regulations to evolve these commands, these orders.
You have not wrapped your mind around that and I wonder if you could do so, regarding the use of the regulatory powers to do this particular task?
Mr. Gardiner: I would attempt to answer that if I understood the political need for all of this.
The comment that you made, Senator Cools, on elusive data is interesting. I knew that in Alberta, because we commenced on May 1, we had data. It was being generated daily within the court system. I very much wanted access to the public information concerning what is happening as soon as possible. My next task will be to analyse the special expenses. I want to know which of the six special expenses is most commonly asked for, the ages of children it relates to, the frequency, and so on, to testify my personal belief that there are three of them that are really important and the other three are less important, the other three being the extra-curricular activities. That is an area where you create litigation because if we were not arguing about inflated budgets before we are now arguing about whether or not the piano lessons will be taken, whether or not the son should be a ballet dancer or a golf pro. That kind of thing should be avoided and the way to do that is to eliminate it from one of the exceptions.
The data is available. There are short-term federal pilot projects under way across Canada. This committee should be getting access to that sometime this summer. I am telling you in advance, at least from Alberta's perspective, what you might start to see, namely, that applicants and payers are both male and female, both of them have custody and there are non-custodial parents.
Regarding income variations, it is interesting to note that in shared parenting situations the income of both a male and female is higher than in sole custody or split custody. That tells me that if you are a sharing parent you must be making lots of money or more than the average. Things like that should be of interest; however, I do not know if it leads to any changes in the law.
To return to your comment, Senator Cohen, I knew that the guidelines would be reviewed within five years but I am pleased to hear that within two or three years something will be done if there are inequities within them, rather than say we will let it go its true course.
Senator Losier-Cool: My question is perhaps more appropriate for the next group, but you spoke about shared parenting. You said that shared parenting works and we do not see the necessity to include a section for shared parenting.
In the cases that I know about concerning shared parenting it must be parents with money so that it works. Is that what you have felt also in your experience?
Mr. Gardiner: That is what I have found. In the analysis of the cases in Alberta parents who are involved in a shared parenting arrangement with their children have higher than average incomes. Clearly, there is a duplication of households; they tend to have three-bedroom homes for each of them, they may have duplication of child costs, and so on.
The parents in those relationships have a higher average income by necessity. For those parents who would like to have shared parenting this probably means that where the income of one of them is significantly lower than the other it is not possible. When you have no income and high income you cannot have a shared parenting arrangement unless there is a payment of spousal support to the other spouse.
Senator Cools: That is what divorce is for, namely, wealthy people.
The Chairman: Senator Losier-Cool is from New Brunswick, as is Senator Cohen.
Senator Cohen: My question involves the other end of the economic scale. What happens to people in poverty, who do not have the funds to go to a lawyer or an accountant? Where do they end up? Who is there to give them the support that they need?
Mr. Gardiner: In terms of dealing with the guidelines?
Senator Cohen: Yes, because Legal Aid is almost extinct.
Mr. Gardiner: In Alberta -- but this is not common across Canada, and that troubles me -- there are child support centres in Edmonton and Calgary. The unrepresented -- that is, people with no income -- can go into those centres and fill out questionnaires. They will be assisted in coming to a conclusion about the table amount and their expenses. They will then be sent upstairs to the courtroom to appear before a judge with a complete an analysis of their situation based on factual evidence -- that is, tax returns, and so on. There is within the court system in Alberta the ability to get some assistance.
Senator Cohen: What if those who are unrepresented do not understand the legalities or express concern because some of them do not have an education? What happens to them?
Mr. Gardiner: In the child support centres in Edmonton and Calgary there are lawyers on staff. These are not clerks but actual lawyers who understand the law. You are provided with fair representation. Legal Aid will provide that.
Some of the other provinces, though, are not yet ready to assist those who are unrepresented or uneducated in terms of the guidelines and how that will impact upon their lives. That is troublesome, because when you have regulations that affect people you should provide education for them concerning those regulations.
Senator Cohen: Mr. Gardiner said that we need to educate and train the judiciary and lawyers. He also said they need more support with software, which they do not have now, and so on. You also said that you hope this situation will change in time, and that eventually these things will happen.
What troubles me is that those guidelines should have waited until all this was put in place. The guidelines that affect marriages, children and the well-being of a family are now in effect, while judges and lawyers still need training to be able to handle them.
We must think about that in the future because it is unfair to the Canadian people.
The Chairman: Thank you again, Mr. Gardiner, for your testimony this morning and for the material that you have left with us, which will form part of the record and the verbatim transcript of the committee.
Next, we will hear from Marina Forbister and Michael LaBerge from the Equitable Child Maintenance and Access Society.
The Equitable Child Maintenance and Access Society currently represents in excess of 1,700 western Canadian families. Their members are both men and women from Alberta, British Columbia, Saskatchewan and Manitoba. They are parents -- both custodial and non-custodial <#0107> grandparents, and others who are concerned with the inequities in family breakdown situations.
You have presented a brief to us. Please proceed.
Mr. Michael A. LaBerge, President, Equitable Child Maintenance and Access Society: Thank you for inviting us here a second time to present to this committee. We appreciate the effort that this committee has made in continuing the analysis of different issues that are affecting families across Canada.
First, we have a submission which we gave the committee. Because of the time constraints here we request that our submission be appended to the record and that it be treated as if it were read.
The Chairman: Is that agreed?
Hon. Senators: Agreed.
The Chairman: Carried.
(For text of document, see Appendix 5900/S2-SS-1, 6 "2", p. 6«2»:1.)
Mr. LaBerge: Thank you. We will then proceed.
Marina Forbister will speak about some of the items contained in the submission. I will then follow up with a couple of comments on the statistics that Mr. Gardiner put together.
First, with regard to Mr. Gardiner's data, we pushed as much as we could to have him come down here. Data was available and we felt that it was important for this committee to have that empirical data and to match it to see not only what is happening but also the anecdotal data associated with that and analyse it accordingly.
I appreciate the work Mr. Gardiner has put together. As I stated to Mr. Gardiner earlier, there were a few surprises, but because we did not like the song does not mean we will shoot the piano player.
I will now ask Ms Forbister to continue.
Ms Marina Forbister, Past President, Equitable Child Maintenance and Access Society: I am a chartered accountant. I have been working in the area of matrimonial breakdown for approximately 15 years. I moved three years ago to Alberta, but before that I was in public practice for 10 years and a partner in a CA firm, where a lot of my work was in the area of matrimonial breakdown. I am actually a custodial mother and have felt that this situation needed to be addressed for a good many years.
I do support the idea of guidelines. However, our problem is that we do not particularly support these guidelines. We believe there are areas where these guidelines could be substantially improved.
First, I should like to let the committee know what my references are in the brief. We talk about data prepared by Statistics Canada. That is based on a publication entitled "Family Expenditures in Canada", which was put out by Statistics Canada. It provides a very detailed breakdown, by age, gender and locale, of what it costs to raise children in Canada.
Second, we looked at the summary of the federal-provincial/territorial task force and what they came up with for guideline amounts. We compared that with what was presented by the federal government. As has been previously stated, we believe that the federal government was hasty in putting forth these guidelines without the proper analysis.
Our first recommendation to this committee is that you request from the federal Department of Justice the make-up of those numbers. Without knowing what is in the base -- that is, the guideline amount -- it is difficult to determine whether or not the guidelines are accurate or if they need to be adjusted up or down. We do not know what is made up in there. The judges are asking for that, we are asking for that and the committee members are asking for that. That would be a good starting point.
Moving on to our paper, I wish to make a correction on page 4, the second line. It states "yet in each case the base income is $65,000." That number should be $60,000 for illustrative purposes.
We touched briefly on the expenses of the non-custodial parent. In looking at the numbers that were prepared by the federal-provincial/territorial task force there was no recognition of the fact that while the children are in the home of the custodial parent the non-custodial parent still maintains those expenses.
In testimony before this committee in February Mr. Epstein testified that a reason to maintain child support for post-18 or post-age of majority children was that the non-custodial parent still must maintain the bedroom and so on for the six or seven times that the child is home from university. That is a good reason for those same expenses to be included in the non-custodial parent's home. Even when the children are in the custodial parent's home the other parent bears a certain level of expense.
I will touch only briefly on parenting time. There has been much discussion about the 40 per cent. We believe that if that number were a sliding scale there would not be the amount of litigation there is trying to achieve the 40 per cent and trying to prevent the other side from attaining the 40 per cent. The 40 per cent was chosen as a number to quantify what "substantially equal" would be, but it is really not an issue.
With regard to extraordinary expenses, when the government was coming up with the guidelines we were told that these guidelines would decrease litigation. That was one of their premises. This has, in fact, not happened. In fact, we have a base amount. One side can ask for add-ons and the other side can ask for reductions and then you end up in litigation.
We believe that those areas must be addressed. People need to know what is included in the base amount in order to know whether they are justified in asking for an add-on. When we appeared before the other committee we suggested that the undue hardship provisions would be very difficult to obtain and I believe that Mr. Gardiner's empirical data supports that. Of the nearly 2,800 cases 34 cases of undue hardship were allowed. That is one 1.25 per cent. As we suggested, it is not attainable.
We encountered a case where, although the guidelines are mandatory, the judge was not willing to comply with them. The guideline amount would have resulted in lower child support being awarded to our member and the judge just refused to comply. She said that in her opinion the evidence did not constitute a change of circumstances. There is no avenue of appeal on that. It is very expensive. If the judge is not willing to comply with the guidelines, even though they are mandatory, there are few options open.
The Chairman: I wish to note that we should consult with legal advisers on that.
Ms Forbister: We felt that was a very significant judgment. If we have encountered that it must be happening elsewhere as well. We brought that particular case with us. The judge basically did not accept that there was a change of circumstances and did not award it.
The Chairman: I am not sure that I want to get into particular cases with the department, but at some point we will have a chance to talk to lawyers from the Department of Justice about this. Please continue.
Ms Forbister: Tax treatment was dealt with before the Standing Senate Committee on Banking, Trade and Commerce in Bill C-92. At that time the committee saw it as a very disadvantageous tax move. We would support it as an elective provision for the parties.
Alternatively, we do not believe that the fact that it imposes a budgeting hardship is an adequate reason for having the tax treatment changed because all wages are net of tax. That could be a situation where the tax was sent in at source through the MEP program or whatever. There are ways around that.
Finally, I should like to deal with the issue of accountability. One of our members wrote to the previous Minister of Justice, Mr. Allan Rock, at the time the guidelines were coming in. I have a letter dated December 19 in which he specifically states that the courts have determined that accountability is not in the best interests of the children. I believe that very clearly illustrates how the phrase "the best interests of the children" has been twisted to mean whatever the particular author wishes it to mean.
In the area of child of the marriage, we are strong supporters of the belief that once children reach the age of majority they are no longer children, that they are adults and should be treated as such. If there is a provision in our social system whereby these individuals have a method of financing their education it should be available to all children. It should not be financed by only one parent but by both. We believe that the empirical data presented by Mr. Gardiner supports that this is a significant area in that of the 2,800 cases 200 dealt with adult children. That is a very significant number. Previous witnesses have said that "child of the marriage" only affects a few cases. In fact, it affects a lot of cases.
Finally, I should like to comment on the empirical data presented by Mr. Gardiner on page F. He cites child support amounts of 19 per cent, 29 per cent and 38 per cent of the payer's annual gross income. We believe that this relates directly back to the ability to pay.
To put that into numbers, which is what accountants like to do, $100,000 is considered a significant income in Canada. In Alberta there would be approximately $48,000 of tax paid on that. With three children the percentage is 38 per cent, which I have rounded out to 40 per cent. At that level, $40,000 of the payer's annual income would be going to child support, leaving a net amount of $12,000 -- $1,000 per month for a person making $100,000. That is why we submit that the net cash left to the payer must be a consideration. In many situations our members are left with $200 a month with which to support themselves. While we recognize that the children must be supported that cannot be done by driving one parent into poverty.
Mr. LaBerge: I should like to continue along the lines of Mr. Gardiner's data and summarize a couple of the pages of statistics. If there is any doubt Mr. Gardiner can correct me.
The first statistic is that 43 per cent of the cases were resolved by the parties themselves. This was a surprise to us. Our submission was prepared before we had the data in hand. We doubted the statistic from the federal-provincial/territorial task force that 10 per cent of divorces go to trial and litigation. We thought that our province must be a very odd case because we have a lot of people having problems with ex-spouses and the legal system itself. That is why we went further to see whether the data supported that figure.
It turns out that rather than 10 per cent the correct figure is 43 per cent. Approximately 43 per cent of divorcing couples have no problems. That means that 57 per cent are having problems. In our society we accept the fact that marriages can break down. What is making the 43 per cent work and what is the problem with the 57 per cent?
We have heard from Mr. Gardiner and other witnesses in the past that shared parenting does have a way of getting people together. What we do notice is that -- and Mr. Gardiner, again, mentioned this -- there is a high level of compliance and cooperation between parents. In this particular case he mentions that the shared parents have a higher level of income. Let us suppose that our system was built on the premise of shared parenting and cooperation instead of sole custody, access, litigation and adversity. As Canadians, we would see a much higher level of compliance with the law, we would see a much higher level of cooperation, we would see a much higher level of parents sitting down if two lawyers were to say that the law states you must sit down and put together a parenting plan. What works for you from a time standpoint, and then we also have a guideline level that will be associated because with your levels of income it takes a certain amount of money to pay for the child's upbringing. With those two factors, under the principle and the premise of shared parenting and cooperation, we would have a much healthier society. That is the first statistic as far as why people are out there and why we wanted to have this data in hand.
I have some other statistics. Approximately 90 per cent of the support recipients experienced an increase in the child support award. Of those people who had extra expenses, the section 7 expenses added on, the amount of increase above the base amount was 25 per cent. I remember that in some of the readings we had of the previous witnesses they suggested that no one is coming back to the courts, we are not having problems with it, therefore it must be working. Other statements have come up that if the levels are there and they are that high then, obviously, the amounts of the tables are too low.
What we submit in regard to some of the data that Ms Forbister mentioned to us and some of the calculations is that the amounts in some of the cases do not reflect the actual costs of raising the children. We do not feel it is in the children's best interest to have either parent in a financial state of distress. What these guidelines in this particular manner have done is to lead the payer to actually fall to a lower level of standard of living than that either he or his children have been experiencing, to some cases where he has been pushed into poverty.
Ms Cooper, on February 24, quoted a judge who made the comment:
Well, you do have the children half the time, sir, but you are living with your parents and you do not seem to be incurring any great expense, so you will pay the guideline amount.
To be quite honest, I think that is a little offensive. That is exactly what we are seeing in the anecdotal data with some of the samples of letters that we have from people. You are seeing individuals with viable businesses having to revert at the age of 45 with a couple of children and giving up their single-family home to moving in either with a roommate into a two-bedroom apartment or back with their elderly parents.
One thing that the guidelines and other people, again, have mentioned, is that they will bring about a fairer level of certainty and predictability. With some of the numbers that we are seeing 90 per cent of the recipients do show an increase versus what they had before, that it is certain and predictable that you will pay more. It does not say whether or not it is fair, equitable or whether or not the numbers were even calculated properly.
With one, two or three children a person will see 20, 30 or 40 per cent of their gross income going to another household; not your own household, another household. Granted, they are your children and they are my children, I should like to see them have a good standard of living, but they are my children as well. They do not just belong over on the other side somewhere.
What these guidelines have done in this particular case is shown that there is a predictability that you will see a very dramatic drop in your standard of living and your income level. What that does is leave is no incentive or motivation for a payer to better himself or herself from increasing their financial position. Why should a person continue to increase the amount of work and time if the net result will be minimized as you go higher.
From a Canadian standpoint -- and I never thought I would say this -- it is not an incentive to make more money so that you can pay more tax. What we are seeing here is that as healthy, viable Canadians, these guidelines in this manner do not support the viability of Canadians to increase their position.
Concerning garnishment and the licence denials, on a provincial level what we are seeing is that some people have had the removal of their means of making a living in order to support their children and themselves. At times you see and hear of the deadbeat dads, which is a term that I think is erroneous. There are many people who cannot pay and do not have the means to pay or they have had their means of making a living taken away from them.
Finally, I should like to speak on the legal system and the judiciary and the federal Department of Justice. There has been a fair level of trust and respect that has been lost by Albertans. Trust and respect are earned virtues. They are not a given right. In a department of our government that is supposedly for justice to propose laws, to show a leverage on one side, that can say a Canadian on this side of the law is better off than a Canadian on that side of the law is not justice, especially when they apply it to mothers, fathers and children in this country.
As far as the legal system is concerned, there has been an inconsistency in the advice and in the recommendations that go along with that advice. There have been inconsistencies in the judiciary as to the implementation of guidelines, garnishment and also the awarding of costs, which is almost inevitably against the payer.
Trust is low. We have many members that do not even want their names to be put forward because they do not trust the system. They are afraid of the repercussions from the justice department or from the judiciary within the province. That is a problem. Much of that comes from the societal norms. We sat in yesterday in the Special Joint Committee on Custody and Access and listened to various witnesses speak about societal norms as far as the position of mothers and fathers and roles as far as fathers, payers, nurturers, care givers, et cetera, were concerned. These societal norms are actually present and being presented by the lawyers and to the judges. The judges also have these societal norms that they are basing some of their judgments upon. What that proves is that the data that we are seeing here supports what Mr. Gardiner says, namely, that 57 per cent of the cases out here are not getting along the way they should. The system itself needs a bit of tweaking and revamping, education and consistency; consistency with the law and dealing with justice on both sides so that one parent is equal to the other parent. That has always been in the law. There is no primary caregiver, they are all primary caregivers. Just because as a couple you decide to split does not mean that either parent loves the child less.
This committee has done a good job, and so has Mr. Gardiner, on going through our recommendations.
I should like to reiterate from this particular standpoint that when it comes to the actual empirical and anecdotal data I would strongly suggest that this committee refrain from any conclusions until such time as the empirical data are gathered and distributed to groups like ourselves and all interested parties on both sides of the equation. That is to say, the payer side as well as the recipient side. One aspect that has never been qualified by the federal-provincial/territorial task force or the Department of Justice, even after many requests, is: What are the names of the groups that actually participated and were consulted from the payer's side and the non-custodial side? We have not received an answer from them yet. That is what I should also like to see the committee ask, namely, who was it and where was the input from the paying side of the equation?
In Alberta, we met with one of the Alberta representatives on that task force. When that was addressed her answer was, "It was an oversight." You do not study for seven years and consider one-half of the equation or the elimination of it "an oversight." In our opinion it is deliberate. There is something wrong. We have some serious questions when it comes to the actual numbers themselves in the guidelines. What Mr. Gardiner is showing here is that the net cash flow at the end of the day is getting very tight for a lot of Canadian families.
With that, I should like to again thank the Senate committee very much for enabling us to attend here this morning. Also, I wish to thank you for your continued efforts to search for solutions to Canadian families' problems.
The Chairman: We were supposed to have heard from another witness this morning representing the Nova Scotia Shared Parenting Association. The witness is not here and we do not seem to be able to reach him. If he is late, he is very late.
We have approximately 15 minutes left this morning for questions because some of our colleagues have caucus at 11:45. We will begin with Senator Cools.
Senator Cools: I wish to thank the witness for an excellent presentation. At the beginning of your brief you say that your organization represents in excess of 1,700 families.
I do not wish to probe into your personal affairs but are you both non-custodial parents?
Ms Forbister: No. I am a custodial parent.
Senator Cools: And you are a non-custodial parent?
Mr. LaBerge: Yes.
Senator Cools: Your organization is a voluntary organization?
Ms Forbister: Yes.
Senator Cools: Honourable senators, we sit here and receive a lot of briefs. Before the committee on Bill C-41 these witnesses presented an equally profound and solid brief. I thank you for that. All of this is done on your volunteer time with very few supports and no government financing.
Ms Forbister: There is no funding; that is correct.
I wish to tell you about one of the things we have done on a volunteer basis. The child support centres were mentioned by a previous witness. I went on a fact-finding mission to see how they were working.
Basically, I went into a centre and said, "I would like to find out about how I would go about making application under the child support guidelines." They said, "You can do it on your own but we recommend that you get a lawyer." Although the intent is that it is available to an unrepresented litigant it really is not. That is based on the side of a receiving parent.
Senator Cools: I think you were about to amplify on your statement but the Chairman was eager to ensure that he instructed our staff to revisit the question so you did not get an opportunity to cite the case contained in your brief. Under paragraph (g) in your brief you cite a particular case but you did not put that citation on the record. Could you give us the case?
Ms Forbister: It is Jones v. Jones.
Senator Cools: That is an Alberta case?
Ms Forbister: Yes. We have the case with us.
Senator Cools: Perhaps you could leave a copy of that with our researcher as well.
Ms Forbister: Yes, I will.
Senator Cools: You also made reference to a particular letter to the Minister of Justice. Perhaps you can leave a copy of that also for distribution.
Ms Forbister: Certainly.
Senator Cools: If there are any other documents that you would like to leave with us perhaps you could list them and then our researcher will have them in our arsenal of data.
Mr. LaBerge: We actually do have a sample of the letters. We made copies for the committee if you would like to have a set of them.
Senator Cools: I would be interested in that. Would any other senators be interested in that?
Senator LeBreton: I would.
Senator Cools: Perhaps you could ask the clerk to make copies and distribute them to members.
Senator Cohen: When you appeared before the committee in December of 1996 you were concerned about the potential effects of add-ons. What has your personal experience been in this regard?
Ms Forbister: The impression originally was that the add-ons would be extraordinary amounts and would only happen in rare cases. Our experience with our members has been that add-ons are occurring in the vast majority of cases. The data that Mr. Gardiner has presented this morning supports that position.
Basically, it seems that the guideline amount is a starting value that covers food, clothing and shelter. Any additional expenses have been considered by the courts and the receiving parents to be an add-on amount.
Mr. LaBerge: Along with that, what we are finding from our members is that, all of a sudden, costs are increasing. For example, if hockey cost $100 a month all of a sudden it became $200 or $300 a month. It becomes a battleground for legal counsel to push the amount of add-on expenses to the limit because the predictability is that the other side, based on the amount of income, will pay the majority of that share. Consequently, more income will go to the custodial parent through arguing and through the pushing of data through the lawyers. Again, it increases the animosity between the two people.
Ms Forbister: Yes, and there is more money for the lawyers.
Mr. LaBerge: The lawyers do get more money, yes.
The Chairman: A recommendation was made earlier here by Ms Betty Ann Pottruff, Director, Policy Planning and Evaluation Branch from the Saskatchewan Department of Justice, who was also co-chairman of the federal-provincial task force on implementing guidelines. The recommendation was that provincial enforcement agencies should have access to Revenue Canada records. I said that I would canvass future witnesses on this point.
Do you have a view on that recommendation or have you thought about it?
Ms Forbister: From a personal point of view I somewhat object to it.
Senator Cools: Good! We objected strongly that day, too.
Senator LeBreton: Yes.
Ms Forbister: That is not the view of the group, that is my personal point of view. We are getting into areas that are open to constitutional and privacy issues.
As a potential "second spouse"-- and I am currently not in that situation -- my income would be subject to review by someone else's former spouse. I object to that.
The Chairman: Thank you very much, Ms Forbister and Mr. LaBerge. This has been a good morning.
Senator Cools: Yes. It has been a very good morning.
Ms Forbister: The numbers are available. Mr. Gardiner is proof of that. If the numbers are not available they should be. The Department of Justice must get these numbers.
Senator Cools: These individuals had enormous difficulty getting the information they required.
Perhaps, Mr. LaBerge, you could tell members of the committee the kind of pressure that has been brought to bear on you.
Mr. LaBerge: We went through the normal procedure to get data. It was recommended that we talk to the federal Department of Justice. After a week or so we were informed that the data would not be available and that we would have to obtain it through the Freedom of Information Act. I had already spoken to Mr. Gardiner and knew that he had the data and was preparing the confidential report.
Our purpose and that of groups like ours is not to discredit but to put data and more information in front of the people who have the power to make decisions by adding to the empirical data and matching it up.
Perhaps that message did not get across as clearly as we initially thought it would. It was disappointing that we had to wait so long. Had we not had to wait we could have prepared a more complete report tied to the data and we could have worked more closely with Mr. Gardiner beforehand.
The Chairman: To be clear on that point, was the advice that you had to proceed with the access to information process received from federal officials or provincial officials?
Mr. LaBerge: From both.
The Chairman: You have an access to information law in Alberta, do you?
Mr. LaBerge: Yes, we have.
The Chairman: Mr. Gardiner, do you have something to add to that?
Mr. Gardiner: Yes. The database is information that I gathered personally. It did not belong to the province of Alberta or the Department of Justice. When Mr. LaBerge heard of what I was doing it was not the property of the Alberta government or the federal Justice Department to give to him because they did not know of it.
I echo what he says. It is important that people be provided with information to make decisions. As soon as I had it distilled enough for him I provided it to him. Unfortunately, I think he may have misunderstood who I was doing the work for. I was not doing it for a province or the federal government. I was doing it for myself.
Ms Forbister: We did not know of the database. We were not seeking access to Mr. Gardiner's database. We were seeking access to the federal government's collection reports, which are public records.
The Chairman: If it is any consolation to you, and I am sure it is not, there are many occasions when members of the Senate and the House of Commons have had to have recourse to the Freedom of Information Act to obtain information which we think we ought to be entitled to as a matter of course.
Ms Forbister: Thank you.
Senator LeBreton: I think it is marvellous to have witnesses with practical, on-the-ground experience rather than people who have obviously not had to deal with the reality and actual situations.
The testimony today has been incredibly insightful; some of the best we have had before the committee since I have been a member of it.
The Chairman: On that note, we will adjourn.
The committee adjourned.