The costs from declaring Canada’s child-support guidelines illegal

Canadian taxpayers would have to foot a bill well in excess of $25 billion

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January 5, 2013

TORONTO, ON, Jan. 5, 2013/ Troy Media/ – What would happen if a Federal-Court judge musters the courage to declare this year that Canada’s 16-year-old Child-Support Guidelines – established on May 1, 1997 – were established without the authority of the Divorce Act? According to the Federal Courts Act, the Federal Court has exclusive original jurisdiction to make such a declaration.

The court ruling would undoubtedly delight the fathers’ rights movement, outrage the radical feminists, and put the Attorney General of Canada in a very precarious position.

With the declaration that the Guidelines are illegal, the provisions of every separation agreement relating to child support and every child-support court order made under the Guidelines would become void and all child-support payers across Canada could stop paying child support. If they did, child-support recipients would unquestionably be devastated and would most likely run to court to try to restore their child-support payments. As a result, Family Courts across Canada would surely be overwhelmed.

How would the Attorney General of Canada, Rob Nicholson, likely react?

His first order of business would be to obtain a temporary injunction to prevent the expected colossal flow of paperwork from being filed in Family Courts across Canada.

His second order of business would be to consider whether to appeal the decision. After consulting with his legal staff, he would likely choose to not appeal because he knew all along that the Guidelines were established without the authority of the Divorce Act when they discriminated against two identifiable groups of divorced parents: the child-support-paying parents and parents with higher incomes.

His third order of business would be to decide how to replace the Guidelines. To the apprehension of most federalists and to the delight of most Quebecois, he might concede that the quickest sensible solution would be to establish child-support guidelines mirroring the Quebec guidelines, retroactively to May 1, 1997. After all, the Quebec child-support guidelines were also established on May 1, 1997, by the authority of the Divorce Act.

Nicholson was well aware that the Quebec child-support guidelines almost always yielded materially lower amounts of child support. Testimony before the Standing Senate Committee on Social Affairs, Science and Technology on December 4, 1996, of Murielle Brazeau, Senior Counsel and Acting Head of the Child-Support Team, Department of Justice reflects this fact: ‘Quebec has an income-shares model which requires a calculation of both parents’ income . . . A comparison of different situations reveals that the federal guidelines are lower, but not by much — only where the custodial parent has little or no income and the payer also has a low income ‘¦ Otherwise, the federal amounts are higher, and in some cases considerably higher.’

His fourth order of business would be to calculate and pay out adequate compensations to child-support payers ‘¦ and, yes, to child-support recipients.

An adequate compensation for child-support payers would be the difference between the amount of child support paid according to the current Guidelines and the amount of child support calculated according to the Quebec child-support guidelines. With an estimated difference of $1.2 billion per year, the compensation for the 16 years of the Guidelines would then be in the order of $19.2 billion, with another $4.6 billion in interest at 3 per cent per annum.

An adequate compensation for child-support recipients would be a 4-year plan where they would receive from the Department of Justice a child-support supplement equal to 80 per cent of the difference in the first year, 60 per cent in the second year, 40 per cent in the third year, and 20 per cent in the fourth year. The supplements would then add up to 200 per cent (being 80 per cent plus 60 per cent plus 40 per cent plus 20 per cent) of (or twice) the difference. With an estimated difference of $1.2 billion per year, the compensation would then be in the order of $2.4 billion.

The total compensation paid out would then be in the order of $26.2 billion.

His final order of business would be to create an office within his Department of Justice to handle the administration of the compensation payouts. There may be 500,000 pairs of payers/recipients waiting to be compensated. If each administrator were expected to complete the paperwork for 500 pairs in a year, then 1,000 administrators would be needed to complete the paperwork for those 500,000 pairs within that year. At an estimated annual salary with benefits and related costs of $80,000, the budget for the office would then be in the order of $80 million.

The total costs to Canadian taxpayers would then be well in excess of $25 billion.

Troy Media columnist Lucien Khodeir is a Toronto tax consultant and the author of two books critical of Canada’s child-support guidelines available at: http://www.childrenwith2homes.ca/

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0 Responses to "The costs from declaring Canada’s child-support guidelines illegal"

  1. Avatar
    Mark Bogan   January 17, 2013 at 3:31 am

    Well written Lucien. The burning question: Who within the Canadian Bar Association is going to file a motion.

  2. Avatar
    GlennCheriton   January 17, 2013 at 3:57 am

    I understand the argument, but I cannot see courts declaring the child support guidelines illegal. Perhaps it would be better to put efforts into reform of child support so that it reflected both incomes and was based on actual income, rather than attributed. I suggest that the solution is a political effort rather than a legal challenge.

  3. Avatar
    GPiskor   January 17, 2013 at 5:29 am

    Every country or US state that has abandoned the percentage-of-obliger-income (POOI) approach followed by every province except Quebec has concluded that the POOI approach is crude and unfair. Quebec’s model is a definite improvement as it recognizes the incomes of both parents, recognizes the need for a reasonable minimum living standard for both parents, makes provision for parenting time of each household, recognizes visitation costs, and incorporates a maximum contribution limit of 50% of disposable income. While it has some flaws , it has stood the test of time relatively well in terms of the state of the art.
     By contrast, the Federal Guidelines approach was generally recognized as being crude and outdated even as it was being promulgated in 1997.
    This is ultimately a political issue. Unfortunately, considerations of fairness, equity, and duty of care have not been shown to be the strong suit of any party in power since 1997 when the Guidelines came into force.

    As I recall, the Senate committee that roundly criticized the current Guidelines 16 years ago stated it would review the Guidelines every 5 years…but no action thus far.

    So kudos to Quebec for taking a principled stand to develop its own guidelines in the face of obvious unfairness.

  4. Avatar
    David926   January 17, 2013 at 12:31 pm

    Another good column. Maybe you can clear this up for me, Lucien:
    While I understand the need to compensate those who have been forced to pay too much, I don’t understand why the federal government would pay back the excess payments to those who paid them. Why wouldn’t those who received too much money pay it back? What is the rationale for using taxpayers’ money to compensate people who were unjustly deprived of their money, instead of calculating how much the recipients of the unjust amounts received, and having them pay?

    • Avatar
      LucienK   January 18, 2013 at 6:38 am

      Very good question, David! While the recipients have benefited for 16 years from the abuse of public office of the Attorney General of Canada (AGC), they played no part in that abuse. All the blame falls squarely on the shoulders of the AGC. So should the payment of damages. When the Guidelines are declared illegal, the 16 years of damages for the payors will finally stop and the recipients will now begin to suffer damages from the sudden substantial drop in support unless the AGC softens the blow with a supplement over however many years he sees fit. Sadly, Canadian taxpayers will have to pay for the abuse of public office of their AGC.

  5. Avatar
    bil   June 13, 2013 at 10:56 pm

    and some one will need to retrieve the over payments from the parent who used these biased law to extort money from the poor payor.

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