More Choices For Parents

Editorial

Montreal Gazette

July 26, 1998

In the 1990s, parents are torn more than ever by the conflicting demands of job and family. Things, at least, were simpler (though not necessarily better) for many people in the 1960s when Dad earned the money and mom took care of the family. But economic circumstances have changed, to say nothing of social norms and attitudes.

These days, there is no one-size-fits-all model, nor should there be.

Among two-parent families, two incomes increasingly are the norm, for a variety of reasons, not the least of which is economic necessity.

But many one-income, two parent-families feel that the federal and provincial tax systems penalize them for the choice they have made.

Last week, Liberal MP Paul Szabo won a lot of publicity for a proposal he believes will make the system fairer for such families, and perhaps also make it feasible for more two-income families to choose instead to have one parent stay home, if they so wish. Mr. Szabo wants Finance Minister Paul Martin to approve a $50-per-child, per week payment to caregivers who stay at home with their pre-school children. The measure would cost about $1 billion a year.

That $50, says Szabo, is abut what the federal child-care tax deduction of up to $7,000 per pre-school child is worth to those two-income parents who are eligible. It's true stay-at-home parents pay no taxes and, thus, are not in the strictest sense deprived of a tax benefit. But the parent who is working is not allowed a child-care deduction, yet still has to support the stay-at-home parent.

These days $50 doesn't go very far, welcome as it may be. Mr. Szabo's proposal probably would not be enough to enlarge the choices available to most parents. But for some, it could tip the balance. Many parents -- 70 per cent, according to one survey -- would prefer to have one partner stay at home if the family could swing it financially.

Even more helpful than Mr. Szabo's proposal would be a change to the existing income-tax law to allow the family to split the sole earner's income between the two parents so that it would be taxed at a lower marginal rate. That would recognize the fact that the income is supporting someone who is staying home to raise children (and, thus, providing the child care necessary for the other one to support the family).

If Ottawa does decide to adopt Mr. Szabo's proposal, there should be a means test, though it should be set at a fairly high level. Otherwise, there is a danger that the money would only be an income supplement for the wealthiest families who can already afford to have a parent remain at home.

As it is, the existing child-care tax deduction that Ottawa grants is biased in favour of wealthier two-income families. Because child-care expenses give rise to a tax deduction (and not, as in Quebec, a tax credit that rises as income declines), wealthier two-income families can get more of their child-care expenses back than can poorer two-income families. That hardly seems fair.

Even more important, our society should begin investing in a more comprehensive solution to relieving child-care pressures on all families. Governments and employers should make it easier for parents, whether they remain at home or go to work, to spend more time with their children.

In Sweden, for example, mothers or fathers have the choice of spending 18 months caring for their babies at 90 per cent of their salaries and can return to work for six hours a day until their youngest child's eighth birthday. Canada may not be able to afford such a system. But there are other, less expensive changes that would improve matters, such as making working arrangements more flexible.

Modern life is complex. So are families and the choices they make in the interests of their children. Mr. Szabo's proposal deserves consideration, but others may have better ideas about exactly how to make tax policy fair to all parents.

In any case, tax policy shouldn't favour one-child care alternative over another.

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