FINANCIAL BURDEN ON FAMILIES

Canadian families don't need any pretentious studies to tell them what they already know — money is tight.

It doesn't hurt, though, to have this problem emphasized by studies. If the tax payer can't get the federal government to listen to them, then maybe concrete results from relevant studies will have some effect.

The Vanier Institute of the Family recently hired a consultant to analyse family and household income figures obtained from Statistics Canada. Not surprisingly, the consultant found that although there has been considerable economic growth in Canada during the 1990s, this growth has not translated into higher family incomes. In fact, the consultant found a 5.6% decline in real family incomes from 1989 to 1997, the latest year for which figures are available. While the average family income a decade ago was $48,300 after taxes, that amount had declined to $45,600 by 1997.

Further, the study revealed that in an effort to make up the short-fall, more former stay-at-home parents have gone to work. Fully 900,000 people who previously had not been earning income entered the workforce between 1989 and 1998, an increase of 25%. According to Robert Glossop, Executive Director of the Vanier Institute, "the only ones who seem to be able to keep their heads above water are dual-income families."

The solution, according to Mr. Glossop, is to restore the tax-deductions for children and other dependents that the Mulroney government phased out in 1993, in favour of a child-tax benefit. (Canada, by the way, is the only western industrialized country that does not take into account the cost of raising children when determining how much tax families with children should pay.)

Mr. Glossop argues that a child tax deduction for all families would provide relief to a badly overburdened middle class.

Let us hope that Finance Minister, Paul Martin, is aware of this survey and the many other reports and recommendations that have come his way this past year such as the Finance Sub-committee Examination of Tax Equality for Families with Dependent Children, (see Reality, "Report by Finance Sub-committee on Tax Equity for Canadian Families," p. 7, July/August 1999) and the report by the Quebec-based Institution for Research on Public Policy (see "Universal Child Care: A Failure," p. …..).

The February budget will tell us one way or another.

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