2006 Amendments to the Federal Child Support Guidelines

By Len Fishman[1]

(Please note that case law cited is current to March 2006.)

Child Support Guidelines

The amount of child support which a support payor pays in Canada is governed by child support guidelines, including the Federal Child Support Guidelines [2] (hereinafter Federal Guidelines) enacted on May 1, 1997 as regulations under the Divorce Act [3]. Much of the discretion formerly left to the judiciary in child support cases was removed in favour of more predictable and presumptive rules for the determination of the payor's annual income, and tables to fix the amount payable on that income. Nevertheless, some discretion remains.

The Federal Guidelines generally provide for the extent and mechanics of financial disclosure of the parents, if required, and then mandate, with a few exceptions, that the amount of support payable by the supporting parent be determined by reference to the appropriate province's child support tables. These tables – idiosyncratically generated to account for the economy, taxation rates and other factors in each province, as well as the payor's capacity to pay based on income levels – are adjusted for the number of children, but not their ages, location within the province or other general circumstances.

The recipient's income is irrelevant to the "table amount" payable, unless custody is "shared" (section 9: a child in the care of both parents not less than 40 percent of the time) or "split" (section 8: at least one child primarily with each parent) as those terms are defined in the Federal Guidelines . The income of the recipient is also relevant in other situations including where there are special expenses (section 7), undue hardship (section 10) or where there is a child who has attained the age of majority and the court considers that using the Guideline amount is inappropriate considering the financial ability of each spouse to contribute to the support of the child (subsection 3(2)).

Provincial Guidelines

Section 2(5) of the Divorce Act provides that the federal government may designate a province which enacted its own guidelines to have its guidelines become the "applicable guidelines" for the purposes of the Act[4].

Each of the provinces and territories has followed the federal lead and enacted its own guidelines, most adopting the federal model, with others, notably Quebec, moving further afield to develop their own variations or adjustments to the paradigm. Provinces such as Manitoba have legislated a number of variations from the federal version. Generally, however, the provincial guidelines harmonize the provincial and federal child support laws.

Where both parents reside in the same province and the laws of that province are designated under s. 2(5) of the Divorce Act, then the provincial guidelines will apply. Thus, in provinces that have their own guidelines, such as Manitoba which enacted The Child Support Guidelines as regulations under the Family Maintenance Act[5], and are designated, the provincial guidelines apply to the determination of child support whether the Court is dealing with a divorcing couple, separating parents, or the children of common law relationships. Uniformly, guidelines apply whether the application is for an interim or final order.

The Federal Guidelines will only apply in divorce cases where the province in question has not been designated for purposes of the definition of "applicable guidelines" under subsection 2(1) of the Divorce Act (as of January 2007, only Manitoba, New Brunswick and Quebec were designated), where the parties reside in two different provinces or where one of the parties lives outside Canada. Practitioners will always wish to ensure they are working with the relevant and most up-to-date version of the applicable guidelines.

The 2006 Amendments to the Federal Guidelines

Amendments to the Federal Guidelines came into force on May 1, 2006. They make four specific substantive changes. Briefly, they are:

  1. Extraordinary expenses: A definition or test for the determination of the meaning of the phrase "extraordinary expenses" for the purposes of section 7 of the Federal Guidelines is provided.
  2. Foreign taxation: The law which affects those who are non-residents of Canada and are taxed in a country where the rates of taxation are higher than in Canada is changed to add fairness, by allowing the Court to assess an "appropriate" income for such payors.
  3. Table amounts: The table amounts have been updated.
  4. Change to the "undue hardship" test: The determination of each household's income has been slightly modified to incorporate a deduction for the Canada and Quebec Pension Plan contributions and Employment Insurance premiums into the optional Comparison of Household Standards of Living Test.

These four changes to the Federal Guidelines will be discussed individually.

The Change to Section 7 – Defining "Extraordinary Expenses"

In addition to the "table amount", the Court can, at the request of either spouse, order that additional amounts be paid for certain expenses which are seen as not having been covered by the table amounts, called "special and extraordinary expenses". These special or extraordinary expenses, if allowed (the Court has discretion even if an expense is found to be extraordinary not to make the award), will usually be shared by the parents, in proportion to their incomes, as set out in subsection 7(2). Again, the Court is not bound to make a proportionate award and may find that the parents should share the expense differently.

To be eligible for consideration, the expense must be "necessary" in relation to the best interests of the child, and "reasonable" in relation to the means of the parents and the child as well as the family's spending patterns prior to parental separation. The opening stem of subsection 7(1) sets out the primary test, which reads as follows:

7. (1) In a child support order the court may, on either spouse's request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child's best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family's spending pattern prior to the separation

The only expenses eligible for consideration are in the exhaustive list provided in subsection 7(1). Unchanged by the new amendments, the list in the Federal Guidelines is:

  1. child care expenses incurred as a result of the custodial parent's employment, illness, disability or education or training for employment;
  2. that portion of the medical and dental insurance premiums attributable to the child;
  3. health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counseling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses;
  4. extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child's particular needs;
  5. expenses for post-secondary education; and
  6. extraordinary expenses for extracurricular activities.

Although an expense might be reasonable, if it is not in the list or able to be categorized under one of these headings, it will not be considered.

It is worth noting that post-secondary education expenses need only be necessary and reasonable (subsection 7(1)(e)). It must be proven that expenses for primary or secondary school or for other educational programs are extraordinary as well (subsection 7(1)(d)). The typical case is about private school costs, but might also include activities or expenses such as for tutoring, cafeteria lunches,[6] driving lessons or music lessons . Some cases have considered school trips to foreign countries or whether a trip to investigate an out-of-province university meets the criteria.[7]

The term "extraordinary expenses" for the purposes of subsections 7(1)(d) (educational expenses) and 7(1)(f) (extracurricular activities expenses) has been the subject of divergent interpretation by the Courts. The test, whether an expense is extraordinary or not, has been seen by some Courts as objective; that is, not whether the parents have the ability to pay for the expense, but whether the nature of the activity and the nature of the expense is considered unusual[8]. More jurisdictions have taken the subjective view, particularly in the case of extracurricular activities that the parent's ability to pay is the controlling factor. In other words, the word "extraordinary" modifies the word "expense" not the word "activity".

What may be a "usual" expense for a high income family can be an "extraordinary" expense for an economically disadvantaged one. On the other hand, the amount of table support may be sufficiently high that the Court may find that there is no justification or need for expenses which otherwise might objectively have been included in the "extraordinary expenses" category[9]. For example, the cost of hockey is typically litigated on this issue. In a family where the table amount payable for the child is, for example, in excess of $1,000.00 per month, an annual cost of $800.00 might be seen as "included" in the table amount, whereas for the family in which the table amount is $100.00 per month, the expense could be seen as "extraordinary". Consideration of the family's prior pattern of spending may lead to the conclusion that an expense, formerly reasonable in the family's budget, is now no longer so. When the family was living on a combined income of $80,000.00 such an expense for hockey might have been affordable within the budget[10], but now, where the parents are no longer combining their incomes, that expense may become "extraordinary".

Manitoba , in an effort to clarify the meaning of "extraordinary expenses", passed amendments to its section 7 in 2001. The language of Manitoba 's amendment dealing with this issue has been adopted, virtually word for word, in the amendment to the Federal Guidelines . The only distinctions between the two amendments are to section references and the use of the word "spouse" instead of "parent" which appears in the Manitoba Guidelines. The Manitoba section, however, has other differences with its federal counterpart which may be relevant in a given case. For example, in the Manitoba provision, only the parent who has "sole custody" or "primary care" can make the request for section 7 expenses. The Federal Guidelines allow "either parent" to make the request. Another example of a distinction is that whereas subsection 7(2) in the Federal Guidelines indicates that the "expense is shared by the spouses in proportion to their respective incomes", Manitoba's indicates "the expense is shared by the parents in proportion to their respective incomes above the threshold level of income below which no amount of child support is payable in the table for the province in which the parent ordinarily resides." As always, counsel must be vigilant when relying on cases from other jurisdictions.

The text of the amendment to section 7 of the Federal Guidelines comes immediately after subsection (1) and reads as follows:

(1.1) For the purposes of paragraphs (1)(d) and (f), the term "extraordinary expenses" means

  • (a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse's income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

  • (b) where paragraph (a) is not applicable, expenses that the court considers are extraordinary taking into account

    1. the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate,
    2. the nature and number of the educational programs and extracurricular activities,
    3. any special needs and talents of the child or children,
    4. the overall cost of the programs and ac­tivities, and
    5. any other similar factor that the Court con­siders relevant.

The drafting of the federal regulation, like the Manitoba amendment before it, creates a bit of confusion in that, as pointed out by Carr J. in Chambers, [11] the Court must first look to the definition of "extraordinary" in s. 7(1.1) to make a finding that the expense does qualify under the section before addressing the determination of its necessity and reasonability and then the obligation to share the expense.

The new subsection creates a two part test, to be addressed serially. The first question "a" to be answered is purely subjective, whether the expense is too great for the claimant to "reasonably cover", taking into account the claimant's income, including the amount of child support that would be received. At this stage the payor's circumstances are irrelevant. If the expense meets this first test then it qualifies as "extraordinary" and this part of the inquiry is complete.

If the initial test is not applicable, the expense may still be found to be extraordinary if the Court is satisfied that it meets the criteria in the more objective, but still somewhat discretionary, five-part analysis which requires the Court to consider:

  1. the relationship of the expense to the claimant's income and child support;
  2. the nature and number of the educational programs and extracurricular activities;
  3. any special needs and talents of the child or children;
  4. the overall cost of the programs and activities; and
  5. any other similar factor that the court con­siders relevant.

The language implies that the Court must consider all of the criteria above[12], although there is no priority, mutual exclusion, or particular weight attributed to any of them.

In this secondary analysis, the Court might find that the claimant can afford the expense but that it is still "extraordinary" considering the activities themselves in the context of the child's particular needs and talents. The Court's discretion here is broad. While parents may raise issues under the specific criteria enumerated in subparagraphs (i) to (iv), for example, that the child is over-programmed or that the cumulative costs of all activities is prohibitive, the Court may consider other factors as relevant. Other relevant factors might include considerations such as the support payor was not consulted about the activity or school enrolment[13] or that the activity interferes with that parent's access or contact time with the child, that is, not in the child's best interests, or that the activity compensates for the non-custodial parent's lack of involvement with the child.[14]

Having determined that an expense qualifies as an add-on, the Court must then take into account the necessity of the expense in relation to the child's best interests, the reasonableness of it, having regard to parents' and the child's incomes and, where parents had cohabited prior to the birth of the children, the family's historical spending patterns. The issue of reasonableness is often a lifestyle one. Expenses that the intact family could afford may not be reasonable when there are now two households to manage on the same financial resources.

As Carr J. aptly reminds us in Chambers,[15] the Court must have evidence of necessity. It is not enough to rely on the precedent that another judge in Manitoba or another province has found hockey,[16] piano lessons, camps, tutoring or some other similar expense to be special or extraordinary expenses. The issue is to be determined on a case by case basis and for that the Court must have evidence of necessity and reasonableness, not the mere listing of the expense without more.[17]

Finally, litigants should bear in mind that the Court, even if all of the requirements of the two sections are met, need not order that an expense be shared given the overriding discretion at the beginning of section 7 where the language is: "...the Court may provide for an amount..."

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