1. Canada is the only G7 country to not allow tax deduction for the cost of raising children, for all children in the country. Despite the fact that a basic tax principle is that taxation should be based on ability to pay tax, and that having children reduces ability to pay tax, tax policy in Canada continues to ignore these costs.

2. Canada tax law continues to penalize families by being based on how money was earned not on the amount earned. On a household income of $50,000 a single earner family of four pays $4995 tax while on the same household income a dual-earner family of four pays less than half that or $2429. In other words the principle of vertical equity is violated. Tax is not based on income. Secondly the principle of horizontal equity is violated since families in the same economic circumstance pay different tax.

News

5. The child care expense deduction is restricted to those who seek salaried care, usually by nonrelatives, and this deduction is not tied to financial need. It is allowed only for dual earner families so the single income family is not permitted the deduction. Such a restriction on it interferes with personal lifestyle freedom. Child care expenses are incurred by all parents, some by direct payment to others, some by income sacrifice. The Government of Canada should allow all parents to claim this deduction, no receipts required, as was recommended by the 1970 Royal Commission on the Status of Women.

A change in tax law for those taking care of others is consistent with the international commitments UN nations are making to value unpaid and traditional roles of women, so as to be inclusive of their contributions also to the economy. Canada signed such an agreement at Beijing in 1995 but has yet to make this policy affect its tax law.
We humbly request that Canada's tax policy be changed.

3. Canada tax law does not recognize caregiving as a role of a person with full adult status. The caregiver tax credit is only $500 for the year and is restricted to those caring for the sick and the elderly, not for those taking care of the young. The spouse in the home doing caregiving of the young is treated as a dependant deductible for $6754 while any other adult's full personal deduction is $7231. The caregiving spouse is not treated as a full person.

4. Canada tax law does not allow caregivers to contribute to the Canada Pension Plan or benefit from it for those years spent providing unpaid care. The plan is designed only to count paid labor and its promise to not count seven years of unpaid labor against a caregiver, does not actually count those years to his or her credit. Canadian women or men giving care to others also are not permitted to contribute to RRSPs in their own names so they are in a position of forced dependency in their senior years.