Ottawa Citizen

Friday 26 February 1999

Dump no-fault divorce: study

'Disastrous' law allows adults to steal at children's expense, think-tank says

Andrew Duffy, with files from Eric Beauchesne
The Ottawa Citizen

Canada should scrap its no-fault divorce law because it allows individuals --mostly men --to steal family assets at the expense of children, says a study by the C.D. Howe Institute.

The author of the study, Simon Fraser University professor Doug Allen, argues that no-fault divorce has been a disaster for the Canadian family since it was introduced in 1968.

Canada's divorce rate has increased sixfold in 30 years, he said, leading to a dramatic increase in the number of children growing up poor in single-parent families. The law allows one party to petition for a divorce based on a set of established grounds, such as adultery, cruelty or incompatibility.

In a study entitled It Takes Two: The Family in Law and Finance, Mr. Allen contends no-fault has stripped the unwilling partner in a divorce of vital bargaining power.

"The unilateral aspect of no-fault laws means that too often divorce is little more than an act of theft that leaves behind poor wives and children with reduced human capital --or husbands with only the nominal title of father." The solution, he says, is to abandon no-fault in favour of mutual consent.

It means, Mr. Allen said, that neither partner would be able to leave a marriage without a spouse's written agreement. Such a law would restore the bargaining power of the unwilling party and ensure that benefits flow to the couple's children.

Too often under the no-fault system, he said, a husband can leave unilaterally but still retain the bulk of family assets because they were held in his name. Often, a woman's only bargaining power is access to the children, which is useless if a husband doesn't care to maintain contact with them.

"No-fault divorce laws have altered the relative bargaining strengths of each party," said Mr. Allen, an economics professor. "No-fault allows husbands to gain financially from divorce, but it also allows wives to gain emotionally and perhaps to gain complete custody of children."

Under a system of mutual consent, the parties would have to agree on custody and property issues for the divorce to proceed. It would result, Mr. Allen said, in fewer divorces because people in marginal marriages would likely stay together rather than suffer the consequences of a divorce.

"The big benefit is nobody can divorce at the expense of the other party -- and you don't have to lie as you did under the old fault-based system. One partner would have to essentially pay the other to leave."

Every year, about 50,000 Canadian children watch their parents go through divorce proceedings.

Research shows the probability of those children falling victim to some kind of social ill increases significantly in single-parent families.

"If we can decrease the divorce rate," Mr. Allen said, "we reduce the flow of kids into that stream and that has huge social impacts."

Meanwhile, the Institute said in a report that some modest-income families with children are paying up to nearly two-thirds of every extra dollar they earn in income taxes. Such "unacceptably high marginal tax rates are due to the fact that benefits from federal and provincial government programs aimed at the poor are clawed back as earnings rise."

And to ease that "unfair" tax burden, the report calls for an end to the clawback of the child tax benefit, which would cost the federal government $6 billion a year. The report is one of a collection of essays critical of the tax treatment of families published by the institute yesterday.

The C.D. Howe's publishing of the report is somewhat surprising in that, while it supports lower taxes, it has also railed in the past against what it argued were overly generous and unaffordable social programs.

The report, written by John Richards, a former member of the Saskatchewan NDP government of Allan Blakeney, recommends that the child tax credit be extended to all families with children regardless of income, much as the old baby bonus was paid to all families.

The recommendation, in effect, is a call for a restoration of universality in social support for families with children, a concept abandoned by the former Tory government as too costly.

In his report, Mr. Richards admits the move would be expensive but counters it is needed "to reduce the very high marginal effective tax rates on modest-income families."

Copyright 1999 Ottawa Citizen