2 CHILD SUPPORT GUIDELINES IN CANADA, 2020
children. e war on poverty requ ires more than piecemeal reform of child support rights
and obligations, although the Guidelines may reduce the economic plight of custodial par-
ents to some degree.
B. RELEVANCE OF INCOME TAX
Prior to May , periodic child support payments made pursuant to a court order or
written agreement after ma rriage breakdown were deductible from the taxable income of
the payor under sections (b), (c), and . of the Income Tax Act and were taxable as
income in the hands of the payee under sections ()(b) and (c), provided that such pay-
ments were made to the custodial parent and not to the child ren directly. As of May ,
Canada shifted to an income tax system whereby the payor no longer receives a deduction
for payments made and the receiving parent no longer pays tax on child support received
under any new order or agreement or pursuant to any variation made after April of
a pre-exist ing order or agreement.
e new tax rules do not apply to orders or agreements made before May unless (a)
a court order or agreement made on or after May changes the amount of child support
payable under an existing agreement or court order; (b) the court order or agreement spe-
cifically provides that the new ta x rules apply to payments made after a specified date which
cannot be earlier than April ; or (c) the payor and the recipient have both signed and
filed a form with the Canada Revenue Agency stating t hat the new tax rules apply to pay-
ments made after a specified date that ca nnot be earlier than April . e tax changes
do not apply to periodic spousal support payments, which continue to be deductible from
the income of the payor and constitute taxable income in the hand s of the payee.
Before May , lawyers and courts sometimes arr anged or ordered a global amount
of spousal and child support w ithout apportioning the amount payable to each category of
dependant. Such global amounts were commonly used by lawyers and cour ts when dealing
with interim support. i s practice should be abandoned as a consequence of the new tax
rules respecting ch ild support because an amount in a w ritten agreement or court order
that is not identified as being solely for the support of a spouse wil l be treated as child
support for income tax purposes. Simi larly, where a written agreement or court order pro-
vides that certain ex penses are to be paid directly to a third part y, such as mortgage pay-
ments, any such expenses that are not clearly identified as bein g solely for the benefit of the
RSC (th Supp), c .
ibaudeau v Canada (Ministe r of National Revenue),  SCR .
Del Puppo v Del Puppo,  BCJ No (SC); Hilchie v Hilchie,  NSJ No (Fam Ct); Acorn v
DeRoche,  PEIJ No (TD). But see Fung-Sunter v Fabian,  BCJ No (SC), citing Revenue
Canada Pamphle t on Support Payments, P(E) Rev at .
Fontaine v Fontaine,  BCJ No (CA); Gordon-Tennant v Gordon-Tennant,  OJ No
(Gen Div); Richard v Richard,  SJ No (QB) (unintended income tax conse quences of amended
agreement found to const itute sufficient reason to gra nt order for child support in accordance w ith
the Federal Child Supp ort Guidelines); compare Schipper v Maher,  MJ No (QB) (retroactive
variation of chi ld support arrears that acc rued before and after implement ation of Federal Child Sup-
port Guidelines). See also Warbinek v C anada, FCA , citing Holbrook v C anada, FCA ;
Chadwick v Cana da, FCA .
Williams v Williams,  BCJ No (SC); see also SAJM v DDM,  MJ No (CA) (trial judge’s
order for reduction in amount of s pousal support not justi fied, having regard to fina ncial disparit y
between old and new orders).