• by Roxanna Cian
Originally published in the OFLM 2024-11 edition
Overview
Earlier this month, the Supreme Court delivered its decision in Auer v. Auer, 2024 SCC 36, where it engaged in a detailed analysis of the statutory validity of the Federal Child Support Guidelines.
Although the case centered on an application for judicial review and challenged the Governor in Council’s authority in developing the Federal Child Support Guidelines, the Supreme Court took the opportunity to offer important commentary on the foundational family law principles underlying the Guidelines.
By considering exactly why the Guidelines were found to meet the administrative law standard of reasonableness, this article will give insight as to what the SCC had to say about why the Guidelines represent a fair, equitable, and reliable approach that is vital to the practice of family law.
Facts and Case Overview
The Supreme Court case came on appeal after the Appellant father’s attempt to challenge the Guidelines through judicial review was denied by both the Queen’s Bench of Alberta and the Alberta Court of Appeal.
The parties married in 2004 and had one child in 2005, before divorcing in 2008. The child resided with the mother.
The father challenged whether the Governor in Council (GIC) operated within the bounds of its authorized powers in developing the Federal Child Support Guidelines and sought to have them stuck down (at para. 1). He claimed that the GIC exceeded its delegated authority conferred by s. 26.1(2) of the Divorce Act by ultimately requiring the payor parent to contribute a larger portion of child-related costs than the recipient parent (at para. 8).
In making this argument, the father held that the authority conferred on the GIC to design child support guidelines is limited as to direct child costs, such as the essentials of life. Second, he claimed that s. 26.1(2) of the Divorce Act requires child-related costs to be allocated based on the parents’ respective financial capacities (at para. 72).
The father submitted that the Federal Child Support Guidelines violated these two constraints by:
- Failing to take into account the recipient parent’s income;
- Assuming that parents spend the same percentage of income on their children, regardless of levels of income and children’s ages;
- Failing to factor government child benefits paid to the recipient parent;
- Failing to consider direct spending on the child by the payor parent when they have less than 40% parenting time; and
- Doubling the payor’s obligations to s.7 expenses. (at para. 6)
The Court was tasked with applying the administrative law standard of reasonableness to determine whether the GIC’s approach to the Federal Child Support Guidelines was within its legislative authority under the Divorce Act (at para. 66). In conducting the reasonableness review, the Court assessed whether the Guidelines were justified, transparent, and intelligible (at para. 50).
Overall, the Court held that the Divorce Act granted “extremely broad” powers to the GIC to develop child support guidelines, and that in the manner in which this authority was exercised passed the applicable reasonableness standard of review (at para. 115).
Reasonableness Review of the Guidelines
Significance of the Guidelines
The Court began by explaining how the early statutory scheme to child support granted judges broad discretion to determine support using a needs-based approach. However, it was criticized for being unreliable, subjective, and unfair, as the burden of proof fell on the recipient to adduce evidence of expenses. If the recipient failed to do so, it would result in a subjective amount of support being awarded (at para. 67). The introduction of the Guidelines marked a significant shift in family law, bringing predictability and certainty to child support determinations (at paras. 68 - 69).
Citing D.B.S v. S.R.G, 2006 SCC 37, the Court explained the core foundational principles that the Guidelines reflect:
(1) Child support is the right of the child;
(2) The right to support survives the breakdown of the child’s parents’ marriage;
(3) Child support should, as much as possible, provide children with the same standard of living they enjoyed when their parents were together; and
(4) The specific amounts of child support owed will vary based upon the income of the payer parent (at para. 69).
The Authority of the GIC in the Divorce Act
Next, the Court looked at the governing legislation of the Guidelines.
Section 26.1(1) of the Divorce Act provides:
26.1 (1) The Governor in Council may establish guidelines respecting orders for child support, including, but without limiting the generality of the foregoing, guidelines
(a) respecting the way in which the amount of an order for child support is to be determined;
(b) respecting the circumstances in which discretion may be exercised in the making of an order for child support;
(c) authorizing a court to require that the amount payable under an order for child support be paid in periodic payments, in a lump sum or in a lump sum and periodic payments;
(d) authorizing a court to require that the amount payable under an order for child support be paid or secured, or paid and secured, in the manner specified in the order;
(e) respecting the circumstances that give rise to the making of a variation order in respect of a child support order;
(f) respecting the determination of income for the purposes of the application of the guidelines;
(g) authorizing a court to impute income for the purposes of the application of the guidelines; and
(h) respecting the production of information relevant to an order for child support and providing for sanctions and other consequences when that information is not provided.
Section 26.1(2) further describes:
(2) The guidelines shall be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation. (emphasis added)
The Court rejected the Appellant father’s interpretation of s. 26.1(2) as requiring equal financial contribution to child expenses. Writing for the majority, Côté J. clarified, “While a “joint financial obligation” means that the parents have a shared financial obligation to support their children, it does not necessarily mean that this obligation must be equal…” (at paras. 78 – 79).
The Recipient Parent’s Income in Table Amounts
The Court went on to conduct a reasonableness review of each of the father’s five submissions against the Guidelines. In his first submission, the father held that by failing to account for the recipient parent’s income, the Guidelines did not prescribe table amounts in accordance with the relative economic abilities of both parents, as required by s. 26.1(2) of the Divorce Act (at para. 80).
The Court acknowledged that although the table formula assumes the same income for the payor and recipient parent, it intentionally deviates from a purely needs-based approach (at para 81). Following ample research, the formula was recommended by the GIC Committee as a child-centered approach (at paras. 83 and 85). Its purpose is to ensure the child continues to enjoy the same standard of living they had before the separation (at para. 85). The formula further assumes that, because the child resides with the custodial parent, that parent will continue to support the child in proportion to their income, as they did prior to the separation (at para. 87).
The Court held that, therefore, this approach was indeed justified and reasonable (at para. 89).
Percentage of Income Spent on Children
The father’s second submission contended that the Guidelines unreasonably assume that parents spend the same proportion of income on their children, regardless of income or the children’s ages. The Appellant asserted, that in practice, as income increases, while the total amount spent on children increases, the percentage of income used decreases. (at para. 90)
While the Court acknowledged that the table does assume that parents spend a linear percentage of income on their children, it found that it was reasonable for the GIC to implement a fixed table amount for payor incomes under $150,000 while providing discretion for courts to depart from table amounts for payor incomes above $150,000 (at para. 91). Further, the GIC’s broad authority under the Divorce Act can be reasonably interpreted to mean children’s specific ages do not have to be taken into account (at para. 94).
Government Child Benefits
The father also argued that child benefits should be factored into calculating a payor’s support obligation. However, the Court reiterated that this exclusion was a purposeful departure from a needs-based approach to child support. Highlighting this principle, the Court explained that government benefits are intended to increase “… the ability of recipient parents to spend more on [children] than would otherwise be possible” and, as such, should not be treated as additional income for the recipient parent (at para. 96). By affirming this position, the Court confirmed that child benefits are designed to enhance a child’s quality of life, not to reduce the financial obligations of the payor parent.
Factoring Direct Spending for the parent with less than 40% parenting time
The father maintained that it was unreasonable for the Guidelines to only factor direct costs such as housing, food, and other integral child expenses when a payor parent has 40% or more parenting time (at para. 100).
As section 26.1(2) states, parents have a joint financial obligation to contribute to child expenses, rather than an equal one (at para. 101). The Court clarified, “… The principle in s. 26.1(2) is not violated even if setting the threshold for considering payer parents’ direct spending on their children at 40 percent of annual parenting time results in some payer parents paying more than half of the child‑related costs.” (at para. 101). Furthermore, the Court recognized that in practice, recipient parents shoulder a significant share of financial responsibilities as the child’s primary caregiver (at para. 102).
Nevertheless, section 10(1) of the Guidelines provides discretion to award child support that deviates from the default table amount if it may cause undue hardship on the payor. This safeguards against the payor paying disproportionately high expenses in relation to their parenting time. (at para. 103)
Section 7 Expenses
The Court rejected the father’s claim that section 7 expenses, in addition to table child support, results in duplicated child-related costs (at paras. 107 and 108). Once again, the Court denounced a solely needs-based approach to child support, which would require both parents to contribute equally to their children’s needs in proportion to their respective incomes. Instead, the Court emphasized that a central principle of the Guidelines is that children are entitled to benefit as much as possible from both parents’ income within their relative means (at paras. 108 – 109).
Citing the Department of Justice report on the federal child support formula, the Court noted, “The concept of “cost of raising children” is an illusory theoretical construct.” As such, “…The Federal Child Support Guidelines aim to approximate, as closely as possible, the spending on the children that occurred in the pre-separation family.” (at para. 109)
The Court concluded that some overlap between table child support and section 7 expenses is to be expected. However, this approach was deemed reasonable, as it ensures the child continues to benefit in accordance with the parent’s financial capacities. (at para. 113)
Conclusion
Although Auer is presumably an administrative law case, it presents several key takeaways for family law lawyers. First, the Supreme Court of Canada affirmed the crucial role that the Child Support Guidelines play in objectively calculating child support obligations. Second, it clarified that “joint financial obligations” to child support in the Divorce Act, should not be interpreted to mean equal financial contribution from payor and recipient. Third, the Court reiterated the importance of the Guidelines demonstrating an intentional departure from a needs-based approach. Rather than awarding child support based on the mere essentials of life, the calculation methods used in Guidelines promote a child’s overall well-being and quality of life.
Ultimately, the decision reinforces the foundational principles of a child-centered approach to family law and the importance of ensuring that the best interests of the child remain at the center of child support arrangements.