by Beverley Smith, women’s and children’s rights activist
When people live in the same house, they often share many things. Families usually share meals, lodging of course, and also holidays, outings, and their range of sports and entertainment. They are not each living on their own but in effect have the same standard of living.
The tax department in Canada however requires them to pay tax as if they are mostly on their own, as individuals only. Many nations permit households to say that the income in the home has to spread over several people. As a result they can pay a household based tax that is lower than what their individual taxes would be. This income -splitting option exists in the US. It does exist in Canada for pensioners since 2007. But it still is not allowed for most households. In France it even exists for single parents who can declare sharing income with their child.
Without income splitting, the result is very unequal treatment of equally positioned people. Of 3 homes along a street, all earning the exact same amount, the household that has that income from two earners who earn the same amount as each other pays much less tax than the households where the adults have one earning a lot more than the other. The tax on the ones with widely different incomes between the partners can be 45% higher. Many of us feel this unfair. The purpose of the tax system is to tax based on ability to pay, and they have the same ability to pay.
Income splitting has another advantage. Not only is it in tune with the reality that people share their money, but it also treats the lower earner as a full person, a partner not of less value. The ability to split income as a result is a great way to advance women’s rights since often the lower earner in the home is a woman. Now she is valued also for her caregiving role.
This election year 2025, many of us are promoting income splitting as a tax policy for Canada. Many nations permit people to pay tax as individuals or as households, whatever ends up costing them less. Canada does not do that. It should.
Interestingly we nearly got there in 2006. In that year Bernard Dussault and Dan Braniff were able to find common ground among 18 of the nation’s largest pension groups. They focused on a single topic, and hosted a conference and powerful lobby. They brought to the discussion the views of 2.6 million members and argued for one thing – the option for pension splitting.
And they succeeded! The next year the federal government legislated pension splitting and no government has changed that policy.
Seniors often lead the way. These seniors were the generation that fought the second world war, and saw the merit in setting up universal health care and unemployment insurance. They were first to see and lobby for the fairness of being able to pay tax as a household not individuals.
It is now 2025. It is a good time to advocate for the right to split income for a wider group – for all households.
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Dans le scrutin federal a Canada il y a un movement qui recommande dans le systeme des impots, le choix de partager le revenu et de declarer la base de taxe la famille, pas seulement l’individu. Suite aux tariffs imposes par les Etats Unis, on considere que les effets negatifs seraient moins si notre system de taxe etait plus equitable.
Le declin recent des valeurs de la bourse augmente la justification de cette proposition.
Voice une site web qui explique ces idees.
On vous invite a participer a ce mouvement
Income Splitting in Canada 