“Section 19 of the guidelines permits the court to impute income to a party as it considers appropriate.
The jurisprudence for imputation of income sets out the following:
a) Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. See: Drygala v. Pauli2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731(Ont. C.A.).
b) The Ontario Court of Appeal in Drygala v. Pauliset out the following three questions which should be answered by a court in considering a request to impute income:
(i) Is the party intentionally under-employed or unemployed?
(ii) If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs, the needs of the child or reasonable health needs?
(iii) If not, what income is appropriately imputed?
c) The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally unemployed or under-employed. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made. See: Homsi v. Zaya, 2009 ONCA 322 (CanLII), [2009] O.J. No. 1552. (Ont. C.A.). However, in Graham v. Bruto, 2008 ONCA 260, the court inferred that the failure of the payor to properly disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income.
d) Once a party seeking the imputation of income presents the evidentiary basis suggesting a prima facie case, the onus shifts to the individual seeking to defend the income position they are taking. See: Lo v. Lo, 2011 ONSC 7663; Charron v. Carriere, 2016 ONSC 4719.
e) As a general rule, separated parents have an obligation to financially support their children and they cannot avoid that obligation by a self-induced reduction of income. See: Thompson v. Gilchrist, 2012 ONSC 4137 (Canlii); DePace v. Michienzi, 2000 CanLII 22560 (ON SC), [2000] O.J. No. 453, (Ont. Fam. Ct.).
f) A self-employed person has the onus of clearly demonstrating the basis of his or her net income. This includes demonstrating that the deductions from gross income should be taken into account in the calculation of income for support purposes. See Whelan v. O’Connor, 2006 CanLII 13554 (ON SC), [2006] O.J. No. 1660, (Ont. Fam. Ct.).
g) The court must have regard to the payor’s capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living enjoyed during the parties’ relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See: Lawson v. Lawson, 2006 CanLII 26573 (ONCA).
h) The court will usually draw an adverse inference against a party for his or her failure to comply with their disclosure obligations as provided for in section 21 of the guidelines and impute income. See: Smith v. Pellegrini,2008 CanLII 46927 (ON SC), [2008] O.J. No. 3616, (Ont. S.C.); Maimone v. Maimone, 2009 CanLII 25931 (ON SC), [2009] O.J. No. 2140, (Ont. S.C.). The parent must make full and complete financial disclosure to ensure that the information required to make a decision on the issue is before the court. See: Charron v. Carriere, 2016 ONSC 4719.
i) A person’s lifestyle can provide the basis for imputing income. See: Aitken v. Aitken[2003] O.J. No. 2780 (SCJ); Jonas v. Jonas[2002] O.J. No. 2117 (SCJ); Price v. Reid, 2013 ONCJ 373 (CanLII).”