“With respect to under-employment or unemployment, the leading case in this area is the Ontario Court of Appeal decision in Drygala v. Pauli, 2002 CanLII 41868 (ON CA), [2002] 61 O.R. (3d) 711 (C.A.). In Crowe v. McIntyre, 2014 ONSC 7106, Chappel J. summarized Drygala along with other cases since, as follows:
[31] The Ontario Court of Appeal addressed the issue of imputation of income pursuant to section 19(1)(a) of the Guidelines on the basis of intentional unemployment or under-employment in Drygala v. Pauli. The following general principles derive from that decision and other cases which have considered section 19(1)(a):
a. Section 1 of the Guidelines stipulates that one of the objectives of the Guidelines is to establish a fair standard of support for children so as to ensure that they benefit from the financial means of both parents after separation. In attempting to carry out this purpose, courts must recognize that parents have a joint and ongoing obligation to support their children after the breakdown of their relationship. In order to meet this obligation, parents must as a general rule earn what they are capable of earning. Imputing income is a means by which the court can give effect to the support obligations of each parent after separation.
b. The first question which the court must address in deciding whether to impute income pursuant to section 19(1)(a) is whether the spouse is intentionally under-employed or unemployed. In determining this issue, the court should consider the payor party’s capacity to earn income in light of their age, education, health, work history and the availability of work that is within the scope of the party’s capabilities.
c. A finding of deliberate under-employment or unemployment does not require evidence of bad faith on the part of the payor spouse or an attempt on their part to thwart support obligations. A parent is intentionally under-employed within the meaning of this section if they earn less than they are capable of earning having regard for all of the circumstances. The parent is intentionally unemployed when they choose not to work when capable of earning an income.
d. In deciding whether a party is deliberately under-employed or unemployed, the court should consider the following principles:
i. There is a duty on a payor parent to actively seek out reasonable income earning opportunities that will maximize their income potential so as to meet the needs of their children.
ii. A self-induced reduction of income with no realistic prospect of future financial advancement is not a basis upon which to avoid or reduce child support payments. Accordingly, the court may find the party to be deliberately under-employed and impute income where the party has persisted in un-remunerative employment or self-employment, or where they have pursued unrealistic or unproductive career aspirations.
iii. A party may also be imputed income on the basis of deliberate under-employment or unemployment if they quit their employment for selfish or bad faith reasons or if they engage in reckless behaviour which affects their income earning capacity.
e. Even if it is determined that the payor parent is deliberately under-employed or unemployed, the court has the discretion to decide whether or not income should be imputed to them. This decision will turn on the court’s overall assessment of the reasonableness of the payor’s decisions and actions in relation to their income.
f. The onus is on the recipient spouse to establish that the payor parent is intentionally under-employed or unemployed. If this hurdle is crossed, the court must turn to the question of whether the under-employment or unemployment falls within the exceptions set out in section 19(1)(a). The onus at that point shifts to the payor spouse to satisfy the court that their situation falls within one of the exceptions.
g. If the payor alleges that their under-employment or unemployment should not result in an imputation of income because it is required due to their reasonable educational needs, the court must embark upon a two- step inquiry, as follows:
i. First, the court must determine whether the educational needs which the payor relies upon are reasonable. This analysis involves a consideration of the course of study and whether the studies will realistically lead to meaningful financial benefits in the long term. This inquiry must be undertaken keeping in mind that a spouse cannot be excused from their child support obligations “in furtherance of unrealistic or unproductive career aspirations.”
ii. If the court is satisfied that the course of study is reasonable, it must then determine what is required by virtue of those educational needs. In other words, the payor must satisfy the court that the payor’s level of under-employment or unemployment is required by virtue of their reasonable educational needs. If the payor does not satisfy the court on this point, the court may impute income at a level that it considers appropriate having regard for the educational program and the demands and expectations of the program. Questions which the payor must address include: How many courses must be taken and when? How much time must be spent in and outside of the classroom to ensure continuation in the program? Are the academic demands of the program such that the payor should be excused from pursuing part-time work? Could the program be completed over a longer period of time with the payor taking fewer courses at a time so that they could work on either a full-time or part-time basis? Is summer employment possible? Can the payor take co-operative courses as part of the program in order to earn income?
h. Finally, in determining the amount of income to impute on the basis of deliberate under-employment or unemployment, the court must consider what is reasonable in the circumstances of the particular case. The factors that the court is required to consider include the age, education, experience, skills and health of the payor, their past earning history and the amount of income that the payor could reasonably earn if they worked to capacity. [Citations removed.]”