“In Contino, where Bastarache J. also wrote for the majority, he considered various approaches to the interpretation and application of ss. 9(a) at paras. 40 – 44:
The first factor requires that the court take into account the financial situations of both parents (instead of the sole income of the spouse against whom the order is sought, as in s. 3). It is important to highlight the fact that the final and fully considered version of s. 9 does not include a conclusive formula to determine how the Table amounts are to be considered or accounted for.
The Court of Appeal, while it agreed that the use of a formula is not explicitly required in the section, concluded that the set-off approach in s. 8 could be a useful starting point to bring consistency and objectivity to the determination, especially in cases where there is limited information and the incomes of the parties are not widely divergent. I agree, but would caution against deciding these issues without proper information. I would particularly caution against a rigid application of the set-off which can entail, in the case of a variation order, a drastic change in support, dubbed the “cliff effect” by commentators (M. S. Melli and P. R. Brown, “The Economics of Shared Custody: Developing an EquiTable Formula for Dual Residence” (1994), 31 Houst. L. Rev. 543, at p. 565; Rogerson, at p. 74; Wensley, at p. 70), that may not be warranted when a close examination of the financial situation of the parents and standard of living in both households is considered. The value of the set-off is in finding a starting point for a reasonable solution taking into account the separate financial contribution from each parent. A court will depart from the set-off amount or make adjustments to it if it is inappropriate in light of the factors considered under ss. 9(b) and 9(c). The set-off amount must therefore be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of the fact that many costs are fixed. As mentioned by numerous commentators, this is a problem in many cases where there is a great discrepancy in the incomes of the parents (see Rogerson, at p. 64). It is also a problem in cases where one parent actually incurs a higher share of the costs than the other (taking responsibility for clothing or activities for instance). I would also note that the 40 percent threshold itself should be irrelevant to this evaluation; the cliff effect is not merely a result of the threshold; it is a result of the different methodology.
The Court of Appeal (as well as the father) summarized a number of applications of the set-off approach adopted by Canadian courts (see Fletcher v. Keilty (2004), 269 N.B.R. (2d) 302, 2004 NBCA 34 (N.B.C.A.); Slade v. Slade (2001), 195 D.L.R. (4th) 108, 2001 NFCA 2 (Nfld. C.A.); Dean v. Brown (2002), 209 N.S.R. (2d) 70, 2002 NSCA 124 (N.S. C.A.); Hill v. Hill (2003), 213 N.S.R. (2d) 185, 2003 NSCA 33 (N.S.C.A.); Cabot v. Mikkelson (2004), 242 D.L.R. (4th) 279, 2004 MBCA 107 (Man. C.A.); Dennis v. Wilson (1997), 1997 CanLII 1933 (ON CA), 104 O.A.C. 250 (Ont. C.A.); Wylie v. Leclair (2003), 2003 CanLII 49737 (ON CA), 64 O.R. (3d) 782 (Ont. C.A.); Green v. Green; Berry v. Hart; E. (C.R.H.) v. E. (F.G.) (2004), 29 B.C.L.R. (4th) 43, 2004 BCCA 297 (B.C. C.A.); Luedke v. Luedke (2004), 198 B.C.A.C. 293, 2004 BCCA 327 (B.C. C.A.); Gieni v. Gieni (2002), 29 R.F.L. (5th) 60, 2002 SKCA 87 (Sask. C.A.); see also Children Come First Report: A Report to Parliament Reviewing the Provisions and Operation of the Federal Child Support Guidelines, Vol. III (2002) (”Children Come First Report”), at pp. 68-70; J. C. MacDonald and A. C. Wilton, Child Support Guidelines: Law and Practice (2nd ed. (loose-leaf ed.)), vol. 1, at pp. 9-11 to 9-16).
The three main applications of the set-off formula adopted by the courts are:
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- Simple (or straight) set-off: The support payment is calculated by determining the Table amount for each of the parents as though each was seeking child support from the other. The amount payable is the difference between the two amounts (see, e.g., Middleton v. MacPherson(1997), 1997 CanLII 11517 (AB QB), 204 A.R. 37 (Alta. Q.B.); Luedke v. Luedke).
- Pro-rated set-off: The Table amount for each of the parents is reduced by the percentage of time the child spends with each parent. The recipient parent’s amount of time with the children is multiplied by the payor’s Guidelines amount and the payor parent’s amount of time with the children is multiplied by the recipient parent’s Guidelines amount. These two pro-rated amounts are then set-off against one another (see, e.g., Moran v. Cook(2000), 2000 CanLII 22542 (ON SC), 9 R.F.L. (5th) 352 (Ont. S.C.J.); Harrison v. Harrison(2001), 2001 CanLII 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.J.); E. (C.R.H.) v. E. (F.G.) ). A variation of this approach is the “straight pro-rate” which takes the percentage of time the recipient parent has custody of the children multiplied by the Guidelines amount for the payor parent.
- Set-off plus multiplier: The set-off amount (simple set-off or pro-rated set-off) is increased by a multiplier (usually 1.5), based on the assumption that a portion of the recipient parent’s costs are fixed, and therefore, unaffected by the increased time the child spends with the other parent.
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I agree with the father and the Court of Appeal that the simple set-off is preferable to the pro-rated set-off as a starting point for the s. 9 analysis in view of the language used by the legislator in para. (a). …”