By Samuel Duncan and Peter Copeland, March 6, 2025
In a Canada with plummeting birthrates, should economic policy prioritize families over individuals?
It’s a controversial question, with no simple answers, especially when non-coupled Canadians already claim to be victims of a so-called “singles tax”– not a literal levy, but rather the argument that single people face a disproportionate financial burden due to differences in rent, insurance, groceries, employer benefits, and government programs.
Others argue – in the Globe and Mail – that widespread singlehood is an economic advantage and that policy should shift to reflect this supposed reality.
This perspective is triply misguided. It fails to recognize the irreplaceable societal role of families, misunderstands why families tend to be better off financially, and ignores the fact that Canada’s economic and tax systems already favour individuals over family units. A closer look at these issues, as well as international examples from countries like France, Hungary, and Israel, shows that families do not receive sufficient support, despite their essential contributions – especially now, amid declining fertility rates.
Why families succeed – and why that’s not unfair
The idea that families unfairly benefit from economic structures assumes that their advantages stem from systemic bias rather than basic economic and social realities. The financial benefits couples enjoy – lower per-person costs for rent, groceries, utilities, and insurance – result from economies of scale, division of labour, resource pooling, and shared fixed costs like housing and appliances. Shared expenses reduce financial strain, while married couples tend to experience greater economic stability due to combined income and support structures.
Societal norms are not “unfairly” geared toward families and away from singles – it is the nature of reality that makes family the default. It is not unfair that people tend to be happier, more stable, productive, and other regarding when coupled, or that loving mothers and fathers are best for children by a long shot, but facts derivative of human nature. This is not to say that everyone should or ought to find a partner, but rather that a so-called “singles tax” is not a major public policy that deserves government intervention.
Families are foundational to any thriving society. They foster social stability, nurture future generations, and provide care for aging populations. Research consistently shows that strong family structures correlate with better health outcomes, lower poverty rates, and increased social cohesion. For example, studies indicate that married people tend to be healthier and live longer, while divorce damages children, and children raised by their biological, married parents in stable family environments are more likely to succeed academically and economically. These benefits extend beyond individual households to society at large, creating a ripple effect of positive outcomes.
The notion that our society ought to promote widespread singlehood reflects a deeply flawed anthropology, one that would see us miserable, poorer, more unsafe, and on our path to societal extinction, were it to take hold. The decline of the family is correlated with lower happiness, eroding social cohesion, economic stagnation, and even demographic collapse. Societal norms support families because strong families are the bedrock of civilization – not because of arbitrary or unjust favouritism or “social construction.”
Economic policy tilted toward singles
Despite perceptions of favouritism toward families, Canada’s current economic policies disproportionately favour individuals. Compared to families with children, singles benefit from lower total living costs and greater flexibility in housing and employment choices. Raising children is expensive, involving costs for childcare, education, health care, and housing. Yet Canada’s tax system primarily views individuals as separate economic units rather than recognizing families as collective entities with shared responsibilities. Families face higher costs across nearly every domain – yet they receive limited recognition in the tax system for these additional burdens. For example:
- Housing costs: Families require larger homes to raise children yet receive no specific tax relief for these higher expenses.
- Childcare costs: While programs like subsidized daycare exist in some provinces, they do not fully offset the high costs of raising children.
- Opportunity costs: Parents often sacrifice career advancement or income potential to care for their children – a trade-off rarely acknowledged in public policy.
Currently, Canadian parents can transfer certain tax credits between spouses or claim benefits like the Canada Child Benefit (CCB). However, these measures fall short of addressing the broader inequities in how families are taxed compared to singles.
Meanwhile, dual-income single individuals pay lower effective tax rates. Families often pay higher effective tax rates because Canada’s tax system is biased against single-earner families, and because family benefits and claw backs can create high effective tax rates. For example, if one spouse earns all or most of the household income, the family pays more tax than a dual-income couple with the same total income. While tax brackets are based on individual income, many government benefits (like the Canada Child Benefit, GST/HST credit, and other provincial programs) are calculated using combined household income. As a family’s household income increases, these benefits are reduced (clawed back), creating high marginal effective tax rates. This is not to mention that much of our society is structured to cater to individual consumption habits of individuals or small families.
By contrast, nations like France, Hungary, and Israel have adopted policies that actively recognize and support families, partly reversing fertility decline. Yet, France and Hungary may have plateaued. Only Israel has maintained a near-replacement fertility rate, largely explained by the fact that religion embeds itself within Israel’s social framework, so much so that secular Israelis have “more-religious-than-Western” attitudes towards relationships and family-building, engage in religious practices like Shabbos meals and gatherings for Yom Kippur. Policy and politics are indeed downstream of culture, which the case of Israel helps illustrate.
It is not that there are too few singles and society is tilted against it, but precisely the opposite. Declining birth rates across the Western world poses a significant challenge. Canada’s fertility rate has plummeted to 1.2 children per woman – well below the replacement level of 2.1. Coupled with our aging population, the sustainability of pension programs, workforce size, and long-term economic growth is threatened. With fewer young people entering the workforce, the tax base shrinks, and the ratio of workers to retirees collapses. Instead of finding ways to subsidize singles we should be finding more ways to encourage and support marriage and family formation. In fact, research tells us that this also runs counter to how many children women desire to have, demonstrating that the real problem is closing the gap between the desired amount of children women say they want and the actual number they are having.
A call for pro-family policy reform in Canada
Canada can learn from successful international models and implement pro-family reforms. Countries like Hungary and France have implemented bold pro-family policies that have slowed or reversed fertility decline. Hungary offers interest-free loans for couples, mortgage reductions, and tax exemptions for mothers with multiple children. France’s quotient familial system adjusts taxable income based on family size, reducing the financial burden on parents. These policies signal a cultural commitment to valuing families, which could result in a shift to a more deeply embedded valuation of family – something that Israel has successfully inculcated in its national ethos, based on deeply embedded religiosity.
Over time, Canada may achieve the cultural recognition for family life that Israel has, making it one of the few developed countries with near-replacement fertility rates.
Beyond tax reform, Canada should implement social security measures to provide additional relief. Introducing a CPP contribution deduction per child would recognize the economic role of parents in sustaining future pensions. Allowing maternity leave CPP pre-claims, offset by a delayed retirement age, would offer immediate financial relief without compromising long-term sustainability. Given rising life expectancy and delayed retirements, these reforms would help balance the system and ensure Canada’s workforce remains robust.
Key policy recommendations include:
– Family based taxation:
- Adopt a quotient familial system to reduce taxable income based on family size.
- Allow full income splitting for parents, so single-income families are not unfairly taxed.
– CPP contributions and pension reform:
- Introduce CPP contribution deductions per child to reflect the role of parents in sustaining future pension funds.
- Permit maternity leave CPP pre-claims, offset by a higher retirement age.
– Expanded child benefits and housing support:
- Increase tax deductions for family housing costs.
- Provide larger tax credits for stay-at-home parents.
These reforms would enhance financial fairness and encourage family formation at a time when Canada desperately needs it. Declining birth rates are not just a demographic issue – they threaten economic and social stability. Without families, there is no future workforce, no pension sustainability, and no long-term prosperity.
Critics argue that pro-family policies disadvantage singles. This misunderstands the broader societal benefits of supporting families. Stronger families mean stronger communities, a stable economy, and a sustainable future for all – including singles.
Conclusion
The “singles tax” myth distracts from the real issue: Canada’s failure to support families despite their indispensable role in sustaining any healthy society. Families bear disproportionate financial burdens while providing vital social goods such as child-rearing, workforce replenishment, and elder care.
By implementing family-first tax reforms inspired by France and Hungary, Canada can correct these inequities and foster a culture that values family life. This is not about privileging one group over another; it is about ensuring a sustainable future for all. Today’s children are tomorrow’s workers, taxpayers, and caregivers – a reality we cannot afford to ignore any longer. A society that fails to support families is a society that chooses decline.
Samuel Duncan is a vice president at Wellington Advocacy. He has held senior roles in the offices of both Ontario Premier Doug Ford and Prime Minister Stephen Harper.
Peter Copeland is deputy director of domestic policy at the Macdonald-Laurier Institute.
