Bill C-462 (Historical)

Disability Tax Credit Promoters Restrictions Act

An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act

This enactment restricts the amount of fees that can be charged or accepted by persons who, on behalf of a person with a disability, request a determination of disability tax credit eligibility under the Income Tax Act. It establishes a prohibition against charging or accepting more than an established maximum fee and establishes offences and penalties for failure to comply.

COVID-19 Emergency Response

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, once again the government is insulting disabled Canadians by refusing to answer the question I asked the Prime Minister on their behalf. It is time the government took the concerns of the disabled seriously.

Canadians know how the groping Prime Minister treats strong women, having purged the former health minister, Dr. Jane Philpott, along with the former female justice minister and a former female Liberal MP, who said of the Prime Minister, “You believe in them when it's convenient and you leave them when it's not.” The former Liberal MP also had this to say on why she quit: “So there were just a number of different instances that just didn't sit right with me and the principles that I hold dear, and I wanted to make sure that I was able to look at myself in the mirror the next day.”

Having a fancy title with “disability inclusion” in it and refusing to act is tokenism at its worst. The minister who includes disability in her virtue-signalling title has an opportunity to be more than a prime ministerial photo op. Include the regulations to enact Bill C-462, an act restricting the fees charged by promoters of the disability tax credit, in the disability inclusion plan now.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, I take this opportunity to thank the good people of my riding for their support and words of encouragement. It is an honour to represent them in the Parliament of Canada.

Earlier in this session, I asked a direct question for the Prime Minister about the disability tax credit promoters cottage industry that had prospered under his government. It collects exorbitant fees from disabled Canadians for a service that I provide free of charge to my constituents.

Seven years ago, I introduced a private member's bill, Bill C-462, restricting the fees charged by promoters of the disability tax credit. The Prime Minister at the time voted in favour of that legislation as did all the members of Parliament. My intention in sponsoring that legislation was straightforward. I wanted to see increased protection for disabled Canadians from the predatory practices of certain individuals who referred to themselves as tax credit promoters. When I found out that some individuals were being charged 20%, 30%, or 40% of the tax credit, I knew action had to be taken.

The last time I posed a question on this topic, the Parliamentary Secretary to the Minister of National Revenue chose to insult disabled Canadians by not giving them a relevant response in answering my question. This time, the member for Delta, aptly renamed the minister for virtue signalling to the disabled, was tagged by the Prime Minister to insult disabled Canadians by giving a different non-answer to why the government had not implemented Bill C-462, an act restricting the fees charged by promoters of the disability tax credit. The legislation to protect disabled Canadians was voted on and passed unanimously by Parliament.

The following is an email I received from a constituent about one of the biggest disability tax credit promoters in Canada. It is one of many emails I have received from disabled Canadians who have been taken advantage of, thanks to the policy of the government to ignore them. It illustrates the situation the government condones every day it delays implementing Bill C-462, an act restricting the fees charged by promoters of the disability tax credit. The email states:

“I live in Arnprior with my wife, 75 years old and basically bedridden. I'm contacting you because I don't know where else I can go, and I remembered a few years ago you were investigating into this company and were going to introduce a bill to halt their practices. Anyhow, about 10 years ago, my wife unwittingly contacted them to secure outstanding disability payments from CRA. She thought she was contacting a government agency, and they did get her a little over $9,000, then sent her a bill for $3,500. We thought that was unreasonable so we consulted Legal Aid. They told us that it was definitely unreasonable and ignore them. So my wife never recognized the debt. That was 10 years ago.

Then in January of this year, we received a bill for $11,000 sent by a company called Veritas. I thought it was a scam because we didn't owe anyone $11,000. About a month ago, we received another bill for over $9,000 from a law firm, saying if we didn't pay them by November 14, they would file bankruptcy against my wife. They've since changed it to $6,800. My wife earns $1,800 a month from CPP, old age security and a small pension.

I'm sorry this is so long, but I'm hoping you can help us. Thank you.”

That charge is almost 40%, and I am told that this tax credit promoter drives a Maserati, which the Prime Minister knows is a very expensive Italian car.

The minister of virtue signalling to the disabled brags about doing things behind the scenes. How about working for disabled Canadians behind the scenes and getting the regulations to enact Bill C-462 done?

Canada Revenue Agency

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I will tell members what happened. There was an unfortunate change that led to a government that breaks its promises to reward its friends. Canadians are still waiting for the regulations for that legislation that was enacted seven years later. In the latest example of meaningless tropes from a government that excels in meaningless slogans, this time from the last Speech from the Throne, is something called the disability inclusion plan. If the Liberal government was actually serious about helping Canadians living with disabilities, the regulations to implement Bill C-462, an act restricting the fees charged by promoters of the disability tax credit, would be law by now and in the plan. The process to determine eligibility for government disability programs and benefits should not have been left in the hands of these tax credit vultures all these years.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, I welcome the opportunity to demonstrate to Canadians why, aside from all the scandals, they should not be trusting the Prime Minister or his party.

Let me be very clear. I support helping Canadians who are struggling with the unprecedented events of our time, such as the COVID pandemic. The federal government's promised one-time payment for Canadians living with disabilities who are struggling through this pandemic is one such support, even though it is only being delivered now after months of meaningless clichés from the Prime Minister. I do not support a government that uses an extraordinary event like a health pandemic to erode the democratic rights of Canadians.

Unfortunately for Canadians, this abuse of democracy was happening before the pandemic by ignoring the will of Parliament and not bringing forth the necessary regulations to implement Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit. Canadians living with disabilities have been taken advantage of. Rather than receiving their full benefit of this special one-time payment, some Canadians living with disabilities are poised to lose a portion of it. The abuse of middlemen charging fees to access government programs is becoming so rampant under the Liberal government that an RCMP anti-fraud analyst was recently quoted by the CBC, saying that he wonders whether or not the time has come to start “regulating the promotion of access to government services where people are making money off people trying to access these services that are otherwise free to access”.

The same disability tax consultants saw big paydays when the Canada emergency response benefit was introduced. One such tax consultant started offering to apply on behalf of taxpayers for the benefit. He advertised to assist with CERB applications. This is what can be read on his website: “We have no upfront fee, you only pay us once you get your CERB payment. Due to these rough times, Canada Tax Reviews has reduced our fee from 33% to an 8% fee for this program.”

Seven years ago I introduced private member's legislation, Bill C-462, restricting the fees charged by promoters of the disability tax credit. One of the ways to receive this special one-time disability tax benefit just announced was to qualify for this. My intention in bringing that legislation before Parliament was straightforward. I wanted to see increased protection for disabled Canadians from the predatory practices of certain individuals who refer to themselves as tax credit promoters. When I found out that some individuals were being charged 20%, 30% or 40% of the tax credit, I was misled to believe that Liberal members of Parliament agreed that those kinds of charges were unfair. This is especially true when considering the purpose of the disability tax credit is to support Canadians living with serious disabilities.

Parliament voted in this tax credit in recognition of the fact that Canadians with disabilities face extra challenges. As the member of Parliament whose riding includes Garrison Petawawa, the soldiers and veterans in my community are at greater risk for a number of disabilities because of the sacrifices they have made for our country. The tax credit is of special importance to them.

In bringing forward Bill C-462, I also wanted my constituents and all other Canadians to know they could access their local member of Parliament regarding any federal tax credit without being charged a percentage of the tax credit. Seven years ago, my private member's legislation helped disabled Canadians receive unanimous support in that Parliament. Even the current Prime Minister, who at that time was an opposition MP on the WE Charity speaker circuit, voted in support of my legislation. What happened?

Further COVID-19 Measures Act

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, I will be sharing my time with the member for Calgary Skyview.

As the member of Parliament for Renfrew—Nipissing—Pembroke, I welcome this rare opportunity to participate in a parliamentary debate ever since democracy was shut down by the government. The legislation before us today, Bill C-20, consists of several random diversionary payouts and other changes that more properly should have had extensive examination in a parliamentary committee before being passed into law.

I support helping Canadians who are struggling with the unprecedented events of our time, like the COVID-19 pandemic. I do not support the transfer of large amounts of taxpayer dollars to organizations that personally benefit family members of Liberal MPs. The decision to accept an unconfirmed, unsolicited proposal from an unregistered lobbyist representing an organization that had members of the Prime Minister's family, and perhaps others with close association to the Liberal Party, on its payroll in the amount of hundreds of thousands of dollars, is a level of corruption beyond the comprehension of most Canadians.

When the Canada student service grant was announced, WE Charity was not in the announcement. Even after sordid detail after sordid detail was revealed, the Prime Minister defended his ethical lapse in the same way he responded to groping a female reporter and dressing up in blackface. He repeatedly lied: deny, deny, deny. He could get away with that in a neutered media. The floor of the House of Commons, however, is another matter.

The amount of money in the WE Charity scandal is staggering: almost $1 billion. What reasonable Canadians fear is that this revelation of payments to individuals directly associated with the Liberal Party is the tip of the iceberg. There is a reason the Prime Minister is hiding from Canadians by not facing Parliament, conveniently taking a so-called vacation day, a “we” day. The Prime Minister likes his daily cuckoo-clock appearances where he can avoid actual questions. Awarding an unsolicited contract with no fair, competitive tendering process should require resignations. The fact that the contract was awarded to an organization with family members of Liberal MPs on the payroll is indefensible.

Let us look at where the millions in administration fees were going until somebody pulled the plug, waiting for the heat to die down. WE Charity has been effectively described as operating like a cult. First was its scheme to pay for volunteer labour and next was the plan to pay students for volunteer labour at below minimum wage. That proposal raised a few eyebrows, except now we have learned this is how the WE organization operated its various companies: with naive, idealistic young people put on a salary and then being required to work 60 to 70 hours a week. The salary was calculated at a normal 37-and-a-half-hour week, so effectively, the WE Charity found a loophole to get around provincial minimum wage laws.

With the backing of the federal government, WE Charity figured it found another loophole to avoid minimum wage laws. If young people complained, they were shamed into accepting workplace conditions by being reminded that the school children who donated their pennies, nickels and dimes to the WE Charity expected all the money to go to help underprivileged children in Africa. Little did those school children know that their pennies were being collected to buy commercial real estate in downtown Toronto and to pay fat speaking fees to family members of Liberal MPs. This is what happens when Parliament is shut down and people with no ethics or scruples are in charge. There is a total lack of accountability.

Let us look more closely at the legislation before us today. Of all of the measures contained in Bill C-20, I am particularly interested in measures that support Canadians living with disabilities. Bill C-20 proposes to direct a payment to individuals who qualify for the disability tax credit.

Seven years ago, I introduced a private member's bill, Bill C-462, restricting the fees charged by promoters of the disability tax credit. My intention for bringing that legislation before Parliament was straightforward. I wanted to see increased protection for disabled Canadians from the predatory practices of certain individuals who referred to themselves as “tax credit promoters”. They see the tax credit as an opportunity to profit on the reduced circumstances of others.

The disability tax credit is a non-refundable tax credit that reduces the amount of income tax that either individuals living with disabilities or their supporting persons have to pay. Parliament voted in this tax credit, with the recognition that Canadians with disabilities faced extra financial challenges. Bill C-20 proposes payments of up to $620 for Canadians living with disabilities.

My constituents question whether the reason for the lump sum payment contained in Bill C-20 can be accepted at face value or whether it is a taxpayer inducement to get Canadians to forget about the WE Charity corruption scandal.

When I found out that some individuals were being charged 20%, 30% or as much as 40% of the tax credit, I thought that Liberal members of Parliament agreed that those kinds of charges were unfair. This is especially true when considering that the purpose of the disability tax credit is to support Canadians living with serious disabilities.

As the member of Parliament that includes Garrison Petawawa, I am acutely aware of the number of Canadians living with disabilities who are in my riding. The soldiers and veterans in my community are at a greater risk for a number of disabilities because of the sacrifices they have made for our country. The tax credit is of special importance to them.

In bringing forward Bill C-462, I also wanted my constituents and all other Canadians to know that they could access their local member of Parliament regarding any federal tax credit, without being charged a percentage of the tax credit. Seven years ago my private member's legislation to help disabled Canadians received unanimous support of that Parliament. Even the current Prime Minister, who at that time was an opposition MP on the WE Charity speaker circuit, voted to support my legislation.

What happened? There was an unfortunate change in government. Canadians are still waiting for the regulations for that legislation to be enacted.

Why the delay? The change of government brought the usual Liberal hangers on, the lobbyists who look for ways to game the system at the expense of other Canadians. Liberal lobbyists derailed protections for disabled Canadians with the full support of the Prime Minister and his party.

Disabled Canadians are some of the most vulnerable in our society. With all the money the federal government is shovelling out the door, like today's legislation and the WE Charity scandal, and without the proper scrutiny of Parliament, money intended to help Canadians goes elsewhere.

These same disability tax consultants saw a big payday when the Canada emergency response benefit, CERB, was introduced. One such consultant started offering a service that charged clients a fee of $160 to assist them with their CERB application. This is what can be read on its website, “We have no upfront fee, you pay us only when you get your CERB payment. Due to these rough times, Canada Tax Reviews has reduced our fee from 33 per cent to an 8 per cent fee for this program.” Every four weeks, those who still have not found jobs have to reapply for CERB. Each time a person uses that tax consultant to apply for CERB, as fees vary, a $160 is charged. That is a payday of almost $1,000 to a tax consultant from somebody who collects the full CERB, someone who could have used that money to pay rent or to put food on the table.

If the government audits a taxpayer and finds that he or she did not qualify for CERB, that taxpayer will be required to pay back the full amount, including any fees paid to tax consultants. If the government had carried through with the will of Parliament and implemented Bill C-462, , an act restricting the fees charged by promoters of the disability tax credit, the abuses happening today would not be happening.

Bill C-20 needs to go before a parliamentary committee the same way the sweetheart $912 million Canadian student service grant contract to a Liberal insider should have. Canadians deserve no less. The last time I looked, Canada was still a democracy. It is time Canada started acting like one.

Persons with Disabilities

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, I am pleased to support my colleague, the member of Parliament for Brant, regarding his motion to endorse rethinking disability in the private sector and encourage greater private-public partnerships to increase job opportunities for persons with disabilities.

The member of Parliament for Brant has a sincere interest in assisting people with disabilities. I am pleased to acknowledge his efforts as chair of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons With Disabilities.

I was also delighted with the support he gave me with respect to my private member's bill, Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act. Bill C-462 was passed unanimously by all members of the House of Commons and for that, on behalf of persons with disabilities, I thank everyone.

The motion before us is very timely as it fits in with our Conservative government's focus on jobs, growth, and long-term prosperity.

We have all heard of the skills mismatch in this country. Businesses all across the country are calling it the greatest obstacle to their continued growth. Our Prime Minister has called it the most serious economic issue of our time.

We have hundreds of thousands of jobs going unfilled, and yet we have about 800,000 working-age Canadians with disabilities who are unemployed even though they are capable and want to work. About half of this group have college or university education.

Just under 60% of people with disabilities are in the workforce, compared to 80% of other working-age Canadians. There is a clear mismatch here. Businesses are telling us they cannot find workers with the right skills. At the same time, people with these particular skills, who just happen to be disabled, cannot find work. Here is the crux of the matter: we are ignoring an important source of talent.

People with disabilities can be part of the answer to our skill shortage. When the panel on labour market opportunities for persons with disabilities interviewed employers across the country, it found that there was considerable openness to the idea of hiring people with disabilities. It received positive reactions from businesses of all sizes and from a broad range of industry sectors.

Those employers who already had employees with disabilities were more open to hiring more people with disabilities. In fact, they were enthusiastic. They had seen how much people with disabilities contribute to their businesses. People with disabilities are just like all workers. They are highly motivated to do well and they work hard. They make excellent employees.

The cost of accommodating a person with a disability is often quite low or even nonexistent. As I said before, the panel's report makes it clear that accommodation costs are usually so manageable that they should not be a barrier to hiring a person with a disability.

For a small investment, employers get very good value. For one thing, businesses with employees with disabilities have less turnover. People with disabilities can give businesses a competitive advantage. Why then are employers not hiring more people with disabilities? It must be that these workers currently do not have the skills for the jobs that are available. That is why our government is responding to this motion directly by investing in programs that will equip people with disabilities with the skills they need for the jobs that are available.

In economic action plan 2013, we announced that the Government of Canada would work with the provinces and the territories on a new generation of labour market agreements for persons with disabilities, to more effectively connect Canadians with disabilities with employers and with jobs. These new agreements will be negotiated this year and will deliver better results by being driven by demand and have more employer involvement.

We provide $222 million a year for these agreements, which support approximately 300,000 interventions every year for people with disabilities through more than 100 programs designed and delivered by the provinces. We have rewritten these agreements to better meet the labour needs—the particular skills employers need—and Canadian businesses will improve the employment prospects of people with disabilities through these programs.

Economic action plan 2013 also maintained funding of $40 million per year for the opportunities fund for persons with disabilities starting in 2015-16. The opportunities fund is a subsidized job program that will help Canadians with disabilities gain the hands-on experience they need to fully participate in the labour market. Since 2006-07, the opportunities fund has helped more than 34,000 clients develop skills and gain work experience.

Economic action plan 2013 proposed that employers and community organizations be more involved in local project design and delivery to ensure a stronger link to the labour market needs. This will improve the outcomes for people with disabilities.

Some of the other measures that were announced in the action plan include additional funding for the Social Sciences and Humanities Research Council, some of which will support research related to the labour market participation of people with disabilities; support for the creation of the Canadian employers disability forum, now officially incorporated under the name Canadian Business SensAbility, as recommended by the panel; and the extension on an ongoing basis of the $15-million-per-year enabling accessibility fund, which defrays the costs of construction and renovations related to improving physical accessibility, including the addition of a workplace accessibility stream.

We want to see the private sector do more. According to a Conference Board survey, in the last 20 years employer investment in workplace training has declined by nearly 40%. This has hit persons with disabilities harder than most, for they often require more training.

Canadian businesses spend about 35% less on workplace training than their U.S. counterparts do. This is why, if we are going to tackle the problem of skill shortages, we are all going to have to pull together. Governments at all levels, employers, institutions, and yes, even individual job seekers are going to have to co-operate for the common good.

In conclusion, I would like to commend the hon. member for Brant for introducing the motion, and I am pleased to have the opportunity to speak today in support of his efforts.

Disability Tax Credit Promoters Restrictions Act

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, it is my pleasure to rise today and conclude the debate on my private member's bill, Bill C-462, an act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

My bill seeks to balance the needs of Canadians with disabilities and promoters alike by also contributing to a fair, functioning marketplace for those who do wish to use the services of a disability tax credit promoter.

Bill C-462 is necessary because changes that were made in 2005 placed benefits receivable on a retroactive basis. This change created a new incentive for those claiming to be consultants to work with Canadians on their applications, as the dollar amounts on a 10-year retroactive tax refund can be significant and can reach $10,000 to $15,000.

Let me be clear: this is not an attempt to crack down on those who are legitimately claiming the credit or to deny claims; rather, it is an attempt to make sure that those who do qualify and those who require the tax credit are able to receive it without paying unfair charges.

The disability tax credit promoters' industry is currently totally unregulated and has produced a system that is increasingly ripe for abuse. In the past, government has determined it appropriate to regulate the tax preparation marketplace. The hon. members for Kings—Hants, Jeanne-Le Ber, and Cape Breton—Canso are concerned that the legislation does not specify what the maximum fees would be or how they would be set. I chose not to set a maximum fee in the legislation because I want to allow for consultations with disability groups, medical professionals, and legitimate tax professionals to help inform this decision. I want to ensure that those disabled Canadians who need help with their applications can get it. We are not imposing unnecessary red tape on doctors or legitimate tax preparers.

I would be pleased to receive direction from tax professionals with respect to the fee level, and I agree with the member for Kings—Hants that the maximum fee should reflect the complexity of the case in hand. We will ensure that the maximum fee structure will be set in an open and transparent process, involving a broad range of stakeholders.

Members of the public and tax credit promoters will also be given a chance to share their views once the regulations are drafted. They will be given plenty of notice so that they can adapt to the new regulations when they come into effect. I know that the hon. members from Montcalm and Abitibi—Témiscamingue also raised concerns about this issue in second reading debate.

As the member of Parliament for Renfrew—Nipissing—Pembroke, which includes CFB Petawawa, I am acutely aware of the effect that disabilities can have on the livelihoods of Canadians. The soldiers of my community are at greater risk for a number of disabilities because of the unique challenges of their duties. My decision to introduce this legislation is a direct result of the aggressive tactics employed by some promoters, who objected to my decision to issue consumer alerts. I started issuing consumer alerts in my riding last year when I found out that some individuals were being charged 20%, 30%, or as much as 40% of the tax credit. Based on the unanimous vote that Bill C-462 received to be referred to committee, I know that other members agree with my concerns.

These kinds of charges are unfair, especially when we consider that the purpose of the disability tax credit is to support Canadians living with disabilities.

I want my constituents and indeed all Canadians to know that they can access their federal member of Parliament for assistance regarding any federal tax credit without being charged a percentage of the credit.

In conclusion, I wish to thank all members for their support of Bill C-462.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I am pleased to rise and deliver the final NDP speech on Bill C-462.

This is an important bill. I would like to thank the member for Renfrew—Nipissing—Pembroke for introducing it. The Standing Committee on Finance reviewed it and asked the appropriate and relevant questions about the bill's scope. Accordingly, it is helpful to be able to conclude the debate with some observations about what happened and some testimony that we heard in the Standing Committee on Finance.

It is important that people know that this bill will limit a consultant's ability to charge fees to help people with disabilities claim a non-refundable tax credit that they are entitled to when they file their taxes. These consultants can play a significant role in helping people with disabilities. A witness from the National Benefit Authority appeared before the committee and made that very relevant point.

However—and I believe that this was acknowledged by witnesses and also members of the Standing Committee on Finance—there are people who are not as well-intentioned who might take advantage of vulnerable people with disabilities to put their hands on a larger share of the refund.

In fact, even in the case of legitimate organizations, commissions of up to 30% of the refundable amount are often charged. That is a problem. I could say that the bill, which I support and encourage my colleagues to support, addresses one symptom of the problem, but not necessarily the cause of the problem.

In fact, there are two reasons for involving consultants in the process. The first, and the one I am most concerned about, has to do with tax simplification. In this case, the tax credit system is complex. People who are eligible for this tax credit are not contacted and informed that they are eligible. They have to find out about it themselves. The form is complex, and that is a problem. This was mentioned many times by different witnesses, including the Canadian Medical Association. When it appeared before the committee, the association asked this question:

...why do vulnerable people need to go to these promoters [or consultants] in the first place? We [the Canadian Medical Association] suggest the disability tax credit form be revised to be more informative and user-friendly for patients. Form 2201 [the form in question] should explain more clearly to patients the reason behind the tax credit and explicitly indicate that there is no need to use third-party companies to submit the claim to CRA.

This is a complex situation. There are several tax credits for which people do not feel the need to use consultants or promoters. They can claim these credits themselves, whether it is a refundable or non-refundable tax credit.

If there are lots of people who are not aware that this tax credit exists, that means there is a problem. This is the second problem. The second problem with this tax credit that will also have to be fixed is the lack of information being made available. A number of my colleagues mentioned the excellent work done by my colleague from Burnaby—New Westminster, who visited various ridings to inform people and let them know that they are entitled to this tax credit. In most cases, we held information sessions for some 50, 100 or even 150 people who learned that they were entitled to this tax credit.

I think everyone agrees that it should be up to the Canada Revenue Agency to inform people, especially in cases where there is insufficient information. However, the Canada Revenue Agency struggles to be able to provide adequate information to the general public. There are several reasons for that, including the Conservative government's decisions dating at least as far back as 2011. The government eliminated a number of regional program advisor positions, which jeopardized the information sessions on various topics, including those on the disability tax credit. It also closed Canada Revenue Agency counters. A counter in Rimouski was closed down. I do not think there are any left in Canada, or at least there will not be any left soon. These are the places where people could go for information directly, or they would employ people who would travel to give different information sessions.

That option no longer exists. The Canada Revenue Agency's ability to provide this information has been significantly reduced. Also, the numbers associated with the budget cuts have already been mentioned a few times. These cuts amount to a quarter of a billion dollars for the Canada Revenue Agency alone, or $250 million. Three thousand people work for the Canada Revenue Agency. The agency's information mandate is therefore at risk, and taxpayers, or the persons with disabilities in this case, are paying the price.

Therefore, there is much to do in terms of information as well as tax simplification. Indeed, regarding the information issue, we received a comment from the representative of the National Benefit Authority, an agency of promoters and consultants focusing on tax credits. He mentioned that his organization spent over $1 million last year to raise public awareness.

As things now stand, private promoters are obviously providing a completely legal and legitimate service. The fact remains that this organization has spent $1 million to advertise its services to the public and receives commissions that could reach up to 30% of the tax credit that the persons with disabilities would get after applying. These persons would have received nothing without this information. In this sense, this government initiative that aims to help people with disabilities struggling with higher costs is a bit problematic.

Once again I would like to acknowledge the member for Montcalm's great work on the issue of persons with disabilities, which raises all these problems, including the lack of accessibility and higher costs for Canadians with disabilities.

We are facing a situation where the government, by failing to do its work to provide information or to simplify taxation, is effectively delegating authority to promoters and consultants. There is some abuse, although this is not generally the case. However, the bottom line is that people who learn about this credit and wish to claim it, but who feel vulnerable and not necessarily equipped to deal with bureaucratic challenges, have to forego up to 30% of the sum they are entitled to.

In that sense, it is very problematic. This form represents a process that lacks transparency. We condemn that. At the Standing Committee on Finance, and here in the House too, we really hope that tax simplification will one day be the subject of a comprehensive study. Someone mentioned a certain form, but this applies to the entire tax system.

The Income Tax Act, which was only about 10 pages long when it was created in 1917, is now over 3,000 pages long. It is really hard to navigate. That is why some lawyers and financial experts work exclusively on tax issues, since they have to be able to sort through all the complexities and the labyrinth created by the Income Tax Act.

I applaud the hon. member's initiative. I will be voting in favour of this bill, and I encourage all members of the official opposition to do the same. However, as I mentioned at the beginning of my speech, the bill deals with only the symptoms of the problem. There are two issues causing this problem: the lack of information available to Canadian taxpayers and the complexity of the tax system, and in particular the form needed for this tax credit.

I urge the government to look very closely at both of these problems, and then to propose alternatives in order to ensure that people receive the money they are entitled to in the form of a tax refund so they can have better lives despite the situation they are in.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to speak today to Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act. This is an important issue for me. I think that a significant part of the work I do as a member of Parliament is to ensure that my constituents receive at the very least the government services they are entitled to.

I would like to provide a brief background as to why we have reached this point. The non-refundable tax credit allocated to persons with disabilities can go up to $1,380 per year. It is given to people with a severe and prolonged impairment of physical or mental functions. This amount includes a supplement for persons under 18 years of age. To be eligible, persons with disabilities must have a form filled out by a health care professional such as a doctor, optometrist, audiologist, occupational therapist, psychologist or speech therapist. This form may be submitted at any time.

In 2005, the government changed the eligibility criteria for the disability tax credit by allowing the tax credit to be claimed retroactively. At that time, promoters started offering services to taxpayers in order to help them maximize their tax credit and refund. It later became clear that some unscrupulous promoters were abusing the system by making false entries in order to maximize the fees they could charge their clients. In addition to false entries, there are cases where promoters charged their clients fees equal to up to 30% of the refund. It is despicable that these people are profiting from the misery of the most vulnerable in this way.

Basically, there are two problems: the misleading entries and the high fees charged by promoters to fill out the disability tax credit request. Bill C-462 addresses the first problem by prohibiting promoters from charging more than an established maximum fee, which will be established by the Governor in Council. The bill also addresses the problem of fraud by establishing that any promoter who makes false or deceptive entries will be subject to fines ranging from $1,000 to $25,000. These are offences under the Criminal Code and can lead to a criminal record.

Although I support this bill, which seeks to crack down on fraud and set fee ceilings for those who help people with disabilities claim these tax credits, I would like to point out the irony of this situation. The question we should be asking ourselves is this: why do vulnerable people have to call upon this type of specialist to receive a tax credit?

I think that the disability tax credit application process is simply too complex. It is not right that taxpayers, particularly those living below the poverty line, have to turn to tax experts, accountants, tax preparers or other third parties in order to have access to the money that the government owes them.

In committee, Dr. Karen Cohen, the chief executive officer of the Canadian Psychological Association, criticized the complexity of the process for claiming the tax credit. She said:

The Canadian Psychological Association supports this bill....However, it is important to address what might be the underlying cause driving the use of promoters. If it is indeed the lack of clarity for taxpayers and health practitioners, then the criterion certificates themselves should be revised to enhance the fairness of assessments.

Gail Beck, a member of the board of directors of the Canadian Medical Association, proposed amending the form. She said:

We suggest the disability tax credit form be revised to be more informative and user-friendly for patients. Form 2201 should explain more clearly to patients the reason behind the tax credit and explicitly indicate that there is no need to use third-party companies to submit the claim to CRA.

Carmela Hutchison of the DisAbled Women's Network of Canada reminded the committee that the Canadian government needs to do a broader review of tax measures for people with disabilities in order to create greater access and fairness. She proposed the following, and I quote:

Streamlined process and strategy should allow people to have greater access to programs, clear policies, and forms available online to create savings that can be directed to increased benefits and programs for disabled people.

She added:

Make the Canada pension plan disability program, disability tax credit, and other federal government forms ones you can save as you work through them.

Review the “other qualified professionals” list of who can sign a disability tax credit application. Prohibit billing above a set amount for forms for any provincial, federal, or municipal government program by either professionals or for-profit companies. Protect people from exploitation and outright financial abuse by ensuring some standards for industry promoters and financial advisors of people with disabilities.

That is quite the list of suggestions, but she is right. Instead of tinkering with legal measures that apply to promoters of the disability tax credit, the government should be conducting a more comprehensive review of the taxation of persons with disabilities.

The red tape people have to cut through to access to the disability tax credit reminds me of the guaranteed income supplement. When I arrived at the House of Commons I was quite shocked to learn that 160,000 seniors who were eligible for the GIS were not receiving any benefits because the Liberals and Conservatives had bothered to contact them.

The problem was identified in 2001, but the government insisted on maintaining its red tape. It is estimated that, for the whole of Canada, this helped the government generate savings of $300 million on the backs of its poorest seniors.

In March 2012, I proposed amendments to the Old Age Security Act to provide for automatic enrollment for the GIS. My bill forced the federal government to take the necessary steps to reach recipients. A few weeks after I introduced my bill, the government finally picked it up and proposed a proactive mechanism to contact eligible seniors.

I am pleased to see that this problem is finally being resolved. If I was part of the solution, then so much the better. Similarly, I think it is time to address the problem of the disability tax credit. It is time to make the application process easier. We could also change the criteria for accessing the program because we hear many horror stories about people with disabilities being victims of dubious administrative decisions.

In October, my colleagues from Argenteuil—Papineau—Mirabel and Burnaby—New Westminster and I organized two information sessions about this. There was a turnout of about 60 people who wanted to learn more about this tax credit. They all complained about how complicated and unclear the process for getting the credit is.

I do not see why people cannot get proper assistance from officials. We see that, more and more, the Conservative government's cuts to the Canada Revenue Agency and other parts of the public service are having a real impact on the services provided to Canadians and those provided in my riding.

Cuts to the public service have two consequences. First, they are felt on the front lines. Eliminating CRA regional program advisor positions jeopardizes information sessions on the disability tax credit. Those information sessions are normally given by public servants. Now NDP members of Parliament are having to take on that job. This sort of thing should not be happening.

Closing Canada Revenue Agency counters throughout the country also penalizes people with disabilities because they often need to meet with an advisor. It is high time the government reviewed its budget cuts and stopped saving money at the expense of the disabled and those most in need.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, before I start my comments, I should clarify something. I think the member for Cape Breton—Canso was a little confused. I know that the member for Bruce—Grey—Owen Sound said that the class of 2000 was rather impressive. However, he also said, and this is where the misunderstanding comes in, that the class of 2004 was far superior. I want to get on the record that the class of 2004 was, in fact, the better of the two.

I am thankful for the chance to outline both the need for and the benefits of this legislation. I really relish the opportunity to demonstrate how our government is working to make a real difference in the lives of Canadians with disabilities by providing them with increased opportunities to participate fully in society. There is no better example of this than the disability tax credit promoters restriction act before us today.

In a nutshell, this legislation is about ensuring the fair and equitable treatment of people with disabilities when it comes to applying for the disability tax credit program. Bill C-462, as it is entitled, does so by making sure that a tax credit intended solely for people facing serious health challenges goes to those individuals and family members who care for them. It would restrict the fees charged by private sector promoters who would profit from their circumstances.

The act's objective is comparable to that of the Tax Rebate Discounting Act, which protects all Canadians filing tax returns from unscrupulous business operators. It places limits on how much a discounter can charge for a discounted income tax refund. However, Bill C-462 focuses specifically on the needs and interests of people with disabilities and their supporting family members who rely on this tax credit. It recognizes the impact of disability-related costs on an individual's ability to pay tax and it would lessen the tax burden. Its intent is to curb the practice of charging outrageously high fees for services offered by promoters who help such individuals to fill out a small part of the application form, which is just a very small part of the process.

Let me explain just how grave this problem is and why we must act.

The Canada Revenue Agency, the CRA, receives an average of about 200,000 applications for tax credits each year. Of this total, it is estimated that as many as 9,000 of these requests received from taxpayers use the service of disability tax credit promoters. One needs to appreciate that the Income Tax Act allows someone with a disability who meets the criteria to request a reassessment dating back 10 years when applying for the disability tax credit program. This means, of course, that if the individual claim is successful, someone with a disability could get an income tax refund as high as $10,000 or $15,000, or even higher. I have seen them higher than that.

While this is good news for people who need the financial support to help defray the cost of therapies, medications, and other supports for the basic activities of daily living, not all of this money necessarily ends up in the pockets of the people who have the disabilities. That is because some promoters charge contingency fees as high as 30% and 40% of the tax refund. Even a 30% fee means that a refund going back a decade could yield a promoter a cheque between $3,000 and $4,500 just for filling out a few lines on an application form. That money is intended for Canadians with disabilities and the family members who care for them, not tax promoters who fill out a simple form that requires little or no effort.

As several speakers have already noted, CRA provides a wide array of information and assistance related to the application and adjustment process for the disability tax credit program. CRA telephone agents can help to demystify the process and explain how the form needs to be filled out. As mentioned, many members of Parliaments' offices are also helpful.

Instead, people are often told by promoters that they have insider knowledge. Ironically, these promoters also suggest that only they can ensure that people who may be eligible for tax credits will receive all the money to which they are entitled. That is quite a claim, given that the promoters expect to receive such a high percentage of the eventual refund.

At the moment, there are no provisions in federal legislation to prevent or restrict such practices. That is why we need Bill C-462: it would put an end to these ethically questionable business practices. At the same time, it would support a functioning marketplace for those with disabilities who choose to use the services of a disability tax credit promoter.

Certainly there are many legitimate businesses that provide a valuable service to the people who want help in applying for tax credits. We do not have a problem with that, but that is not what we are addressing here with this bill. We are not out to stop anyone from providing services as long as the fees are reasonable.

The provisions in this proposed legislation are designed to make sure that people with disabilities will not be charged excessive rates. We want to protect them from anyone who tries to capitalize on their tax credit by shortchanging them.

Equally important, the bill would assist caregivers by reducing the cost of applying for the tax credit so that they can redirect that money into helping the people in their care.

This proposed legislation is a clear demonstration of our government's pledge to ensure the sound use of public finances, as it would put an end to the days of paying out millions to tax promoters instead of providing funds to people with disabilities who really need the help.

The provisions in Bill C-462 would also serve as a deterrent, since any firm that tries to skirt the new rules would face harsh penalties in the future. These amendments would restrict the fees that could be charged or accepted by promoters for preparing a disability tax credit application on behalf of someone with a disability.

A maximum fee would be established under the disability tax credit promoters restriction act, and anyone who failed to respect the fee would face penalties. A minimum penalty of $1,000 would apply when the maximum fee is exceeded.

Exactly what the maximum rate should be would only be determined following public consultations. The discounter and tax preparation industry would definitely be a part of the consultations when the maximum fee is established through the regulatory process.

Another important feature of the bill is that it would require promoters to notify the CRA when more than the maximum fee has been charged. Failure to inform the agency when an excess fee is charged would be an offence and result in a $1,000 to $25,000 fine.

There is no shortage of sound reasons to back the disability tax credit promoters restrictions act, and there are countless good reasons to give it all-party support. None is more important than the fact that we will be looking out for the hundreds of thousands of people with disabilities who apply for the disability tax credit each year, ensuring that their needs and best interests are met.

Bill C-462 would ensure the fair and equitable treatment of Canadians with disabilities, providing them with the same protections other Canadians enjoy thanks to the Tax Rebate Discounting Act.

The legislation would provide assurance to qualifying Canadians with disabilities that they will receive the full amount of financial support to which they are entitled. How could any parliamentarian not agree with that?

In my riding, one of my staff, Sue Dingwall, has been devoted to helping people with the disability tax credit program. In the last four years, this staff member has helped people with disabilities receive over $8 million. Close to 2,000 people in my riding have received $8 million as a result of Sue Dingwall's efforts; if these fly-by-night operators were preparing those tax returns, disabled people would have lost maybe $2.4 million of that $8 million. This money belongs in the pockets of those poor people on disability and the people who care for them.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I am pleased to rise today to speak on Bill C-462, and I want to thank my colleague, the member for Renfrew—Nipissing—Pembroke, who is a fellow member of the class of 2000. I know many in the House, my colleagues from Brant and Bruce—Grey—Owen Sound, have remarked on a number of occasions that the class of 2000 was probably one of the strongest and most capable collection of members of Parliament to come to the House in generations. I thank them for that.

The member's bill is certainly well-intentioned. I want to congratulate her on it. The bill seeks to restrict the fees that consultants can charge disabled Canadians who need help with applying for the disability tax credit.

It seems that since 2005, a cottage industry of consultants has sprung up to help Canadians apply for the disability tax credit. Although many of these businesses are legitimate and provide a useful service, there are some that are charging outrageous fees to help guide people through the application process.

I agree with my colleague that it is important to protect persons with disabilities from being taken advantage of like this. Therefore, as with many of my colleagues from all parties, I will be supporting this bill, as I hope my Liberal caucus colleagues will as well.

However, I want to spend some time speaking about some of the shortcomings of the bill. It has some flaws that give me concern, and I believe they should be corrected. I would also like to talk about the reason the bill is needed in the first place and how additional steps are needed to fix the problems. Finally, I would like to talk about a note of caution. The disability tax credit is essential to many support programs for people with disabilities, so we need to ensure these changes would not make it more difficult to get help when they need to apply for this credit.

My first area of concern is that the bill may be too vague. The bill does not make it clear who exactly would be affected by the new regulations on charging fees. Right now, there may be a risk that legitimate accountants, tax filers, or doctors could accidentally be hurt by the bill.

In the submission of the Canadian Medical Association, for example, it noted that:

as currently written, Bill C-462 proposes to apply the same requirements to physicians as to third-party companies if physicians apply a fee for form completion, a typical practice for uninsured physician services.

As the CMA points out, there are already guidelines for these types of physician fees in provincial and territorial medical regulations.

The member says her proposal is targeted at third-party promoters other than normal tax preparers and accountants. In order to ensure the legislation would only affect the right people, it needs to be made more clear.

On a similar note, although the bill seeks to put a cap on how much consultants can charge to help file for the credit, the bill does not make it clear how high that cap would be. The finance committee has heard that the CRA would be in charge of setting the level for the fee cap, but CRA staff were unable to give the committee any idea of how high or low that level might be.

I understand the member wished to avoid including specifics so that the CRA could consult with stakeholders before setting an appropriate cap. While I understand and appreciate her concern on this point, it is nonetheless difficult for tax filing professionals to plan ahead if they do not know whether, or by how much, their fees would have to change. In order to ensure that legitimate businesses are not hurt by the bill, the text must be more clear about unfair fee levels.

My second concern is that the bill would not tackle the root of the problem and may reduce the ability of persons with disabilities to access programs designed to support them.

Although I believe the member has proposed this bill with the very best of intentions, we must be sure that it would not have the unwanted effect of reducing the amount of disability tax credits that Canadians claim. As we know, the cost of this tax credit to the treasury has grown quite a lot in the past few years. Some consultants may be abusing the system, but we must keep in mind that others are clearly successful at ensuring that Canadians with disabilities get access to the money they need and deserve. It makes sense to restrict the fees consultants can charge to help with the tax credit; no one should be taking advantage of people who live with disabilities. However, we must ensure that by restricting these fees we do not also restrict disabled Canadians' access to this tax credit.

The fact that these consultants exist in the first place suggests that it is hard to file for this tax credit. The Canadian Medical Association noted in its submission that it was:

...concerned that one of the reasons individuals may be engaging the services of third-party companies is a lack of awareness of the purpose and benefits of the Disability Tax Credit. Additional efforts are required to ensure that the Disability Tax Credit form be more informative and user-friendly for patients.

Therefore, I want to call on the member to address this issue. The process to apply for this tax credit should be made simpler and the cuts to CRA staff should be reversed so that people struggling with the application process can get the help they need without having to pay through the nose for it.

This brings me to my third point. It is important to make the disability tax credit easy to access because applicants have to be eligible for the tax credit in order to qualify for a number of other support programs. Representatives of the Council of Canadians with Disabilities said in their submissions:

The Disability Tax Credit was initially designed as a tax fairness measure recognizing that people with disabilities have additional disability-related expenses. Disability Tax Credit eligibility is now the determinant for accessing other benefits and programs....

Some of these other programs include the registered disabilities savings plan, the disability tax credit benefit, the working income tax benefit for persons with disabilities, and the disability accommodation benefit. As we know, it also spills into a number of provincial programs; certainly it does in Nova Scotia.

Because of a number of benefits and the fact that individuals can back-file for up to 10 years, there is a huge amount of money available to people who qualify for this credit. The disability tax credit really is a gatekeeper for disability benefits, and qualifying for the credit can mean tens of thousands of dollars in relief for a disabled person. We need to ensure that whatever changes we make do not prevent people who need help from filing for the tax credit and getting that help. We do not want to set out to help persons with disabilities only to end up hurting them in the end.

The bill seeks to prevent some consultants from taking advantage of persons with disabilities, but there is a risk that this legislation, if not applied properly, could also prevent legitimate consultants from doing their job. That would be like throwing the baby out with the bathwater.

In conclusion, it is important to me that we make sure that disabilities do not get in the way of people living a full and happy life. Disabilities impose extra costs on those involved. Because of this, Canada has a number of programs designed specifically around the disability tax credit. However, it is not helpful to set up a program to help people that makes it so difficult that people cannot access it or that requires them to pay ridiculous fees to consultants to help them through the application.

The bill has good intentions. It may not be perfect, but it is a step in the right direction. I recommend that some parts of the bill be updated so that it would be sure to target problem areas and not negatively affect people. I also recommend that the government look more generally at simplifying the application process for the tax credit. Those are my comments.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Speaker, it is a privilege to stand in the House of Commons to speak on legislation and other matters. The bill on the disability tax credit, which I thank the member opposite for introducing, is a vivid reminder of how important our work is.

Persons with disabilities face many barriers or challenges to live full lives. We have real opportunities, as lawmakers, to make a difference in their participation in communities. There are obvious physical barriers to address for this sector. However, today we address equally important barriers, namely financial barriers. We have an opportunity in our tax laws to ensure fairness, justice and equality for persons with disabilities, who lose significant income that others might be able to earn more easily.

Before speaking directly on this legislation, let me recognize the good work done by our current critic for persons with disabilities, the member for Montcalm, and critic for the Canada Revenue Agency, the member for Victoria. They have been outstanding new members of our caucus and serve their constituencies and critic areas well.

I also have to pay tribute to the extraordinary work done on the disability tax credit by a former NDP critic, the member for Burnaby—New Westminster. He has been legendary, both in our caucus and in the persons with disabilities networks, for crossing the country to facilitate workshops on the disability tax credit. He has been holding disability tax credit workshops for nine years now in his own riding.

I recently read a comment from a person named George, acknowledging how informative these sessions were. George was grateful that he was able, with the retroactive feature, to secure a tax credit of over $13,000. There are thousands of Canadians who have benefited from these seminars.

My own riding staff in Nickel Belt have also done outstanding work, to inform people and then help them navigate the bureaucratic channels to receive their money. My office wants to make sure that every eligible Nickel Belt resident knows how to access this legitimate entitlement under the Income Tax Act.

As we know, many persons with disabilities struggle from cheque to cheque or find themselves below poverty levels. The disability tax credit can amount to up to $1,380 per year and can be claimed retroactively for up to 10 years. It is transferrable to spouses and other family members if the income of the relative with a disability or infirmity is too low. I will talk about some of these cases in a minute.

Our party has made it clear that we support this legislation at the third reading and report stage. We have noted, though, that a study is needed to improve recommendations about the consultants and other equally important issues.

Certainly it is necessary to establish limits on maximum fees charged by promoters. However, the biggest issues related to the disability tax credit are not addressed in this bill. The application process for the tax credit is not transparent and persons with disabilities have trouble obtaining it.

As a northern Ontario member of Parliament, in a vast riding, I know the cuts by the Conservative government to the Canada Revenue Agency have had a real impact on services offered to Canadians. Closures of Canada Revenue Agency offices across Canada discriminate against persons with disabilities who often need to meet with an advisor.

These issues have become clear when I have talked to people in my riding for whom my staff and I have tried to help secure a disability tax credit.

These people have a right to this money, but they are at a supreme disadvantage. My constituents tell me that without knowing how much money they will get, they have to sign an “authorization of representation” form to authorize consultants, such as National Benefit Authority, to represent them. They have all signed the “authorization or cancelling a representative” Canada Revenue Agency form, T1013, which gives permission to the NBA to access their Canada Revenue Agency account. They have to agree to pay a fee of as much as 30% of the money that the firm gets for the constituent.

The amount of the credit and the refund is complicated by whether the constituent has taxable income or might be transferred to a spouse.

When helped by my staff, people have shared how upset they were when they realized they could have come to my office in the first place, received the assistance and not had to pay the consultancy fees. In one case a woman was eligible for DTC in the amount of $4,800, but the firm took $1,600 which left her with $3,200. If she had not gone with the firm, she would have received the entire amount.

Some of these firms advertise in local newspapers, asking people with disabilities to go to them for help. People go, not knowing that they are being charged for their services. If they had only gone to the MP's office, they would received all of these services for free.

Another constituent who had been getting the DTC was disqualified without any real explanation and could not talk to a person at CRA. This is not right for anyone, but especially for the elderly or disabled. They want to talk to a person.

Many Canadians try to contact the CRA, but it is increasingly more difficult. They get a message on the telephone asking them to press one, press two, or “Sorry, you pressed the wrong number, so you have to call back“. This is as equally frustrating for people with disabilities as for seniors. This has become a real problem for so many folks trying to access help from the Canada Revenue Agency.

In the north, we have seen cuts to offices that now have fewer people, and since the decision in 2012 to have no direct dealing with people, there have been more and more frustrated constituents. The 1-800 and Internet services can be extremely frustrating, particularly for people who already face enough barriers in their lives.

Sometimes government offices advise people to visit my MP office for assistance. Imagine going to a government office and because of all of the cutbacks to Service Canada that the Conservative government has made, the people who work there will advise that they would get better and faster service at their MP's office.

The Government of Canada is missing in action. Imagine the Government of Canada not being in the business of serving Canadians, but downloading and off-loading to the offices of MPs. The government is missing in action in northern Ontario. Missing persons posters for the Government of Canada could be put up in post offices with what the Conservatives have done to government services.

Another problem is when a doctor refuses to complete the application. We have had three cases where people have been told by their doctor that they do not qualify and who would not complete the form. In one case the person had the DTC previously, but the doctor refused to complete the form. The person did not then feel comfortable going to another doctor.

Let me elaborate on the circumstances of this person. He had been collecting DTC for many years, but had to reapply and get the doctor to re-sign the forms. This gentleman, whom I know quite well, is obviously disabled. He has one arm shorter than the other and is blind in one eye. Yet the doctor figured he could get a job.

This is something that has to be done. I do not know why some doctors act this way. I think it should be up to the CRA, especially when a disabled person is already collecting DTC.

In 90% of the cases regarding DTC and CRA, people had to go back to their doctors for more information or clarification. Quite a few of the DTC cases went to the review level to provide additional information. This process can take up to one year before they receive any information.

Carmela Hutchison, president of the DisAbled Women's Network of Canada, the Council of Canadians with Disabilities and the DisAbled Women's Network of Canada support the objectives of Bill C-462 and agree that persons with disabilities are fully entitled to protection from the unreasonable fees being charged by financial promoters.

We want real support for this program and better protection against financial abuse and therefore we want to impose restrictions on the fees charged by promoters to people with disabilities.

Let us get this right. Let us fix the problem with DTC. Let us simplify the application process to make it more accessible for persons with disabilities. Let us reverse cuts to the CRA and provide it with necessary resources to provide information sessions on the—

The House resumed from October 24 consideration of the motion that Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act, be read the third time and passed.

[Stella Ambler, Conservative, Mississauga South, ON]

Mr. Speaker, I am proud to stand behind my hon. colleague's private member's bill.

The member for Renfrew—Nipissing—Pembroke has performed a valuable public service by drawing attention to the dubious business practices of some tax promoters, people who would take anywhere from 20% to 40% of the disability tax credit for which someone with a severe disability, individuals facing serious health challenges who need our financial support, has qualified.

The legislation is not only a tribute to her but to all parliamentarians who have recognized its merits and enabled the legislation to move quickly through the approval process. We must now take it to the next step and make sure that Bill C-462 becomes law, because all Canadians, including those with disabilities, expect us as their duly elected representatives to defend their interests. As the disability tax credit promoters restrictions bill makes clear, Canadians with disabilities applying for the tax credit are not always treated fairly at the moment.

In recent years, the Canada Revenue Agency has witnessed a growing number of businesses promoting their services to individuals with disabilities and their families who want to apply for the disability tax credit. Some of these businesses are focused almost solely on completing the application form. These companies normally provide their services on a contingency fee basis, and those fees can run up to 40% of the amount of the individual's income tax refund.

Parliament brought in this tax credit, recognizing that Canadians with disabilities can face serious challenges and exceptional expenses for which they should receive tax relief. The tax savings can make a meaningful difference in their quality of life. It is appalling that roughly $20 million a year, earmarked for people with disabilities, instead ends up in the pockets of the private sector tax promoters who helped them to prepare these claims.

By any calculation that is a lot of money to complete part A of an application form to obtain the disability tax credit certificate, something that the person applying for the credit or someone in his or her family can generally do without assistance. The CRA has put all of the forms and instructions on how to complete them on its website. They have a call centre that will help, and similarly constituency offices such as mine are only too happy to help guide people to the right resources, free of charge.

I would love to say more because I know this is a great bill. We are all very concerned about it. It is clear why it has been unanimously supported in the House. It is just simply a good bill.

Let me be clear, the legislation is not an attempt to crack down on people who are legitimately claiming the credit nor is it an attempt to deny anyone's claims. Let me be equally clear that our goal is not to hinder legitimate businesses. Most do good tax preparation work and are charging reasonable fees. Bill C-462 would apply only to those who try to take advantage of Canadians with disabilities by taking an unreasonable cut. With Parliament's endorsement, we can ensure that the disability tax credit goes to the person for whom it was intended.

I trust that we can count on all parties' support to pass this necessary legislation.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Mr. Speaker, I rise to speak to Bill C-462. From the outset, I would say that I support the bill put forward by my hon. colleague, which aims to cap the amount of fees an individual, an organization, or a company can charge people who are claiming or using the instrument of the disability tax credit.

The tax codes, the fiscal pages that govern this country, are large and many. One cannot blame individuals who feel that they need a hand in deciphering some of that information in order to use the various instruments and tools available to them to maximize their tax dollars and maximize their ability to make ends meet, especially in the case of people who are living with disabilities and the families that care for them.

The disability tax credit works for Canadians. It is something that, unfortunately, too many Canadians do not know enough about.

The only issue I have with Bill C-462 is that it does not go far enough in identifying and fixing some of the problems that lead to this need for disability tax credit promoters or agents. We need to take a look at that.

We all try to do the best we can for families. The people who stand in this House and work every day for their constituents are here because they believe in working for their constituents. In February, for example, I held a forum in my riding to give my constituents the information and tools necessary to apply for the disability tax credit. My colleague from Burnaby—New Westminster came and lent his expertise to the discussion. I had a very good turnout for that forum. As a result, I received word that a number of individuals who attended were able to apply for the disability tax credit and were eligible for some sizeable amounts of money retroactively due to that information.

That takes me to the crux of my discussion, which is that we, as the government and members of this House, need to put more emphasis and more energy into informing individuals about the need for promoters and agents who claim to be there to help individuals navigate the pages of the disability tax credit. I am sure that many are legitimate and are there to legitimately help individuals. However, as in every situation, a few bad apples give the practice a bad name. The need for these agents is the question I have. Why is it that the government, we as members of Parliament, are not giving our constituents the information they need to apply for those disability tax credits?

During the course of the months following the forum I gave, individuals would call my office, and my staff were able to help them fill out some of the forms or point them in the right direction as to what they should be doing. This is something I think is lacking with respect to this bill. It is one thing to say that we will cap the fees and that agents or promoters who violate those caps would be in trouble. It is another to provide the means, the opportunity, and the information Canadians need to not have to avail themselves of promoters and/or agents in this area of disability tax credits.

The other side of that is the cuts. Even though the government is claiming that the cuts to the CRA services available to Canadians to get the help they need are not affecting Canadians, is not true. Canadians are having a harder time getting in touch with the agencies to be able to get the information that they need, to navigate the pages, be it the tax act, employment insurance, Service Canada, Canada Revenue Agency. Canadians are having a harder time getting that type of information. It creates a false need for these promoters and agents, particularly in the disability tax area.

This opens the door to people charging exorbitant amounts for their services, as was said in the House previously. Some 30% to 40% of the moneys that are due end up going to certain types of promoters and certain types of agents. It behooves us as members of the House and as the government to make sure that Canadians have the information that they need in terms of instruments such as the disability tax credit, so they do not have to lean on outside or private interests to help them.

I stand in support of the heart and soul of the bill, but I take issue with the fact that the maximum amounts were not identified at committee. Will the government let the legitimate members of the community who are out there trying to help people make the best of the disability tax credits know? How will they know what those caps are? How will they know if they are crossing the line? On the other side of that coin, how will people who are claiming disability tax credits and looking for the help of these agents and promoters know what their rights are in terms of what can be charged to them?

Again, I stand in support of the bill and it is a step in the right direction in regard to protecting consumers from opportunistic individuals or organizations, but it can go a little further. It begs the question, what more can we do as the government? What more can we do as members of Parliament to make sure that our constituents and Canadians know what their rights are and know how to access instruments such as the disability tax credit?

I will use my last 30 seconds to thank the Speaker for his ear. It is a pleasure to stand in the House and speak to a bill such as this.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Mr. Speaker, I am pleased to rise this evening. I welcome the chance to add my voice in support of this commendable legislation. Bill C-462 builds on our government's strong record of supporting the full and equal involvement of those with disabilities in every aspect of Canadian society.

As the House knows, we work to ensure that our legislation, policies, programs and services are inclusive of people with disabilities and that they fully respect their rights and interests. The Government of Canada provides a variety of services and financial benefits to assist people with disabilities and their families to make this goal a reality.

For example, our government offers a range of generous tax credits and benefits for Canadians with disabilities. These important measures are among the many ways we are advancing our government's plan for jobs, growth and long-term prosperity that is working for Canadians, even as they face challenging times. We also strive to promote positive attitudes and raise awareness of the needs of Canadians with disabilities in order to prevent unintended negative outcomes. The House need look no further than Bill C-462 for the evidence of that.

When the hon. member for Renfrew—Nipissing—Pembroke discovered that some of her constituents with disabilities were being charged excessive fees by tax promoters to apply for the disability tax credit, she took action to put a stop to this abusive practice. It is thanks to her perseverance and diligence that we have this legislation before us today.

As parliamentarians know, the disability tax credit is a non-refundable tax credit. It reduces the amount of income tax that either individuals with disabilities or those who support them have to pay. It may help compensate for the cost of additional expenses, such as special equipment, medications and treatments. Eligibility is not based on the diagnosis of any specific medical condition, but is based on the effects of the conditions on an individual over a prolonged period of time.

To be eligible for the tax credit, the person must have a severe and prolonged impairment in physical or mental functions. It must restrict the person in one or more of the basic activities of daily life or cause the person to take an inordinate amount of time to perform the activity, even with the appropriate therapy, medication and devices. This needs to be verified by a qualified practitioner, medical doctor, optometrist, audiologist, occupational therapist, psychologist, physiotherapist or speech-language pathologist.

Hundreds of thousands of Canadians with disabilities and their family members who care for them count on the disability tax credit to help them improve their standard of living and quality of life. The CRA receives an average of 200,000 new disability tax credit applications each year. It is estimated that approximately 9,000 of these requests are received from taxpayers who use the service of a disability tax credit promoter.

In too many cases, the people who really need this tax credit do not get their fair share of the eventual tax refund. The problem is not with the tax credit, as others have explained. The issue is that there are some private sector companies that appear to have no compunction about cashing in on this tax benefit, which is intended for Canadians with disabilities, for their own benefit. There have been numerous cases brought to our attention in which promoters have charged 30% to 40% of the amount of the person's income tax refund. We are talking about thousands of dollars in fees for something that is very simple to do.

These businesses generally just complete part A of the disability tax credit application form, a straightforward process that usually takes little time. Aside from being reprehensible, this is first and foremost unnecessary. If someone with a disability or a family member providing care needs extra help completing the forms, the Canada Revenue Agency has agents who specialize in this disability tax credit. We have heard from others that this is not the case but, in fact, it is. They are just a phone call away and can assist both taxpayers and qualified practitioners by providing information on both the criteria and the application process.

There is simply no reason for people who really need and rely on the tax credit to give up a large percentage of it to a third party tax promoter who expects a large of the eventual tax return. With this bill, we are sending a clear signal that the price Canadians with disabilities pay for this service should reflect the real value of the services they receive.

Once it receives royal assent, Bill C-462 would restrict the amount of fees that can be charged or accepted by businesses that request a determination of disability tax credit eligibility on behalf of someone with a disability. This legislation would prohibit firms from charging or accepting more than an established maximum fee.

What that fee would be would only be determined following consultations. To discourage companies from overcharging their clients, the bill would also require businesses to notify the CRA of any fee charged in excess of the maximum amount permitted. If they persisted, they would face fines of $1,000 to $25,000 for not notifying the CRA or for any false or deceptive statements. A separate fine equal to 100% or 200% of the excess fees could also be applied in addition to the penalty. Such fines would be applied in serious cases, such as repeat offenders.

Members should not get me wrong: we are not trying to interfere with the free market and we have no intention of hurting legitimate businesses that charge reasonable amounts consistent with the value of the services that they provide. Our goal is simply to ensure that when Canadians with disabilities are eligible for the tax credit, especially if their claims go back many years, they receive the maximum amount that is due to them. This is consistent with our government's approach to ensuring that Canadians with disabilities are treated fairly, equitably, and with the dignity they deserve.

This legislation is a clear demonstration of our determination to support the full and equal involvement of those with disabilities in every aspect of Canadian life. I am sure no member of the House would argue with that aspiration.

Therefore, I urge all parties to lend their support to Bill C-462 so that we can take this legislation through its final stage and make it the law of the land. Members can be sure that people with disabilities in their ridings will thank them if they do.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I rise tonight to speak to Bill C-462. The purpose, obviously, is to restrict the level of fees that can be charged by promoters of the disability tax credit.

Since 2005, disabled Canadians have been able to claim this credit retroactively for up to 10 years, which can result in significant lump sum payments. Reports of consultants exploiting disabled Canadians and charging exorbitant and in some cases extortionate contingency fees in connection with these large, retroactive claims provide some of the reasoning behind the bill. Disabled Canadians ought to be protected from exploitation, clearly. Consultants who abuse the system and commit fraud ought to be punished under the law, so I support the intent of the bill.

I do have some reservations. My biggest concern is that the legislation may have identified the wrong problem, because while the bill establishes the need for introducing penalties against fraudulent consultants and protection for those exploited, a key question ought to be asked. Why do these consultants exist in the first place? It could be argued that the reason they exist is that there is a need created by an application process that is too complex, and that governments have failed to provide disabled Canadians with the resources they need to fill out the forms themselves. This is also in the context of times when we are cutting government and front-line services, which could actually help disabled Canadians complete these forms.

If the government is serious about helping disabled Canadians and stopping the alleged proliferation of these consultants, it ought to simplify the disability tax credit application process, and hire and train government workers in sufficient quantity and with sufficient expertise to help Canadians who have questions and need help with this process. This way more disabled Canadians who are entitled to these benefits would be able to fill out the forms themselves, and that would eradicate the need for these consultants in the first place.

The legislation in its current format does not address this central point, so I emphasize that I support the intent of Bill C-462 and recognize the importance of protecting innocent Canadian citizens from exploitation by consultants who abuse the system and charge usurious fees for their services.

I will outline a few of my reservations. First and foremost, there is a lack of information and detail within Bill C-462, and that is quite often the situation with private members' bills. Private members do not have the same kind of legislative or research capacity in working to develop legislation that, for instance, governments have.

However, the legislation in its current format does not specify what the maximum fees would be or how they would be set. That would be defined, perhaps, in the other place or perhaps in the regulatory process. Surely this ought to be a key element of the legislation as the aim is to restrict fees.

This vacuum of information leaves a number of questions unanswered and potential unintended consequences. For instance, how does the government propose to measure the fees? What services would be covered? What services would fall outside of the maximum fee structure? Would the maximum fee be set as a percentage of the tax credit or as a percentage of the tax refund, or would the maximum be set in absolute terms? Is the maximum to be set as a percentage of the tax benefit? How many years would be factored in or count towards that maximum? Would it be just the year of the application or would the government consider the value of the benefit over a number of years, for instance, the net present value of that future revenue stream? In setting the maximum fee, would the government differentiate between different applications, such as whether they are complicated, time-consuming or taken to appeals? If so, how would the government make that differentiation?

With some applicants claiming retroactively for up to 10 years, there could be complications within their application. The maximum fees set out in the regulations ought to reflect the complexity of the case in hand. The industry may be too complicated for a one-size-fits-all policy and the maximum fee structure ought to be set in an open and transparent process with a broad range of stakeholders.

Second, qualifying for the disability tax credit also qualifies people for other programs such as the registered disability savings program. Once they receive a disability tax credit certificate, they can remain eligible for the tax credit for several years. Therefore, the maximum fee structure that only considers the value of the refund for one year may not reflect the actual value that the applicant places on qualifying for the additional disability tax credit certificate.

For this point, let me illustrate with one potential example. Let us consider the amount of a disability tax credit in 2013 for an adult. That would be 15% of $7,546, which would be $1,131.90. Therefore, if the government is not willing to simplify the complex application process for disabled Canadians, some will continue to depend on the expertise of consultants. If the 5% fee cap is introduced, as has been suggested, the maximum amount a disabled Canadian could pay for expertise in applying for the tax credit could be as little as $56.60. However, the real reason the applicant may want to qualify for the disability tax credit is to be eligible for tens of thousands of dollars in RDSP bonds and matching grants from the government. Regardless of the amount people are likely to receive from just this one disability tax refund, some will take their claim to the appeals process in order to gain access to all these other programs and benefits.

Poor regulations that could flow potentially from Bill C-462, regulations that would have a narrow view of the tax credit, could have some unintended consequences, for instance, of preventing disabled Canadians the help they need to access government programs. We should acknowledge that there are businesses which provide very legitimate and valuable services to help disabled Canadians access these programs. I have heard from some of these types of operators who have certainly convinced me that what they are doing is legitimate and they are concerned that potential unintended consequences could render their businesses unprofitable if we did not consider some of their concerns in the design of this legislation. Again, I believe these are legitimate businesses.

The regulations under Bill C-462 must ensure that these legitimate businesses remain financially viable under this model. We must not punish these legitimate businesses because of the exploitative actions of some of the other operators who are taking advantage of this system.

One of the key reasons for the hiring of consultants, again, is the complex application process, which leads me to a point that right now the process is so complex that some Canadians feel like the only option available to them is to hire a consultant to guide them through. Therefore, we ought to make it easier for legitimate applicants to access the program themselves. After all, it is a program to which they ought to be entitled and, as such, why should they need an outside consultant simply to deal with their own government and access a program for which they qualify? The government should streamline the application process. It should hire and train more government workers who can answer the questions and help disabled Canadians apply for these credits themselves.

This is not just an issue of disabled Canadians and their interface with government. We have gone toward more automation, less personal interaction, less individually tailored services for Canadians dealing with their government and this is something we have to consider for seniors and for disabled Canadians.

In summary, we agree that disabled Canadians need to be protected from exploitation, but we also believe that there are other things the government could do through simplifying the process and ensuring that we have front line public servants who are providing these services and helping disabled Canadians interface with the government and access the programs not only to which they are entitled, but the programs they need.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

moved that the bill be read the third time and passed.

Mr. Speaker, thank you for the opportunity to once again outline the necessity and the benefits of the disability tax credit promoters restrictions act, a crucial step toward ensuring the fair treatment of all Canadian taxpayers. It is vitally important that we see Bill C-462 through to completion as quickly as possible so that we can better protect disabled Canadians from the predatory practices of some disability tax credit promoters.

I also wanted to say how extremely proud I am that this act has achieved such widespread support from parliamentarians and from the many Canadians who appeared before the Standing Committee on Finance, which held public hearings regarding this legislation.

The fact that my bill has the support of all parties reinforces something that all members of Parliament recognize. We must take action to solve the problems caused by those individuals who seem willing to take advantage of Canadians with disabilities. Whatever our political affiliation, we realize that Canadians living with disabilities face exceptional challenges. We understand that the last thing they need is to see an important source of additional income reduced by tax promoters who would profit from these very challenges.

Of course, I am not suggesting that all of these businesses deserve such hard criticism. This legislation is not directed toward legitimate tax practitioners who provide a valuable service. Make no mistake; this bill is all about going after those whose intentions are not so honourable.

Before highlighting the important improvements we propose to make, let me remind the House of the purpose of the disability tax credit. It is meant to assist Canadians if they are unable to perform one or more of the basic activities of daily living, not occasionally, but all of the time or substantially all of the time, even with therapy and the use of devices and medication. The restriction must be expected to last continuously for at least 12 months and must be present at least 90% of the time. The kind of basic activities of daily living I am referring to include things like speaking, hearing, and feeding oneself.

The disability tax credit is meant to help offset some of the additional costs people incur to enable them to perform these everyday functions. Based on 2012 numbers, the federal tax savings for someone eligible for the disability tax credit was up to $1,132 for adults and as much $1,792 for children under the age of 18 or for a family member supporting the person.

It is important that Canadians living with a disability have access to all the support they need. When taxpayers apply and qualify retroactively, they can receive anywhere from $10,000 to $15,000. This represents a significant amount of money. It is important to ensure that these funds remain exactly where they belong, in the pockets of Canadians living with severe disabilities.

The significant sums of money involved created an incentive for a new class of third-party promoters to assist Canadians with disabilities with their claims. These higher numbers spawned a whole new industry of disability tax promoters. These businesses help people fill out just the first part of the tax form to qualify for the disability tax credit, often at a very steep price. We have seen some inordinately high fees charged to people who use tax promoters' help to qualify for the tax credit.

There have been cases of Canadians with disabilities being charged as much as 35% to 40% of the total amount they were due. That can add up to thousands of dollars for something that is really quite simple to do. Let us remember that these businesses generally just complete part A of the disability tax credit application form, a fairly straightforward process; the more important section of the application form, part B, must be completed by medical practitioners before a claim can be processed.

I first became suspicious about all of this a few years ago when I came across a tax credit promoter who told me he had spent $25,000 booking space, a hotel, and media coverage in my riding. Obviously, with an investment like that he was expecting to make a very healthy profit.

The high cost of completing just the initial step in an application is one that Canadians living with disabilities can ill afford. People who face extra costs for the supports and services they require for daily living sometimes end up with as little as 60% of the total amount of the disability tax credit that they are entitled to receive; the rest goes into the promoter's pockets.

Until now promoters have been able to get away with an unreasonable share of this money, as there are currently no regulations or restrictions to stop them, but I am proud to say that will stop with the passage of the disability tax credit promoters restriction act. As its name implies, its purpose is to put restrictions in place to make sure that the money stays in the pockets of Canadians who really need it, not tax promoters.

This legislation earned the praise and support of many who appeared before the House of Commons Standing Committee on Finance, most notably members from the medical community. We have been told by medical professionals that they at times have felt pressure from promoters to fill out forms fraudulently . We even heard that some promoters employ in-house medical practitioners to sign the medical portion of the disability tax credit application, perhaps having met only once with the applicant and having no prior knowledge of the person's medical history.

Dr. Gail Beck, a member of the board of directors of the Canadian Medical Association, told committee that:

...the Canadian Medical Association is pleased that this bill is being prioritized by the House of Commons. This is an important step toward addressing the unintended consequences that have emerged with the disability tax credit....

Dr. Beck went on to say that the Canadian Medical Association has been concerned for some time about the unintended consequences of the changes that were made to the disability tax credit in 2005. She said:

These consequences include fraudulent claims and tampering of forms by third parties, and they have resulted in an increase in the quantity of forms, which, to quote one of my colleagues, contributes to an avalanche of forms in physicians' offices like their own. In some cases, these third parties have even placed physicians in an adversarial position with their patients.

We are pleased that this bill attempts to address the concerns that we have raised.

Dr. Beck was not alone. Dr. Karen Cohen, chief executive officer of the Canadian Psychological Association, told the committee that:

The Canadian Psychological Association supports this bill because excessive fees charged by promoters should be restricted, especially when they too may involve any misunderstanding of eligibility.

Particularly important to me was the testimony of Carmela Hutchison, president of the DisAbled Women's Network of Canada and a member-at-large of the executive committee of the Council of Canadians with Disabilities. She is someone who knows far better than most of us just how much this legislation is needed.

Ms. Hutchison said:

[Both organizations] support the intent of Bill C-462 and agree that people with disabilities should have their rightful entitlement protected from unfair fees charged by financial promoters. Disability tax credit eligibility is a critical issue for people with disabilities, as it has become the gate for determining eligibility for a variety of benefits. Thus, we must ensure unencumbered and fair access.

That message applies to all parliamentarians, who need to lend their support to this legislation. When Bill C-462 becomes law, Canadians with disabilities who choose to use a promoter's services to apply for the disability tax credit will pay a reasonable fee for those services.

The proposed bill would restrict the fees that can be charged or accepted by businesses that request a determination of eligibility for Canadians with disabilities to receive the tax credit. Public consultations would be carried out to assess just what appropriate maximum fees should be, given the value of the services provided.

Once that fee is determined, the legislation would prohibit charging more than the established amount. The disability tax credit promoters restrictions bill would also require promoters to notify the Canada Revenue Agency if more than the maximum fee were charged. A penalty of $1,000 would apply if that limit were exceeded. A promoter failing to notify the CRA when an excess fee was charged would be guilty of an offence and liable to an additional $1,000 to $25,000 fine.

Another important element of this bill is its benefit for caregivers of people living with severe disabilities. The bill would decrease the cost of applying for the disability tax credit, freeing up more money for better care for their loved ones.

Clearly there are numerous compelling reasons to support the swift passage of this legislation. Bill C-462 would allow us to set new and necessary limits on the fees promoters can charge Canadians with disabilities, and it would provide better oversight of the industry. Let us get on with it.

I am calling on all parties to lend their stamp of approval to the disability tax credit promoters restrictions bill. Canadians with disabilities all across the country are counting on us to do exactly that.

The House proceeded to the consideration of Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act, as reported (with amendment) from the committee.

Finance

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, I have the honour to present, in both official languages, the 20th report of the Standing Committee on Finance in relation to Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

The committee has studied the bill and has decided to report the bill back to the House with amendments.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thank you, Mr. Chair.

I'd like to move that the committee delay our clause-by-clause consideration of Bill C-462 until after the committee has spent at least half an hour questioning witnesses who are independent of the government on the subject of this bill. The reason for that—and I believe that all the committee members will have received the letter from Hon. Scott Brison, for whom I'm substituting today—is that we'd like to get this request on the record because I believe that only five minutes have been devoted to that so far. Only 45 minutes has been spent on Bill C-462 so far, and only five minutes of that was for asking questions of witnesses independent of the government.

I'm told that a lot of people who work with the disabled, who need the disability tax credit, have learned about this legislation only recently and want to make presentations to this committee. The issue is the maximum price set for a consultant to help with the application for the disability tax credit. That price level will affect the economics of the whole service of helping people access the disability tax credit, and it's left unsettled by this legislation. It probably should be considered, or at least some testimony put on the record, here at this committee.

So we'd like to just have 25 more minutes of testimony from witnesses independent of the government.

[The Chair, Conservative, James Rajotte]

I call to order meeting number 126 of the Standing Committee on Finance. The orders of the day, pursuant to the order of reference of Wednesday March 6, 2013, are for clause-by-clause consideration of Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

Colleagues, I know that you're all well refreshed from your three hours of sleep last night.

I want to welcome our two officials here. I think they're both from the CRA, Mr. Brian McCauley and Mr. Michael Honcoop. Welcome to the committee. Thank you so much for being with us.

I understand there's a motion, and I think it's probably best to deal with it prior to delving into clause-by-clause consideration.

I'll ask Mr. Hsu to move his motion, please.

[The Chair, Conservative, James Rajotte]

We'll go to the vote on this motion.

(Motion negatived)

Colleagues, you do have two budget requests before you. First of all for this study, for Bill C-60, the amount requested is $26,500. That is approximately $10,000 less than what was initially sent to committee members. It's less than what we had thought, initially.

Are there any questions or concerns? Can I get someone to move this? So moved by Mr. Jean. All in favour?

(Motion agreed to)

Secondly, with respect to our study of Bill C-462, you did raise some concerns about the budget previously. It has been adjusted downward substantially.

Any questions or concerns about this budget? Can I get a mover for this? Mr. Jean again. All in favour?

(Motion agreed to)

Thank you, colleagues.

We will move to our second panel. I want to thank our witnesses for being very patient while we were dealing with the three motions and two budget items.

We have six people to present. First of all, as an individual, we have Mr. George Smith, a fellow and adjunct professor from Queen's University. We have, representing the Association of Municipalities of Ontario, Ms. Judy Dezell. From the Canadian National Institute for the Blind, we have the national director, Ms. Diane Bergeron. From the Canadian Union of Public Employees, we have Mr. Denis Bolduc, general secretary. From the Canadian Urban Transit Association, we have Mr. Patrick Leclerc, and by teleconference, we have Monsieur Florian Sauvageau.

Monsieur Sauvageau, can you hear me?

[Akiva Medjuck, President, National Benefit Authority]

My name is Akiva Medjuck, the founder and president of the National Benefit Authority. I welcome the opportunity of appearing before this committee to discuss fees charged by tax advisers who assist Canadians applying for the disability tax credit.

My involvement started when I assisted three siblings in filing disability tax claims. After helping their friends and others, I realized there was a business opportunity. Our company was launched in 2008 to help disabled Canadians and their families navigate the complex disability tax credit process. We employ over 120 people in more than 12,000 square feet of office space, using state-of-the-art systems to process claims. National Benefit Authority is the largest tax advisory service in this field.

The disability tax credit is an important program designed to help Canadians in need. Unfortunately, many potential beneficiaries are not aware of its existence. We spent over $1 million last year raising public awareness. We receive over 1,500 calls a day. About 40% of inquiries come by word of mouth. The National Benefit Authority does not engage in cold calling. It is selective with respect to its clients. We do not claim disabilities when the client has none. We do not hide our engagement terms from our clients. The process is fully explained to every prospective client and our contingency fee is clearly disclosed. Our one-page client agreement is in plain language, and we do not engage in high-pressure sales tactics.

Our 30% contingency fees apply only to current and past tax credits recovered for our clients. In typical cases, our clients receive credits for five to ten future years. We seek no payment for those future credits. As a result, our fee is a percentage of the total credit received by our clients and is substantially lower than 30%.

In a House of Commons debate, it was suggested that the DTC process is a simple, two-page form. But that's simply not accurate. We all know taxation issues are by nature complicated. The DTC is no exception. Because the DTC is a non-refundable tax credit, the disabled individual or a defined list of supporters must have paid income tax to receive the credit. The DTC allows the credit to be claimed against taxes in the current year going back ten years. Divorce, bankruptcy, relocation, and other life-changing events make the process even more complicated. On top of the tax analysis, there's a medical form that could be a challenge for doctors who are not familiar with the DTC process. What's more, many doctors are not paid for completing the form.

Finally, if there are any errors in application, or if CRA requests additional information, strict deadlines must be met or else entire applications are thrown out. Let's understand what our fees are paying for: our advertising budget; explaining the program to potential clients; and reviewing in detail the client's tax and medical information, often going back up to ten years. Where the client has not paid taxes, we identify relatives who might be eligible and then review those relatives' tax situation, going back up to ten years. We address complications in the client's life that have an impact on the DTC application and related tax issues. We deal with the client's doctors, who are often unfamiliar with the DTC-related paperwork of the criteria for approval. We submit materials and monitor the application process as well as any CRA follow-up inquiries on the medical or tax aspects of the DTC. Finally, we work with clients to collect additional information to meet the needs of CRA.

National Benefit Authority spends approximately three months compiling the claim and another three months monitoring and assisting with the application. Our fees fall within the accepted range for similar professional advisory services, such as lawyer contingency arrangements, SR and ED refunds, EI refunds, and property tax reassessments. We accept the risk, the months of work for which a client may go uncompensated. In return, we ask for 30% of the retroactive credit for those who engage us.

Canadians are under no obligation to use our services. People who learn about the credit either through referrals or online advertising are free to apply on their own or with the assistance of any other adviser. I should note that a quarter of our business consists of individuals who first attempted this process on their own and were unsuccessful, failing to receive the maximum tax amounts to which they were entitled. We provide a valuable service to disabled Canadians, and the vast majority of our clients are happy with our work. We would be pleased to provide you with letters and emails from such clients. If you would like to learn how we operate, we invite you to our offices in Toronto to learn how we've been successful in helping over 10,000 disabled Canadians.

While Bill C-462 was signed to protect disabled Canadians, the likely result will be to reduce public awareness and force Canadian families to contend with this complex process on their own. Advisors will focus on clients with high incomes, who pay enough taxes to claim the credit. Canadians with lower incomes, to whom the funds are even more important, will be left to fend for themselves.

There are better ways to address the concerns raised by parliamentarians, and we have offered our suggestion in a more detailed submission.

When the issue of contingency fees was raised in relation to the SR and ED program, the government launched the study in the 2012 budget, and the 2013 budget introduced a number of reforms. The government rejected limits on contingency fees. This provides a common sense precedent. We think the DTC is at least as important a program, and it deserves a period of study before legislation is rushed through Parliament. If Parliament chooses to act before studying the issue, we recommend in our submission that the fees and the related issue should be addressed in the legislation, rather than leaving it for regulations crafted by officials.

In closing, should Bill C-462 restrict the ability of organizations such as the National Benefit Authority to represent clients, many qualified and deserving Canadians will not receive this benefit. Canadians with disabilities need to have someone in their corner with the expertise and resources necessary for representing their interests.

Thank you. I would be pleased to answer any questions.

[Dr. Karen Cohen, Chief Executive Officer, Canadian Psychological Association]

Thank you for the invitation to join you today to talk about Bill C-462. The Canadian Psychological Association is the national association for psychology in Canada. There are about 18,000 regulated practitioners, making us the country's largest group of regulated specialized mental health care providers.

Psychologists are designated qualified practitioners who can complete the disability tax credit certificate on behalf of patients with disabilities related to mental functions. The intentions of this bill—to help ensure that consultants don't make promises of eligibility that they cannot guarantee, that they don't charge people to apply for it when they're clearly not eligible, and that they don't charge people inordinately even if they are deemed eligible—are honourable.

Today I'd like to provide the committee with a bit of background on how the tax credit was most recently revised and highlight some of the issues that were raised about the complexity of the application process at that time, particularly as disability related to mental functions is concerned.

In 2003 I was appointed to the national advisory group on disability, the technical advisory committee, which advised the Ministers of Finance and National Revenue on disability-related tax measures that led to the system we have today. One of the original charges to the committee stemmed from the difficulties and inequities of assessing disability related to psychological as compared to physical impairments. I was tasked with leading the subcommittee on mental functions, which took on reviewing the eligibility criteria for the tax credit related to mental functions and making recommendations about how these criteria could be more fairly applied by the CRA.

Before the technical advisory committee did its work, there were tremendous challenges in fairly assessing disability related to mental functions. Some of these were addressed by the committee, and their 2004 report resulted in important legislative and administrative changes.

Despite the best efforts of consumers, health care providers, and the CRA, the assessment of persons with impairments in mental functions for the purposes of establishing eligibility for the tax credit continues to be complex compared to the assessment of more straightforward impairments to physical function.

It was for this reason that in 2007 I authored a short article that attempts to review and clarify some of the eligibility issues for health professionals who fill in the certificates on behalf of their patients with mental health conditions. I also drafted a new wording for the form, which I felt would result in fairer assessments, but unfortunately this wording was not entirely applied.

The difficulty revolves around the definitions of mental functions necessary for everyday life and the distinctions made between some kinds of cognitive functions and others. For example, whereas a person could be considered markedly restricted if he had only an impairment in memory, he would not be considered markedly restricted if he had only an impairment in judgment.

Further, whereas functions like memory and judgment are necessary to the completion of adaptive activities like self-care, these are all treated equivalently as functions on the certificate. Treating functions and activities in this way is inconsistent with the way in which psychologists think about and assess function. What results are definitions and criteria that may not be readily understood or appreciated by busy practitioners who fill out the certificates for their patients. The lack of clarity among patients and practitioners may inadvertently create a market for promoters.

The Canadian Psychological Association supports this bill because excessive fees charged by promoters should be restricted, especially when they too may involve any misunderstanding of eligibility. However, it is important to address what might be the underlying cause driving the use of promoters. If it is indeed the lack of clarity for taxpayers and health practitioners, then the criterion certificates themselves should be revised to enhance the fairness of assessments.

I have been committed to disability and its accommodation for some time now as CEO of the CPA, but also as a health practitioner who has worked in the area of disability. I would be very glad to contribute further by working with government on this file.

Thank you.

[Dr. Gail Beck, Member, Board of Directors, Canadian Medical Association]

Thank you very much. Good morning.

I would like to thank the committee for providing the Canadian Medical Association with the opportunity to comment on Bill C-462. My remarks today will also be brief, as we are undertaking legal analysis.

All of you are aware that the bill was to be studied by your committee at the end of the month, which was the timeline we were working with. Tight timelines notwithstanding, the Canadian Medical Association is pleased that this bill is being prioritized by the House of Commons. This is an important step toward addressing the unintended consequences that have emerged with the disability tax credit, and we will seek additional opportunities to participate in the legislative process as this bill advances.

For several years, the CMA has urged the Canada Revenue Agency to address the unintended consequences of changes that were made to the disability tax credit in 2005. These consequences include fraudulent claims and tampering of forms by third parties, and they have resulted in an increase in the quantity of forms, which, to quote one of my colleagues, contributes to an avalanche of forms in physicians' offices like their own. In some cases, these third parties have even placed physicians in an adversarial position with their patients.

We are pleased that this bill attempts to address the concerns we have raised.

At the same time, we do have four concerns with the bill as proposed. First, we urge, prior to moving this legislation forward, that any possible privacy implications be assessed. We're concerned about the potential for breach of privacy of patient information that could arise during the transfer of patient forms from physicians to promoters and back, and within Revenue Canada and potentially other departments. Essentially it appears that the proposed bill as written would authorize the interdepartmental sharing of personal information. The Canadian Medical Association raises this issue for consideration, as protecting the privacy of patient information is one of the key duties of a physician, as spelled out in the CMA code of ethics.

Secondly, the definition of “promoter” should be assessed to ensure that it captures the appropriate individuals. As currently written in the proposed bill, the definition may apply the same requirements to physicians as to third-party companies if physicians apply a fee for form completion, which is an uninsured service in all provinces in Canada.

Our third concern is that the bill will continue to allow promoters to profit with respect to these forms. A fee is a fee, and physicians are concerned that even if a limit is enforced, there would still be a financial incentive to third parties.

Lastly, this question arises: why do vulnerable people need to go to these promoters in the first place? We suggest the disability tax credit form be revised to be more informative and user-friendly for patients. Form 2201 should explain more clearly to patients the reason behind the tax credit and explicitly indicate that there is no need to use third-party companies to submit the claim to CRA.

In conclusion, the CMA will continue its analysis and may have further comments on the bill as it proceeds through the legislative process. Any effort to curb the actions of avaricious enterprises that take advantage of people who are unaware of a tax deduction that is clearly available to them is welcome. Furthermore, any reduction in unnecessary red tape contributes to patient-centred health care. Nonetheless, we urge the committee to accord this legislation careful study to ensure that, as it addresses one issue, it does not create others.

I would be happy to answer any questions you might have.

Thank you.

[The Chair, Conservative, James Rajotte]

I call this meeting back to order, colleagues, to deal with our second subject matter here this morning.

Again, this is the 120th meeting of the Standing Committee on Finance, and pursuant to the order of reference of Wednesday, March 6, 2013, we are starting our study of Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

Colleagues, we have an hour or less than an hour this morning, as we do have a motion that we have to deal with as well, prior to the end of the meeting. You do have clause-by-clause consideration on your lists, but as your chair, I'm going to suggest that we deal with clause-by-clause at a later date, simply because we want to hear from our witnesses who are here and we want to have the opportunity for members to ask questions.

In terms of witnesses, we have the mover, the presenter of the bill itself, Ms. Cheryl Gallant, the MP for Renfrew—Nipissing—Pembroke.

Welcome, colleague, to the committee.

Representing the Canada Revenue Agency, we have Mr. Brian McCauley.

Welcome.

We also have with us Ms. Gail Beck, from the Canadian Medical Association, and Dr. Karen Cohen, from the Canadian Psychological Association.

From the Council of Canadians with Disabilities, and representing the DisAbled Women's Network of Canada, we have Ms. Carmela Hutchison, member at large of the first organization and president of the second one. From the National Benefit Authority, we have Mr. Akiva Medjuck, the president.

From Edmonton, we were supposed to have, by video conference, from the Multiple Sclerosis Society of Canada, the president, Mr. Neil Pierce. We are still waiting for Mr. Pierce to appear there.

We will start with the mover of the bill, Ms. Gallant.

Each of you has about five minutes for an opening presentation. Then we'll have questions from members.

Ms. Gallant.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Ms. McLeod, I apologize. I did take your time.

I want to thank our witnesses very much for being here, and for responding to questions from the members as well.

Colleagues, I'm going to clarify the calendar.

As you know, the calendar did say we were going to start the budget implementation bill on Thursday, but some members have strongly suggested that we not start that bill until it has been referred to us by the House, until it is voted on at second reading. Therefore, I am recommending, as your chair, that on May 2 we deal with main estimates 2013-14, and on Tuesday, May 7 we deal with a private member's bill, Bill C-462, the Disability Tax Credit Promoters Restrictions Act. I'm hoping we can start the budget implementation bill with officials from the Department of Finance on May 9.

I'm looking around for nods and I hope I have agreement to do that, as your chair.

The House resumed from March 4 consideration of the motion that Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act, be read the second time and referred to a committee.

Disability Tax Credit Promoters Restrictions Act

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, it is my pleasure to rise today to conclude the second hour of debate on my private member's bill, Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

As I stated when I last spoke to this bill, my intention in bringing this legislation before the House is very straightforward: I want increased protection for disabled Canadians from the predatory practices of certain disability tax credit promoters, some of whom see the tax credit as an opportunity to profit from the reduced circumstances of others.

The disability tax credit is a non-refundable tax credit that reduces the amount of income tax that either a person with a disability or a person supporting that person has to pay.

The need for this legislation was demonstrated to me once again as recently as last week, when a constituent of mine shared some correspondence from a promoter of the disability tax credit. The promoter asked her to travel seven hours from our rural constituency in eastern Ontario to Toronto to have the house doctor fill out her CRA form after her application was rejected based on her own family doctor's assessment.

The promoter charges a percentage of the refund, and if there is no refund, there is no profit. The potential for abuse is too great, considering the amount of money involved, particularly in cases in which the credit can be claimed retroactively for 10 years.

I am pleased to acknowledge the statements and support from all sides of the House in the first hour of debate and today. I listened very carefully to my hon. colleagues regarding the details and clarifications they will be seeking on Bill C-462 when it is referred to committee for consideration, and hopefully I will be able to answer all the members' questions.

As a friendly observation, some concerns raised are beyond the scope of what Bill C-462 would seek to accomplish. Those concerns represent an opportunity for some other member of Parliament to propose a remedy in their own private member's bill. I look forward to working in committee with all members of Parliament to do the best we can to assist Canadians with disabilities. In conclusion, I thank all members for their support of Bill C-462 and I look forward to their input and recommendations in committee.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Mr. Speaker, I am pleased to be speaking today to an important bill, namely Bill C-462, which addresses disability tax credits.

Each year, Canada Revenue Agency receives 200,000 disability tax credit applications. In 2010 alone, the government paid out refunds or assigned non-refundable credits worth $700 million.

A CBC story revealed that promoters were charging exorbitant fees to people asking for help and advice in order to obtain the disability tax credit.

Like many of my colleagues, I will be supporting this bill because I think there should be a limit to the fees charged by disability tax credit promoters. People with disabilities need to be protected so that they do not fall prey to certain promoters' scams.

The member sponsoring this bill hopes to accomplish that by reducing the fees charged by consultants when someone applies for the disability tax credit.

I, for one, feel that this needs to be studied in committee in order to clarify certain clauses of the bill so that they better respond to disabled people's financial goals. Disabled people have said that their most significant tax credit issues are unfortunately not addressed in this bill.

The disability tax credit application process is not entirely transparent, and disabled people have a hard time obtaining the tax credit because of the difficulty they have in filling out the certificate. The process needs to be simplified so that the disabled can have fair and equal access to the tax credit.

The application process is complex, and the tax credit remains very difficult to obtain. In my opinion, we must simplify the application process. Unfortunately, some unethical consultants prey on these people because they know the application process is complex and difficult. The terminology and definitions used in the paperwork are restrictive, unfair and result in inconsistency and discrimination. People find that the process for obtaining the tax credit is difficult, lengthy and overwhelming. They find the form difficult to understand and, consequently, often do not complete the process. They give up because, unfortunately, they often believe that it is pointless.

Eligibility for the credit requires a substantial change that prevents an individual from taking part in basic activities of daily living. I believe that the scope of this tax credit is too narrow, because people dealing with episodic disabilities all too often are not eligible for the tax credit. It is difficult for them to prove that their daily activities are significantly altered by their disability. Some days, they are less affected and they can do certain activities. However, on other days, they are not able to do them at all. The assessment criterion of basic activities of daily living is quite often a problem. The definition is too restrictive and, above all, contradictory. It is not in keeping with provincial and territorial definitions that doctors use, or those of other programs such as the Canada pension plan disability benefits.

The other problem is that it requires understanding and good will on the part of the doctors who must fill out the required forms. They find it very difficult to complete the certificate mainly because some disabilities are very complex and cannot always be assessed based on the definitions of daily activities.

Some people have missed out simply because their doctors gave them incorrect advice, based on an incorrect interpretation of the eligibility criteria. Any kind of family support could make the person ineligible for the tax credit, since this support helps make their lives easier.

Many participants and doctors are seriously questioning the reliability of the eligibility certificate.

This bill will prohibit a promoter from charging or accepting more than the established maximum fee.

A promoter is defined as a person who, directly or indirectly, accepts or charges a fee in respect of a disability tax credit request. I have to wonder how these fees will be determined by the Governor in Council and how the public and promoters will be informed about the tax credit.

An exemption is still possible, but promoters will have to inform the Minister of National Revenue if they are charging more than the maximum. This provision makes me wonder how the minister will determine whether the higher amount is acceptable. Promoters who are found guilty of charging more than the established maximum or of providing false or misleading information to the minister will be liable on summary conviction to a fine ranging from $1,000 to $25,000. These offences will be set out in the Criminal Code and could result in a criminal record.

We are obviously not against all promoters, since many of them have integrity and provide important assistance to the people who could benefit from this credit but who do not understand the eligibility criteria and process, as I mentioned. However, we have some serious concerns about the less scrupulous consultants who tend to try to exploit these people.

In 2005, this government changed the criteria and began offering retroactive tax refunds. So promoters began offering taxpayers their services to help them maximize their refunds. However, some promoters abused the system by charging exorbitant fees for their services. This is quite problematic and certainly unacceptable because these fees can be up to 30% of the tax credit, which can add up to thousands of dollars because this tax credit refund is retroactive.

It is important to prevent promoters from abusing the system, while keeping in mind that not all promoters take advantage of their clients. It is therefore important to make a distinction between promoters who abuse the system and promoters who act as consultants by helping disabled individuals get this tax credit, which they probably would not have received were it not for the help of a promoter.

By limiting these billable fees, the bill will protect disabled individuals from these abuses. It is a good provision, which is why we support this bill.

The Conservatives' budget cuts to the Canada Revenue Agency has made the situation even worse. Unfortunately, disabled individuals now have limited access to certain services that they could have gotten from the Canada Revenue Agency. The situation is utterly appalling.

Last year, I was able to hold one last information session for disabled people in my riding on the disability tax credit, and the Canada Revenue Agency took part. It was unfortunately the last time we were able to provide this service to our constituents because the cuts made to the Canada Revenue Agency will mean that CRA will no longer be able to help us with the information sessions.

I would like to thank my colleague from Burnaby—New Westminster, who continues to support us when it comes to this tax credit. He has been providing this information in his riding for several years now. So he is used to these kinds of information sessions, which my colleagues also greatly appreciate.

The assistance that the government is supposed to be offering to Canadians is being jeopardized by the cuts that the government is making to the Canada Revenue Agency. As a result of a lack of resources, the agency will no longer be able to adequately inform the public in question about the tax credit and meet demand by providing information sessions and other services. We are therefore seeking better protection against financial abuse and we want the government to place restrictions on the fees promoters charge people with disabilities. We also believe that additional information is required to make the bill more user-friendly in that regard.

Since my time is up, I would like to say in closing that we will support this bill and will thoroughly examine it in committee in order to improve it.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I am thrilled to stand today in support of this important legislation. I want to thank and compliment my friend from Renfrew—Nipissing—Pembroke for undertaking the initiative, which aims to reverse a trend that has seen a vulnerable segment of our society, Canadians with disabilities, increasingly taken advantage of. It is a phenomenon that has left many Canadians rightly outraged.

The disability tax credit, or DTC, for short, is a non-refundable tax credit. It reduces the amount of income tax that either individuals with disabilities or those who support them have to pay. People who qualify for the credit must have a severe and prolonged impairment of mental or physical function as defined by the Income Tax Act and as certified by a qualified practitioner. This means that they must be unable to perform one or more of the basic activities of daily living, even with therapy and the use of appropriate devices and medication. Basic activities of daily living include things like speaking, hearing or eating.

Parliament brought in this tax credit recognizing that Canadians with disabilities face particular financial challenges for which they should receive tax relief. The maximum federal amount that could be claimed last year was $7,341, resulting in tax savings of up to $1,101 for the tax year 2011. The credit will be worth even more when people file their taxes this year. In 2012, federal tax savings will be up to $1,792 for a child under the age of 18 and $1,132 for remaining eligible individuals, or their supporting families, when they file their tax returns. A corresponding credit is also available for the calculation of provincial tax.

For the one in five Canadians with disabilities living on low incomes, this tax saving can make a major difference in the quality of their lives. We should not forget that people with disabilities are often seniors. It was shocking to learn that some of these individuals were being asked for and charged 20%, 30% or as much as 40% of the tax credit owing to them. That amounts to over $20 million a year earmarked for people with disabilities that instead goes to the private sector promoters that help to prepare their claims.

These fees are being paid to promoters to complete part A, the first step in the application process to obtain a disability tax credit certificate. There is usually no need to get outside help to fill out this paperwork. Either the individual applying or someone in his or her family can generally complete it without assistance. If someone does need help filling out the forms, the CRA's call centre employees provide assistance by phone. Of course, this service is provided free of charge.

Once this step is out of the way, the applicant has a qualified health practitioner complete part B. After the form is filled out, it needs to be submitted to the CRA, which determines if the person is eligible for the tax credit, based on the information supplied by the medical practitioner. If the CRA concludes that the person qualifies, he or she only needs to include the disability amount on his or her income tax return. That is all there is to it.

Bear in mind that the CRA receives, on average, 200,000 new disability tax credit applications per year. It is estimated that roughly 9,000 of these requests are received from taxpayers who use the services of a disability tax credit promoter. Consider that last year alone, $800 million in credits were issued. That is a lot of money, money intended to help the person with a disability, not a promoter.

If adopted, Bill C-462 would restrict the fees that can charged for or accepted by promoters preparing a DTC application on behalf of someone with a disability.

A maximum fee will be established, and anyone who fails to respect this fee will face penalties. A minimum penalty of $1,000 would apply when the maximum fee is exceeded. Just what the maximum fee should be will be determined following public consultations.

The bill also introduces a requirement that promoters notify the CRA when more than the maximum fees have been charged. Failure to inform the agency when an excess fee is charged would be an offence, and the promoter would be liable to a $1,000 to $25,000 charge. These provisions would come into force on a day to be fixed by the order of the Governor in Council, at which time the proposed maximum fee would be made public.

I remind the House that our government offers a very generous range of tax credits and benefits for Canadians with disabilities. These include the child disability benefit, a portion of the working income tax benefit and certain expenses eligible for the medical expense tax credit, among others. These valuable tax credits are among the many ways we are advancing our government's economic action plan, a plan for jobs, growth and prosperity, which is working for Canadians even as they face challenging times.

I want to be clear. This is not an attempt to crack down on the individuals legitimately claiming the credit or an attempt to deny anyone's claims. On the contrary, Bill C-462 is meant simply to make sure that those who qualify for the tax credit are able to receive it without paying unfair charges.

I want to be equally clear. Our goal is not to hinder businesses that operate above board. We believe firmly in a fair and functioning marketplace. We recognize that there are legitimate businesses, doing good tax preparation work, that are charging reasonable fees. The new provisions in Bill C-462 would apply only to those who take advantage of Canadians with disabilities by taking a huge cut of the tax credit they are due. We want to be sure that the price Canadians with disabilities pay for these services reflects the real value of the services they receive.

Tax discounters are guided by the Tax Rebate Discounting Act, and the fees they can charge for their services are capped. Tax professionals also have organizations that promote ethics and peer review of business practices. Once this act becomes law, the same standard of professionalism would apply to currently unregulated promoters that offer their services related to the disability tax credit, because we expect the same level of accountability and assurance of fairness for people with disabilities that all other Canadians enjoy.

This is a necessary and worthy step and is legislation that deserves the unanimous support of the House.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to rise to speak to Bill C-462, Disability Tax Credit Promoters Restrictions Act.

This bill was introduced by my hon. colleague from Renfrew—Nipissing—Pembroke, with whom I sit on the defence committee. Thus, I was pleased to read her bill very carefully.

The purpose of Bill C-462 is to restrict the amount of fees that can be charged by promoters of the disability tax credit. I would like to back up a little bit. This bill is being introduced because the Liberal government changed the eligibility criteria for these tax credits in 2005. That change made retroactive payments possible for up to 10 years.

For those who do not know, I would add that thousands of people with disabilities in our community could be eligible for this tax credit, which generates a significant tax refund from the Canada Revenue Agency. I urge everyone who has a disability to see if they qualify for this tax credit. They could be eligible for up to $1,380 a year, which can be claimed retroactively for up to 10 years. Given that the government introduced retroactive payments, this can mean significant sums of money for people with disabilities.

This explains why some people have become promoters of this tax credit. People have begun offering their services to help eligible people apply for and receive their refund. Some of these promoters do a very good job, but others have unfortunately abused their position. For instance, some promoters charge exorbitant fees, sometimes as much as 30% of the refund received.

This sort of thing defeats the purpose of the tax credit. When the government creates a tax credit for people with disabilities, it wants those people to benefit from it, not the promoters. Furthermore, charging such high fees is an abuse of persons with disabilities, because it deprives them of part of the money that is rightfully theirs, which they need. Living with a disability can be difficult financially. That money should go primarily to them.

So, this bill limits the amount of fees that can be charged by promoters of the disability tax credit, in order to prevent these kinds of excesses. I am sure that the member, like me, has nothing against promoters in general, but rather she simply wants to ensure that people with disabilities have equal access to the tax credit and that they can find the support they need to obtain their refund, while safeguarding against potential abuse.

We know that promoters play a key role in helping people with disabilities get the government services and financial assistance they cannot get elsewhere. The Income Tax Act is fairly complicated, so it is easy to understand why someone might want help from a third party.

I am not an expert on the disability tax credit, but I am concerned that the bill, as written, may not include all of the details and provisions needed to ensure effective implementation. Still, it should go to committee so that we can study and improve it. After we study it in committee, we will be able to amend and clarify it so that we end up with a good bill that will protect people from those who would take advantage of them.

As it stands, Bill C-462 prohibits promoters from charging fees that exceed the maximum fee set by the Governor in Council. I wonder if it might be best to specify how and when those fees will be set and how the public will be informed. Those are details we can hammer out in committee. I imagine that my colleague has already started thinking about those details and will share her thoughts with the committee.

Any promoter who is convicted of charging more than the maximum fee or who makes false entries in a notification to the minister could end up with a criminal record. Here again, thorough study will ensure that we do not end up with the unintended consequence of saddling too many people with a criminal record.

I would like to make it clear that New Democrats support this bill, but we want to know exactly how the government plans to stop promoters from abusing the system and people with disabilities. We need more information about how this bill and its measures will be implemented and how the public will be informed about it all.

Though this is a useful bill, I believe that one of the problems with the disability tax credit lies not with promoters, but with access to the tax credit. The tax credit application process is not that easy to understand. Sometimes, people with disabilities have a hard time getting the credit.

In my region, the Canada Revenue Agency closed its Rouyn-Noranda office. Those people would have understood. People with disabilities may have trouble accessing services. When those services are no longer available in our regions, the situation is even worse.

I would also like to take a few minutes to congratulate and thank the hon. member for Burnaby—New Westminster. For several years now, he has been organizing information sessions to help people understand the process and get their refund more easily. He is supposed to come to my riding in the very near future. Many people with disabilities are waiting for him and are very eager to get this information. I really wanted to take the time to thank him today.

It is important to take some time to explain to people across Quebec and Canada how to get this tax credit, or in other words, to let them know who is eligible and what steps they have to take. Some people in my riding were able to get large retroactive refunds, which shows how important it is to facilitate access to this information and how essential and useful it has been for my constituents.

We must also ensure that the application is much easier for people to complete. We have to simplify the process and then, of course, properly inform the public. I would like to remind hon. members that the information sessions on the disability tax credit are vital and, unfortunately, this service may be reduced, particularly in remote areas, as a result of the cuts that are being made to the Canada Revenue Agency's regional offices.

If we want to stop promoters from abusing the system, we really have to look at the big picture. We can limit fees, but we must ensure that the information is available to people. That is essential. Giving people access to the information so that they can respond will help stop promoters from abusing the system. This is an essential step that must not be left out.

In order to build on the bill and improve access to the disability tax credit, it would be a good idea for the government to reverse the cuts it is making to the Canada Revenue Agency and give the department the resources it needs to make people aware of the tax credit and explain to them how to apply for it.

Of course, MPs' offices will also still be available to provide people with information and help them to navigate through this type of process. What is more, I encourage all members of this House, from all parties, who have not yet done so to set up information sessions to help those who could benefit from this tax credit.

I would like to remind the House that the hon. member for Renfrew—Nipissing—Pembroke's bill is worthwhile; however, I think that there are some details that could be ironed out in committee. I therefore urge my colleague to begin thinking about those details—how to determine the cost, for example—so that she can respond in committee to the questions I asked in my speech.

[Kellie Leitch, Conservative, Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour]

Mr. Speaker, the Government of Canada has made a clear commitment to supporting hard-working Canadian families through various tax credits and income support programs, so that they are there in the times of sickness or disability. Government members recognize that Canadians sometimes have a difficult time making ends meet. We understand there may be occasions when they need others to look out for them, to prevent an already difficult situation from becoming worse. When times are tough, we need to support each other.

I am proud to stand beside my hon. colleague from Renfrew—Nipissing—Pembroke and her private member's bill, which will make sure we do exactly that. Bill C-462 introduces new measures that would protect the rights of individual Canadians with disabilities and their families to fair tax treatment.

One of the most important programs to help Canadians with disabilities is the disability tax credit, also known as the DTC. However, those applying for the credit are not always treated justly by some business operators who seem more intent on generating inappropriate profits for themselves than actually ensuring their clients' needs are met.

There have been numerous cases brought to our attention in which promoters have charged up to 40% of the amount of a person's income tax credit, often amounting to thousands of dollars for something that is very simple to do. These businesses are generally just completing part A of the DTC application, a straightforward process that usually takes very little time.

In fact, in my clinic, with many cerebral palsy patients, or in my riding, with a number of disabled constituents, these individuals have mentioned to me that they are concerned about this inappropriate treatment and that they are in need of help.

If for any reason someone with a disability or a family member providing care needs help, the Canada Revenue Agency has agents who specialize in the disability tax credit. They are just a phone call away, and they can assist both taxpayers and qualified practitioners by providing information on both the criteria and application process. Most offices of members of Parliament also provide help to constituents who are in need assistance on this file.

Despite this free and helpful service, many Canadians are turning to promoters who have sprung up in growing numbers in the past number of years. While I certainly would not suggest this applies to all promoters, some of them are known to target and aggressively pursue individuals who are eligible for the disability tax credit, especially if they may be eligible for refunds retroactively up to 10 years. I know this personally from my experience in my clinic, hearing from parents of their challenges in dealing with these aggressive promoters.

Unfortunately, once they turn their paperwork over to these individuals, people with disabilities often end up with as little as 60% of the money to which they are entitled. That is like paying 40% interest on a bank loan or credit card, something that is totally unacceptable, and should be unacceptable and deplorable in the mindset of parliamentarians.

The contingency fees charged by some businesses far outweigh the value of the services they are performing. There is a lot of money involved, money that Canadians with disabilities actually need. In 2012, the federal tax savings for someone eligible for the DTC will be up to $1,132 for an adult and $1,792 for a child under the age of 18 or their family member supporting them. Since these credits can be claimed retroactively going back over a decade, potentially 10 times these amounts are available to eligible recipients.

That is why we must act. That is why the bill put forward by the member for Renfrew—Nipissing—Pembroke is essential. We have to ensure that promoters do not take advantage of these Canadians with disabilities and recover many of the extra costs they incur for their health conditions.

Let me remind the House about the types of situations we are talking about. The disability tax credit provides a tax reduction to people with severe, prolonged impairment in physical or mental function whose ability to pay tax is limited by their disability-related expenses. The disability should be severe enough to restrict them in their basic activities of daily living or cause a person to take an inordinate amount of time to perform these duties, even if they have appropriate therapy, medication or devices. The restrictions must be expected to last for a continuous period of 12 months or may be present at least 90% of the time. People may also be eligible under the cumulative effect of two or more restrictions, which in combination are present 90% of the time.

Such individuals are already facing serious challenges, so whether it be a child with cerebral palsy who may be a full-time wheelchair user or someone with a spinal cord injury, these are individuals who need this support. The last thing they need is to have some unscrupulous promoter take advantage of them and take a portion of their tax refund, which is owed to them, which they need to make sure they are sustaining their quality of life.

Hundreds of thousands of Canadians with disabilities and family members who care for them count on the disability tax credit to help improve their standard of living and their quality of life.

I applaud the member for Renfrew—Nipissing—Pembroke for introducing this essential legislation. The act is an important step forward in creating fair treatment of all Canadian taxpayers. Thanks to her commitment in protecting the interests of her constituents and Canadian families across the country who either have a child with a disability or have a disability themselves, her actions for Canadians will make sure they receive the payment at a reasonable rate if they choose to have a promoter help them complete their DTC application. That is because Bill C-462 would restrict the fees that are charged or accepted by businesses that request a determination of DTC eligibility for Canadians with disabilities.

Public consultations would be conducted to determine an appropriate maximum fee that reflects the value of the services being provided. Once an appropriate fee has been determined, the bill would prohibit charging more than that established amount. The legislation would also require these promoters to notify CRA if more than the maximum fee were charged. A minimum penalty of $1,000 would apply when that limit is exceeded. A promoter failing to notify the CRA when an excessive fee is charged would be guilty of an offence and liable to a $1,000 to $25,000 as a fine.

Finally, the bill would benefit caregivers of people with severe disabilities. It would decrease the cost of applying for the DTC, freeing up more funds so they can take care of the individuals they care about.

I want to underline that the legislation is not aimed at legitimate tax preparers. We have no interest in interfering with regular business practices. We simply want to ensure that the companies completing DTC applications charge rates that represent the value of the service they actually provide and that the funds from the DTC end up in the hands of the people who need it, individuals with disabilities and their families.

This legislation is yet another manifestation of our determination to fully support individuals who have disabilities. We know that initiatives like the disability tax credit are vitally important in assisting Canadians with disabilities. Tax credits are key to our economic action plan, a plan for jobs, growth and prosperity, and making sure the quality of life of Canadians, particularly those persons with disabilities and their families, are well supported.

I call on all parties in the House to lend their support to Bill C-462. Support the hon. member for Renfrew—Nipissing—Pembroke and her excellent legislation that will create a fairness in the tax structure and also make sure that individuals with disabilities, and their families, are supported as they should be.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, it is a pleasure to rise today to speak to Bill C-462. When I thought about what I wanted to say concerning this bill, I thought about what a great country we live in, where people can get together across Canada and offer support to those who are less fortunate, those who may lack some of the things that the rest of us sometimes take for granted, and that we can offer financial aid to help make more equitable some of the accidental inequities we have in our society.

One of these things is the disability tax credit. This a credit that allows people with certain long-term disabilities to get some funds to compensate for the fact that a lot of things become more expensive and may require an outlay of funds, if a person has a long-term disability. This tax credit is a non-refundable tax credit, and so for the time being a person has to have a taxable income to claim this tax credit. However, I hope that in the future the House would consider making such a tax credit, and a number of other tax credits, refundable so they are available to help members of our community whom we want to help, but who may not have taxable income against which they could claim a credit.

The Liberal Party and I support this bill in principle and we support moving it to committee to look at some of the details, and it is important to look at the details.

This bill proposes to put some limits on the amount that preparers or promoters could charge individuals to help them make a claim for a disability tax credit. It proposes to set some maximums, according to an as yet undetermined formula, and to create some new offences and penalties in cases where these maximums are exceeded. There is a good reason for that. We have seen reports that rather large amounts have been charged to people seeking the disability tax credit by promoters, preparers who are in the business of helping people make their claims. One of the reasons their fees are charged is that under the legislation it is possible to go back 10 years and claim retroactive amounts for the disability tax credit, so to some extent there may be complications. For that reason there is a small industry that has grown up to explain the disability tax credit to people and to help do the paperwork to file the documents that are needed to claim the credit.

Why is it that the House should get involved at the committee stage to perhaps put some more detail on these maximums? The reason is that we should be looking at a number of things. First, whenever we feel we need to create a new offence and some new penalties, we should think about whether there is another way to help achieve what we want to achieve and not solely rely on creating new penalties and new offences. For example, in this case it may be possible at committee stage that we might decide there are ways to simplify either the tax code or the forms one needs to file to reduce the chance that people need to hire somebody to help them prepare these applications, and so to reduce the chance that the people who need the disability tax credit would have to pay 10% or 20% or sometimes more to these preparers. That is something we should look at, because if there is a way to avoid making a new crime and new punishment, we should be following that.

The other thing one might want to consider is something I will illustrate with an example. This is another thing that should be considered in committee. When I do my taxes, I use an Excel spreadsheet, and most of the time my tax situation is the same from year to year. The first year I set up the Excel spreadsheet, it took a long time to program it and put all the formulas in the cells, but in succeeding years it is much easier. It takes very little time for me to put together my tax return and do all the calculations. Sometimes the laws change and I have to adjust the spreadsheet, and sometimes my personal situation changes, as it did last year, and I have to spend more time changing the spreadsheet and looking at what the rules are.

In the case where, for example, somebody is claiming the disability tax credit, there is a lot of work to do in the first year. People have to look at how this tax credit interacts with all the other parts of their tax situation. In the first tax year, there is a lot of work to be done. We might consider giving more leeway in the first year of a claim for the disability tax credit and then maybe tighter limits in succeeding years when there will be less work to be done. These are the sorts of details that can be considered in committee.

In the proposed bill, there is no definite dollar amount set for the limits. For example, there could be a certain number of dollars for the first few hundred dollars of claims under the disability tax credit and then a percentage for anything above that amount. We need to figure out the right place to put the boundary. On the one hand, we know there is quite a bit of work to be done and people have to know what they are doing. They need to be trained and able to do a good job filing claims for tax credits. On the other hand, we want to discourage people from charging too much or discourage people from not bothering to claim the tax credit because it costs too much to hire someone.

We need to hear from witnesses in committee and look at where that boundary should lie and what is a fair limit to put on the amount tax preparers can charge for preparing a disability tax credit application. We have to be careful not to place a limit that is too low. We might think we have to make sure preparers do not get too much money, but it is also possible to place a limit that is too low, which would discourage people from claiming it because they may not find a tax preparer willing to do the work for the money. We all agree that when people have skills, experience and ability, they deserve to be paid for the high-quality professional work they do. We should be very careful about these sorts of unintended consequences, and that is another reason the committee should hear witnesses on this and not simply rely on the Governor in Council to set all of these numbers. It would be a good idea to hear testimony from witnesses and perhaps make some amendments to the bill in committee.

My colleague who introduced this bill decided to bring forward a bill in the House based on her experience with constituents who are worried about the high fees they might have to pay to claim something they need to help compensate them for their disabilities. I want to congratulate my colleague for doing that, for listening to her constituents and bringing their concerns in the form of a bill to the House of Commons.

The House resumed from February 5 consideration of the motion that Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act, be read the second time and referred to a committee.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, I am certainly pleased to stand today to speak to this private members' bill that the hon. member for Renfrew—Nipissing—Pembroke has brought forward. It is very important legislation.

Perhaps before starting, I would point out that I was very surprised to hear some of the comments by the hon. member for Victoria and the hon. member for Saint-Léonard—Saint-Michel. If one actually looks at the application form, there is a small part that has to be done by the promoters. Actually, as someone who has experience in the health care field, as I go through the section that the medical practitioners fill in, it is very logical. It is quite a simple form, in terms of the areas that are non-applicable and that one can really target. Thus I find their comments about the application process surprising.

I have heard from many people about the responsiveness of the CRA when they have called it, and how willing, able and quickly helpful CRA is when dealing with any of these issues. I do not know if the hon. members were trying to find areas of disagreement for disagreement's sake. I think sometimes it would be nice to just look at what is a really good piece of private members' business, not government business, and to look at it in the spirit with which it was brought forward.

Certainly our government understands that Canadians have a difficult time making ends meet. As a result we offer a very generous range of tax credits. In fact, the tax credits are key to our economic action plan, a plan for jobs and growth that is working for Canadians as we face the global economic downturn. I could go on at length about some of those very important measures, whether the universal child care tax benefit or the home buyers' tax credit. These have been very helpful, as I hear every day in my office.

Since forming government, we have continued to lower taxes for hard-working Canadians. The average family now pays $3,000 less in taxes each year.

We are certainly committed to enhancing the participation of people with disabilities. Through our policies and programs we support the full and equal involvement of those with disabilities in every aspect of Canadian life.

A key component of our strategy to assist the estimated 4 million Canadians with disabilities is the use of tax measures, particularly personal income tax provisions. As the House is aware, the Department of Finance is responsible for developing federal tax legislation in the areas of personal and corporate income tax. The Canada Revenue Agency administers this legislation and the various social and economic incentives delivered through the tax system.

One of the most important measures to help Canadians with disabilities is the disability tax credit. It recognizes that the cost of some disability related expenses can affect a person's ability to pay tax, and provides a tax reduction to people with a severe and prolonged impairment in physical or mental function. Their disability must be severe enough to restrict them in their basic activities of daily living or cause a person to take an inordinate amount of time to perform such activities, even with appropriate therapy, medication and devices. The restriction must be expected to last for a continuous period of at least 12 months and must be present at least 90% of the time.

People may also be eligible under the cumulative effect of two or more restrictions, which in combination are present 90% of the time. To claim this fund, the affected person or family members caring for him or her need to complete the disability tax credit certificate.

Members have talked about the process and the form, and how it certainly is a very sensible form. There is a section for a medical practitioner to fill out information on the impairment. Again, contrary to what the opposition members say, I think it is very sensible and well laid out. The first page is also very simple.

Once that step is complete and the CRA confirms that the person is eligible for the credit, the disability amount can be claimed on their income tax return. If for any reason someone with a disability or family member providing care needs assistance, there are agents who specialize in the disability tax credit. They are available to assist taxpayers and qualified practitioners by providing information on both the criteria and the application process. They are readily available and very helpful.

As Bill C-462 underscores, however, Canadians with disabilities applying for the credit are not always treated fairly. In recent years the Canada Revenue Agency has witnessed an increase in the number of businesses promoting their services to people with disabilities and their families who want to apply for the disability tax credit, or the DTC. Often, these businesses are focused primarily on completing the application form. Again, it is that early section, part A, I referred to. They are charging up to 40% of the amount of the person's income tax refund, often amounting to thousands of dollars, for something that is very simple to do. That can hardly be called fair. People with disabilities receive as little as 60% of the amount they are entitled to receive.

In 2012, the federal tax savings for someone eligible for the DTC will be up to $1,132 for adults, and can be as much as $1,792 for a child under the age of 18 and/or the family member supporting them. Of course, as we have mentioned already, these can be claimed retroactively, so thousands of dollars are at stake. For the one in five 5 Canadians with disabilities, living on lower incomes, this can be a tremendous amount of money. We should not forget that disabilities are also frequently an issue with seniors.

The Government of Canada is committed to ensuring that all Canadians are treated fairly by the tax system. The disability tax credit should be given to the person for whom it was intended. To make sure that happens, Bill C-462 would restrict the fees that can be charged or accepted by businesses that request a determination of DTC eligibility on behalf of someone with a disability. That is the key point, which also speaks to some members' concerns about whom this is targeting. It is not targeting practitioners but the person who has submitted the eligibility form on behalf of someone with a disability.

The legislation would prohibit firms from charging or accepting more than an established maximum fee. That would be determined following consultations. We certainly do not want to interfere with a fair and free market and inadvertently hurt businesses that charge reasonable amounts consistent with the value of the services they provide. Our goal is simply to ensure that when Canadians with disabilities are eligible for the tax credit, especially if their claim goes back many years, they receive the maximum amount due to them.

To discourage those companies that charge their clients more than a reasonable fee, Bill C-462 would require businesses to notify the CRA of any fee charged in excess of the maximum amount permitted. If they fail to do so they would face fines of $1,000 to $25,000 for not notifying the CRA, or for any false or deceptive statements. A separate fine equal to 100% to 200% of the excess fees could also be applied in addition to the penalty. Such fines would be applied in serious cases, such as repeat offenders.

There is very little to fault in the legislation, which is why it earns my endorsement, with several small caveats. To enhance the bill's effectiveness, our government proposes three amendments. First, we want to strengthen the monetary value of the penalty so that it will represent more than just a return of profits. Without this amendment the penalty as written could be perceived as an unacceptable business risk. We also want to make sure that the provisions of the bill apply to all types of DTC promoters and preparers, regardless of how their businesses are structured. Finally, we want to ensure that the CRA is allowed to make full use of the information at its disposal to identify non-compliance and to enforce the provisions of the bill.

With these improvements, Bill C-462 earns my wholehearted support. I trust I can count on all members of Parliament to give their stamp of approval to this very worthy legislation.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I am going to read the summary of the bill because it is important to put the debate in context. It says:

This enactment restricts the amount of fees that can be charged or accepted by persons who, on behalf of a person with a disability, request a determination of disability tax credit eligibility under the Income Tax Act. It establishes a prohibition against charging or accepting more than an established maximum fee and establishes offences and penalties for failure to comply.

Based on that, I do not see how anyone can be opposed. I am comfortable with it and I will support sending the bill to committee. The Liberal Party has always supported cracking down on fraudulent consultants who take advantage of disabled Canadians or any type of Canadians, but especially disabled Canadians. However, we think Bill C-462 requires careful study at committee to ensure that it achieves the stated objectives and avoids unintended consequences.

We support the idea of a ceiling on costs to help protect those eligible to apply for the tax credit for persons with disabilities, but the maximum for such costs should be determined through an open and transparent process of consultation with those concerned, such as organizations for persons with disabilities and members of the medical community. The question is a complex and, above all, an important one. We should therefore adopt a rigorous approach to ensure that Canadians with disabilities receive as much help as possible from Canada.

We are also supporting Bill C-462 at second reading, in order to have it referred to committee for study to ensure that there are no unforeseen consequences, such as a reduction in eligibility for the tax credit for persons with disabilities. We also hope that the government will show good faith, listen to opposition members and make the required amendments to the bill, if necessary, in accordance with what we learn in committee. The only way of avoiding unfortunate consequences for those with disabilities will be to do a thorough job in committee. I trust the Conservatives will be able to set aside partisanship for such an important issue.

Despite the good intentions in the bill, I believe that the government could be more helpful to Canadians with disabilities by simplifying the application process through which they receive their tax credit. For example, the documents to be completed and the process itself are complicated—doctors have many responsibilities in this area— which means that many Canadians are not able to complete them without assistance.

If everything was simplified, many Canadians with disabilities could complete the forms themselves, which would avoid their having to rely on someone else to help them do so. Reducing the red tape and the processing time in this manner could also generate savings for the government. It would therefore be useful both for the government and for persons with disabilities to look into this aspect at the committee stage.

The Liberal Party also supports the idea that fraudulent consultants should be prosecuted to the letter of the law.

I just want to quickly highlight some of the concerns I found in looking at the bill. In the bill it states that the definition of a promoter is “a person who, directly or indirectly, accepts or charges a fee in respect of a disability tax credit request”. Would that mean a doctor or an accountant? I asked the question to the sponsor of the bill, and she seems to think it would not be, but that is not how the bill reads. I just want to make sure the bill will be corrected so that doctors, accountants or other professionals would not be included as being promoters.

I was looking at the requirement to fill out the disability form. Seven out of the eight pages of the form to request or to determine if one is eligible to claim the disability tax credit must be completed by a qualified practitioner, which means a medical doctor, physiotherapist, optometrist, psychologist, occupational therapist, special language therapist or audiologist. I do not think any of these should be considered promoters.

Again, are the doctors consultants or are they promoters? Should doctors not charge for their time, as some doctors do, or is it part of the medical services they provide through the health care system? I think this is one of the questions that should be asked at committee. I understand there are going to be some medical professionals, associations and representatives at committee, and that would be one my questions.

In my former life as an accountant, I found that the forms are more lengthy than complex. Usually doctors feel responsible for any inaccuracies on these forms and so they take a little more time. As I mentioned before, maybe we should just consider changing the way the disability credit is administered, instead of introducing more regulations and making the forms more complex. Perhaps we could have a simple one-pager and have a doctor's letter attached. This would be something the committee could study, to find a way to make it easier and perhaps less cumbersome to administer.

In my experience as an accountant, especially when the government introduced retroactively requesting a change as far back as ten years to the income tax form for a disability tax credit, the first year is normally the most complex time. Even though one may be using software, one has to determine which credits and deductions a client is eligible for and which are more advantageous. If one is claiming the disability tax credit, one may not be eligible for some other credits. As well, one's dependents would be a consideration. It is complex and one wants to make sure that the professional involved in preparing the tax return or giving advice is not being penalized because he or she has said to go and get the disability tax credit certificate.

The other problem I found as a professional accountant was not filling out the form but having the form filled out on a timely basis. Normally the form is given to the client or to the person who is representing a handicapped person eligible for the disability tax credit. The form is given to the doctor, who may not have time and puts it on his or her desk, and it takes forever to get it back. The tax return is either already filed or waiting for the form before being filed. Also, a lot of times the tax return is filed, but the revenue department may come back asking for more information. Therefore, it is a time issue more than a complex issue. This may be another area that needs to be addressed in committee.

When the committee addresses the promoter fees, who should be paid for their time and how would that be calculated? I saw that there was a formula, which is a little complex, in the private member's bill. However, a professional, and I will use the example of an accountant, would not necessarily charge based on a percentage because he or she is not allowed to do so. How do we avoid an accountant charging based on the fact that a person would get a $20,000 or $30,000 refund if he or she is eligible to go back and amend their tax returns for the last 10 or 15 years?

Personally, I agree with the bill. I do not believe that promoters should be taking advantage of the disabled. I do not believe that promoters should be paid at all, but I guess there has to be a way to promote this initiative. The government spends enough money on advertising, I do not see why we also have to pay promoters. I am totally against this and I am hoping other members will also be against this in committee. However, I am totally shocked that the Conservative government is introducing more regulations.

There is another reason that disability tax credits are very important. People may be eligible for the disability tax credit, but they may not get money back on their tax return. However, they can open up a disability savings account. That is very important and works for a lot of people in my constituency.

Again, I am in favour of the bill, but as I said before, the Liberal Party is not necessarily in favour of these tax credits. We prefer having these tax credits refundable so that the people who actually need the money, get the money.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I rise today to speak to Bill C-462, and I acknowledge that the bill was sponsored by the member for Renfrew—Nipissing—Pembroke. I thank her for her work on this important issue.

I will be supporting the bill because, like the member, I believe it is necessary to establish limits on the maximum fees charged by promoters of the disability tax credit. However, it is my view that a study is needed to clarify certain sections of the bill and to provide insights on how certain shortcomings of the bill might be best addressed.

In my community of Victoria, and across the country, many of our fellow citizens are living with disabilities and many simply do not have access to the supports that they need. I would like to stress that for people living with disabilities, some of the biggest issues relating to the disability tax credit are simply not addressed in the bill.

The application process for the tax credit is not transparent and people with disabilities have trouble obtaining it. I would also like to see more information in advance on the way in which the bill would be implemented and how the public would be informed as to its existence and to the protections it would create.

I would like to see a simplification of the application process for the disability tax credit to make it more accessible for people with disabilities. I would like to see better protection against financial abuse and restrictions on fees charged by promoters of a disability tax credit.

Disability organizations, such as the Council of Canadians with Disabilities, the Canadian Association for Community Living and the myriad of organizations that represent specific disabilities, share our concerns about access to the disability tax credit.

It is my sincere hope that the Conservative members on the other side of the House will consider carefully the concerns that I and my NDP colleagues on this side of the House are bringing forward. I hope the necessary changes can be made to fill in some of the gaps in the legislation as it is currently drafted.

In this context it would be most appropriate for me to talk a little about my concern about the Conservative government's cuts to the Canada Revenue Agency, which have had a real impact on the services offered to all Canadians. Cuts to jobs and duties of regional program advisers, for example, put information sessions on disability tax credits at risk. These sessions facilitate the understanding of how to obtain the disability tax credit. Of course closures of CRA offices across the country have had a significant and ongoing impact on persons with disabilities who need access to the services provided by those centres.

Following major Conservative cuts to the federal headquarters, I understand that some 28 Canadian Revenue Agency counters were closed last fall. There is a fundamental issue to speak to on this point and a very serious question to ask.

If the CRA services were readily available for people with disabilities and if the process for accessing the disability tax credits were not so onerous in the first place, would the need have been created, which certain unscrupulous advisers have been induced to meet? In other words, if the forms and the statute were less opaque, the bill may not have been necessary, which is regrettable.

Ultimately, this should be approached as an issue of accessibility for people with disabilities. Ensuring accessibility is the work of so many incredible groups across the country. For example, in my riding of Victoria, I would particularly salute Inclusion Works, a family, grassroots-oriented group that recently won an award from the B.C. Ideas competition for social innovation and also won both the People's Choice Investments and Supporting People with Developmental Disabilities Investments awards.

In our view, the priority in order to ensure that persons with disability have equal access to disability tax credits should be to ensure that promoters cannot abuse the system. On this, I agree with my hon. colleague.

Persons with disabilities must receive the support they need. Unfortunately, the bill does not address the problem of accessibility. The CRA administrative process remains complicated and the tax credit difficult to obtain, especially when a person is not familiar with the application process. It is necessary, we agree, to establish limits on fees charged by promoters of this tax credit.

A “promoter” is defined as a person who, directly or indirectly, accepts or charges a fee in respect of a disability tax credit. I have concerns about this broad definition. It may be over-inclusive. For example, people accepting nominal gifts for their assistance would be caught by this definition.

We are not against all promoters. Some act as consultants to help people with disabilities obtain services and tax credits from the government, which they may otherwise not know how to obtain. However, we have serious concerns about a trend among less scrupulous consultants who seek to profit from a change in eligibility criteria. Following the 2005 changes to the criteria and specifically when the government started to offer retroactive tax refunds, promoters started to offer their services to taxpayers to help them maximize their refunds. There have been problems. An article on February 9, 2011 by the CBC exposed some of the abuses that people are suffering and to which my hon. colleague alluded quite clearly. Therefore, I have serious concerns about this situation as well.

It is my understanding that the bill prohibits promoters from accepting or charging a fee that exceeds the so-called maximum fee. It is important to clarify at committee just how and when maximum fees will be established and how the public is going to be informed about them. I would like to know how the Governor in Council will determine the maximum fee.

Unless otherwise exempted, promoters charging more than that fee will have to inform the minister of the fees charged. How will promoters know what the maximum fee is and how will they be made aware of the changes? What kind of promoter will benefit from an exemption? What are the criteria for such exemptions? Is there a danger of too broad a discretion being conferred on officials by this form of drafting? Similarly, does the formula for calculating the promoters' fee, as set out in section 3(2) of the bill, square with the fines set out in section 7?

I would like to know if the government has thought of clarifying the application process for the disability tax credit in order to address the real issue of accessibility and unnecessary complications associated with the current process.

In conclusion, I would like to say that I will vote to support the bill and hope that the necessary changes I have alluded to will be made to fix the problems with it. I will work to encourage those changes, but I return to my initial point. It appears to me that in conjunction with these legislative changes, government cuts to the CRA are creating a need for greater assistance and refusing to address the fundamental problem of the accessibility of the disability tax credit.

I would like to state again that we are not against all promoters. We recognize some act as consultants and help people with disabilities to obtain the services and tax credits from the government they would otherwise not know how to obtain and to which they are entitled. However, we do need to fix some of the fundamental problems that are creating this situation and I believe that the bill in its current form fails to do that.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

moved that Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act, be read the second time and referred to a committee.

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, it is my pleasure today to speak in support of my private member's bill, Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

My intention for bringing this legislation before the House is straightforward. I want to see increased protection for disabled Canadians from the predatory practices of some disability tax credit promoters who see the tax credit as an opportunity to profit on the reduced circumstances of others.

The disability tax credit is a non-refundable tax credit that reduces the amount of income tax that either individuals with disabilities or their supporting persons have to pay. Parliament voted in this tax credit with the recognition that Canadians with disabilities face financial challenges.

Canadians may be eligible for the disability tax credit if all or substantially all of the time they are unable to perform one or more of the basic activities of daily living, even with therapy and the use of appropriate devices and medication.

Basic activities of daily living include things like speaking, hearing and eating. The wide array of disabilities eligible under the disability tax credit is important. As the member of Parliament for Renfrew—Nipissing—Pembroke, which includes CFB Petawawa, I am acutely aware of the number of disabilities with which Canadians are living. The soldiers and veterans of my community are at a greater risk for a number of disabilities because of the sacrifices they make for our country, and the tax credit is of particular importance to them.

For the average Canadian, the maximum federal amount that could be claimed last year was $7,341. This resulted in a maximum federal tax savings of up to $1,101 for 2011. This is significant tax relief for Canadians living with a disability, and that money should be staying in the pockets of Canadians who need it. It should not be swindled away by unregulated promoters. This tax credit is important to them.

My decision to introduce the legislation restricting the fees charged by promoters of the federal government's disability tax credit is a direct result of the aggressive tactics employed by some providers who objected to my decision to issue consumer alerts.

I started issuing consumer alerts in my riding last year when I found out that some individuals were being charged 20%, 30% or as much as 40% of the tax credit. I felt, and I am hoping that other members of Parliament will agree, that those kinds of charges are unfair, especially when we consider that the purpose of the disability tax credit is to support Canadians living with serious disabilities.

I wanted my constituents in Renfrew—Nipissing—Pembroke to know that they can access their federal member of Parliament regarding any federal tax credit without being charged a percentage of the tax credit.

Changes were put in place in 2005 that made benefits receivable on a retroactive basis. This created a new incentive for those claiming to be consultants to work with Canadians on their claims, as the dollar amounts on a 10-year retroactive tax refund can be significant.

I started to get a sense of how big an activity this whole tax credit promoter scheme is when a promoter complained about my consumer alert by telling me that he had spent $25,000 on booking space, hotel rooms and media coverage. He expected to make his money back after driving the 905 kilometres to my rural eastern Ontario riding with his travelling road show.

His complaint was: How dare I tell the people to see their member of Parliament and let them have all of the tax refund they qualified for with the disability tax credit?

We are also not talking about a small number of Canadians. The Canada Revenue Agency receives on average 200,000 new disability tax credit applications each year. It is estimated that approximately 9,000 of these requests are received from taxpayers who use the service of a disability tax credit promoter. Last year alone, $800 million in credits were issued.

I am still receiving phone calls and emails with complaints from these promoters. Many of the comments I have received are along the line that they are just helping our government to promote the disability tax credit and they deserve the fees they are getting. I could not disagree more. There may be legitimate companies doing this work. Unfortunately, it is the less scrupulous operators that have identified the need for the legislation I am proposing today.

I ask all members of the House to support Bill C-462. Concerns have been raised by medical professionals who feel they are dealing with an increasing number of fraudulent claims and have at times felt pressured to fill forms out fraudulently by constituents. I know this to be the case because doctors in my riding have told me that this has been their experience.

One doctor related the incident of having an individual sit in his office and refuse to leave until he filled out the disability tax credit certificate to get the tax credit. The doctor, giving his expert medical opinion, insisted on being truthful when asked to complete the tax certificate. This same patient, who had been encouraged in this behaviour by a disability tax credit promoter, was revealed to have visited four doctors previously, looking to have the certificate completed in such a way as to qualify for the tax credit.

Some consultants have even taken the step of employing in-house medical practitioners to sign the medical portion of the disability tax credit application, perhaps having only met the person just once and having no prior knowledge of the applicant's medical history.

Let us talk a bit about the credit. To qualify, an individual must have a severe and prolonged impairment in mental or physical functions, as defined by the Income Tax Act and as certified by a qualified practitioner. Eligibility is not based on the diagnosis of any specific medical condition, but is based on the effects of the conditions on an individual over a prolonged period of time.

Some examples of conditions that may qualify relate to walking. A person with no apparent mobility impairment, who is unable to walk a short distance without stopping frequently to rest because of shortness of breath or pain, may qualify for the disability tax credit because it takes him or her an inordinate amount of time.

Vision may be a condition. Someone who is suffering from a degenerative condition that will not improve with the use of corrective lenses or medication and has a severe visual impairment may qualify for the disability tax credit.

Hearing: A person who, even with the use of a device, is unable to hear or who takes significantly longer than an average person who does not have an impairment to understand spoken conversation may qualify for the disability tax credit.

Speaking: People who, even with therapy devices, are unable to speak so as to be understood and must rely upon other means of communications, or who take significantly longer than an average person who does not have the impairment to make themselves understood may qualify for the disability tax credit.

This list is not meant to be exhaustive. These are just a few examples, and the information is gathered directly from the Canada Revenue Agency website.

My intention in bringing the bill before the House is straightforward. I want to see increased protection for disabled Canadians from the predatory practices of some disability tax credit promoters, on the one hand, and also contribute to a fair, functioning marketplace for those who do wish to use the services of a disability tax credit promoter.

Bill C-462 would provide a new legislative framework to limit the fees charged by promoters for the services of assisting applicants for the disability tax credit. In particular, the bill would restrict the fees that can be charged or accepted by promoters to prepare a request associated with a disability tax credit, DTC, under the Income Tax Act. It would prohibit charging or accepting more than the established maximum fee and would introduce offences and penalties for failure to comply. The bill would introduce a requirement that promoters notify the Canada Revenue Agency when more than the maximum fee has been charged. The provision of the bill would come into force on a day to be fixed by the order of the Governor in Council, at which time the proposed maximum fee would be made public.

This is not an attempt to crack down on those legitimately claiming the credit or to deny claims. It is an attempt to make sure those who qualify and those who require the tax credit are able to receive it without paying unfair charges.

As member of Parliament for the rural eastern Ontario riding of Renfrew—Nipissing—Pembroke, I understand, as does our government, that Canadians can have a difficult time making ends meet. As a result, we offer a very generous range of credits. These tax credits are a key component of our economic action plan, which is a plan for jobs, growth and long-term prosperity that is working for Canadians as we face a global economic downturn.

Examples of important credits include the universal child care benefit, the Canada child tax benefit, children's fitness tax credit, children's art credit, volunteer firefighters credit, first-time home buyers' tax credit and public transit tax credit, just to name a few. These are all credits I encourage my constituents to take advantage of, if they can, and to come to my constituency office where we will help them apply, no charge.

I have spoken to the minister and, to be clear, if individuals qualified for the disability tax credit in 2007 or 2008, say, and their medical situation is the same now as then, they would absolutely qualify for the credit. This is about protecting Canadians from predatory and unfair practices of unregulated promoters. This credit is not intended to line the pockets of promoters.

The disability tax credit promoters are currently totally unregulated. This is producing a system that is increasingly ripe for abuse. Lawyers charge contingency fees, but they are bound by strict codes of ethics, and bar associations carefully scrutinize actions to ensure appropriate professional ethical behaviour.

Perhaps most appropriate for today's discussion is that tax preparers are guided by the Tax Rebate Discounting Act and capped at what they can charge for their service. An accountant cannot take 20 minutes, prepare and submit one's taxes and then charge 40% of one's refund. Tax preparers also have a professional organization that promotes ethics and peer review of business practices.

I chose not to set a maximum fee in the legislation because I wanted to allow for consultations with disability groups, medical professionals and legitimate tax professionals to help inform this decision.

I want to ensure that disabled Canadians who do need the help of someone with their applications can get it and we are not imposing unnecessary red tape on doctors or legitimate tax preparers.

There is a rate set in the Tax Rebate Discounting Act for accountants and others who may be part of the discussion on the disability tax credit consultants. The rate under the tax rebate discounting allows for a $45 fee on the first $300 and 5% on amounts above $300. This fee level is something I would expect would be raised during the consultations. There are no similar accountability measures for the disability tax credit—

[Michel Bédard]

Bill C-462 will restrict the amount of fees a consultant can charge in respect of a disability tax credit request.

This bill does not appear to be outside federal jurisdiction. It does not appear to clearly violate the Constitution, including the charter. It does not concern questions on private members' bills already voted on in the current session, and it does not concern questions currently on the order paper as items of government business.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

moved for leave to introduce Bill C-462, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

Mr. Speaker, I am honoured to rise today to table my private member's bill, An Act restricting the fees charged by promoters of the disability tax credit and making consequential amendments to the Tax Court of Canada Act.

A person is judged by how they help the less fortunate. Unfortunately, as can be with any government program, there is always the possibility of abuse.

Since 2005, when the federal government began issuing refunds retroactively for the disability tax credit, there has developed a growing collection of consultants offering to provide so-called help to disabled Canadians in securing these credits. Disabled Canadians, who are often in a vulnerable position, are being misled into signing away as much as 35% or more of the refund that they are entitled to receive, simply for the consultant to fill out a two-page form.

Concerns have been raised by those in the medical profession who feel they are being pressured to fill out forms fraudulently by some of these consultants.

Currently these consultants are totally unregulated. My private member's bill seeks to regulate these consultants by restricting the fees they can legally charge to disabled Canadians.

I urge all members to support this bill. Let us make sure the support this Parliament has voted to assist disabled Canadians ends up in their pockets.

(Motions deemed adopted, bill read the first time and printed)