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.

Disability Tax Credit Promoters Restrictions Act

[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—

[The Acting Speaker, Conservative, Bruce Stanton]

Order, please. The time for the first speech is now at its limit. We now go to questions and comments.

The hon. member for Saint-Michel.

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

Mr. Speaker, I commend the member for introducing the bill. It is a good idea. First, I am shocked a Conservative has presented a bill that would require more regulation, on which I am not totally sold.

In her bill, she says that the definition of a promoter means a person who directly or indirectly accepts or charges a fee in respect to a disability tax credit. Who is a promoter exactly? Is a doctor, or a lawyer or an accountant considered a promoter?

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

Mr. Speaker, that is an excellent question from my colleague opposite. We are looking at third party promoters quite apart from the regular tax preparers and accountants. It is a new cottage industry that sprung up once the 10-year retroactive provision was made. It recognizes that there are volunteer organizations and even constituency offices that do this type of work. They help constituents fill out applications for tax credits. There is a provision for exemptions so people who volunteer their time at no charge or doctors do not fall into this.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, I commend the member for the bill. It seems very useful indeed. There are hundreds of millions of dollars going in unwarranted profits to people who would prey on the most vulnerable Canadians. I applaud her. I will be supporting the bill and I hope all members will as well.

Why specifically did she not set out a maximum fee in relation to the contingency fee charged? I know in Alberta there was talk of this for some period of time in relation to solicitor fees and that was capped at 30%, about 12 years ago, from an unregulated industry. I know that was met with much applause in the industry in Alberta. Did she do much research on this and why she did not set a particular maximum fee?

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

Mr. Speaker, I thank the member for his indication that he will be supporting my bill.

The reason I did not set a specific fee is that we wanted to have consultations with the tax credit promoters and people with disabilities. Some people do want that extra help apart from the regular tax preparers. We want input from tax preparers, as well as accountants and medical professionals. We will be doing the consultations and announcing what the allowable fees will be at that time.

[Lise St-Denis, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, the member sitting nearby has just said that swindlers were putting hundreds of millions of dollars in their pockets.

What is the percentage of persons with disabilities who are entitled to a tax credit and are thus being defrauded?

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

Mr. Speaker, I made reference to the promoter who said that he had spent $25,000 on promoting.

In reference to the question on what number of people are eligible, CRA says that 200,000 new applications are received on a yearly basis. Insofar as what number of people are swindled or how much goes to the tax preparers, we do not know because it is totally unregulated. That is why we are putting these provisions into place so we can keep track and ensure that the tax promoters are being fair to Canadians living with disabilities.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, first, I want to commend my colleague for introducing this bill.

Many of the people in Parliament have spent a lot of time with persons with disabilities. We quickly realize they are the most vulnerable. This bill drives at protecting and ensuring the most vulnerable are not taken advantage of, and I commend her that.

My question has to do with the services she provides in her constituency offices, without, I would think, any additional staff than would normally be in an office. How many constituents avail themselves of that service?

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

Mr. Speaker, I thank the hon. member for Brant for seconding my bill and for all the work he has done throughout his lifetime in helping people with disabilities.

In terms of my office, we keep statistics. Now that the disability tax credit profile has been raised, we receive more people. On a weekly basis, we would probably see anywhere from 80 to 100 people and of those, there are maybe 20% on taxes. Again, it depends on the season.

On a number of occasions, we help people get their disability tax credit. It can amount to the tens of thousands of dollars if it is on a retroactive basis.

[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.

[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.

[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.

[The Acting Speaker, Conservative, Barry Devolin]

Resuming debate, the hon. member for Montcalm has eight minutes remaining this evening.

[Manon Perreault, NDP, Montcalm, QC]

Mr. Speaker, I support this bill because it will prevent abuse by disability tax credit promoters by restricting the fees they can charge for requesting a determination of disability tax credit eligibility on behalf of a person with a disability.

This is an entirely reasonable initiative because certain rather unscrupulous individuals are preying on less fortunate people. This is a major problem, and the growing number of promoters has resulted in cases of fraud, as evidenced by a 2011 CBC report.

I agree that a study is needed to shed light on certain issues and answer some questions. More information is needed on how the bill’s provisions will be implemented. I will get into that a little more later.

Promoters must be stopped from abusing the system, but we must also realize that not all promoters are guilty of abuse.

Two things need to be considered. On the one hand, some promoters genuinely want to and can provide top-notch service to Canadians with a disability who would not be able to request a disability tax credit without their assistance.

A distinction must therefore be drawn between promoters who abuse the system and those who act as consultants and truly help persons with a disability to obtain a disability tax credit, which they undoubtedly would not have been able to secure on their own.

On the other hand, many promoters are swindlers who promise people that they will qualify for the disability tax credit, even though their eligibility is questionable, and charge fees amounting to as much as 40% of the benefits. It is truly disgraceful.

Nothing can justify their charging fees of this nature, especially given that tax refunds are retroactive and can result in payments totalling thousands of dollars.

Therefore, restricting the fees that can be charged by promoters is a positive move to prevent the abuse of persons with a disability.

This bill will prohibit promoters from charging more than an established maximum fee set by the Governor in Council.

Of course, this raises questions like knowing how and when the public and promoters will be informed.

The fact that there could be exemptions for some promoters leads to the question of which promoters will be exempt.

The other important issue concerning the disability tax credit is the fact that those applying will also need to have government support. This support is being jeopardized by the government’s cuts to the Canada Revenue Agency. Owing to the lack of resources at the agency, it cannot properly inform the public and make those concerned aware of the tax credit or deal with the demand by providing information sessions on the disability tax credit.

Staffing cuts, particularly for regional program officers, have led to the closing of CRA offices where Canadians are accustomed to meeting an advisor who can give them more information and direct them to the proper resources.

It is important to ensure that people with a disability have equal access to the tax credit, which is not currently the case. The bill does not solve any of the many problems with the tax credit, including accessibility.

The application process is still complex, and the tax credit is difficult to obtain. The application process therefore needs to be simplified.

Unscrupulous consultants focus on these people precisely because they know that the process is complex. The terminology and definitions used in the certificate are restrictive and unfair and lead to inconsistency and discrimination.

Participants have described the process of obtaining a tax credit as difficult, lengthy and exhausting. They have a great deal of difficulty understanding the form and in some instances, never complete it.

Some do not even take the trouble to apply because they feel that it is a waste of time. Under such circumstances, many turn to consultants.

Eligibility for the tax credit requires a significant impairment that prevents a person from taking part in everyday activities. This means that people with episodic disabilities or mental illness are often excluded. Indeed, it is difficult for them to prove that their everyday activities have been significantly altered, either because this is the case on some days and not others, or because they are physically capable of engaging in these activities, but incapable of doing so mentally or emotionally.

This determination based on the patient's basic activities of daily living is a real problem. The definition is restrictive and contradictory. It is contradictory because it differs from the provincial and territorial definitions to which practitioners refer and from definitions used by other programs, such as Canada pension plan disability benefits.

The other problem is that it depends on the understanding and good will of medical practitioners to fill in the required forms. Qualified practitioners have great difficulty filling in the certificate, especially in view of the complexity of certain disabilities and their evaluation according to the definition of the patient's basic activities of daily living.

Some people have been rejected simply because their doctor gave them poor advice, based on a mistaken understanding of the eligibility criteria. Even when the forms are filled in correctly, the decision about who is accepted and who is rejected can appear arbitrary and unpredictable. Any kind of family support may make a person ineligible for the disability tax credit because such support allows that person to function at a higher level. Many participants and practitioners question the reliability of the certificate on which the eligibility determination is based.

The tax credit was established to recognize some of the extra expenses that persons with disabilities have. It has become the prerequisite for almost all federal programs related to disability, such as the registered disability savings plan.

Thus, many people with disabilities are excluded from these income security programs that could help them attain a modest but sufficient level of income, to save for their future and reduce their stress levels. What we need, as soon as possible, is a plan to provide income security for all individuals with disabilities, including those with low incomes.

The programs now in place do not work together harmoniously to provide income security for people with recurring health problems. They include Canada pension plan disability benefits, employment insurance sickness benefits and registered disability savings plans. This all leads me to say that income support measures must work together to ensure real financial security for persons with disabilities.

Returning to the disability tax credit, the certificate specifies that to be eligible, a person must have a severe and prolonged impairment in physical or mental functions for a continuous period of at least 12 months. That effectively excludes people with recurring illnesses. The question is not new. It was raised by the Liberal government in 2002.

That said, I think the bill is essential in order to deal with the problem of abusive fees charged by promoters, and it is a good start. Still, a thorough study will be very useful.