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 bill was last introduced in the 41st Parliament, 2nd Session, which ended in August 2015.

This bill was previously introduced in the 41st Parliament, 1st Session.


Cheryl Gallant  Conservative

Introduced as a private member’s bill.


This bill has received Royal Assent and is now law.


This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.


All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.


March 6, 2013 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:05 a.m.
See context


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—

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:10 a.m.
See context


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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:20 a.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:30 a.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:40 a.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

November 4th, 2013 / 11:50 a.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:05 p.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:15 p.m.
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Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, we have already discussed the matter in the Standing Committee on Finance, of which I am a member. We did in fact hear interesting evidence from people in the medical field, particularly some who work with persons with disabilities. We also heard evidence from someone who represented the consultants on the tax credit for persons with disabilities.

A number of amendments were proposed by the Conservative Party, and we supported them. The NDP is in fact going to support the bill and the amendments that were proposed.

However, we do have a number of concerns, which we raised in committee. I would like to take this opportunity to present them once more. There is the question of the ability to complete these forms oneself. The complexity of the process means that such consultants are needed or that some persons with disabilities feel a need to consult experts.

Clearly, the Conservative cutbacks at the Canada Revenue Agency, particularly the closing of its service counters, will make it difficult or impossible for people to obtain information and manage without help from such consultants.

I would like to hear the reaction of the member who introduced the bill, to know if it would be possible for the government to make changes within the Canada Revenue Agency to make things easier for those who apply for the tax credit on their own.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:20 p.m.
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Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, with this bill we recognize that some Canadians living with disabilities do need assistance in completing these forms, which is why we are trying to implement some restrictions so that those who genuinely need the help will get it and the promoters will receive a reasonable fee.

For those more complicated cases that involve more time, it would be a graduated system. That is why the consultations will occur: to ensure that the more intensive applications and the time-consuming applications will provide for appropriate compensation.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:20 p.m.
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Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I thank my colleague for introducing this bill. The reason why I will personally support it is that it will enable us to crack down on certain abuses.

Unfortunately, what my colleague does not mention—and she supports this—is the radical service cuts at the Canada Revenue Agency, cuts that we have seen in Quebec City, where people are now facing closed doors and are unable to obtain services from a public servant. This turns people toward professional services, which they unfortunately have to pay for.

I would like my colleague to tell me why she supports these radical service cuts and this complete lack of customer service at the Canada Revenue Agency.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:20 p.m.
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Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, I wish to thank both colleagues who have asked me questions for stating their intention to support this bill.

In terms of helping people fill out forms, the medical profession has to fill out part B. In some instances, part A is difficult, especially depending on the specific disability that a person may have. I know that through their constituency offices, many members in this House assist people in filling out the first part of the form and assist in having it processed through CRA. Just as there are constituency workers doing this, there are also volunteers in the community, and the first step, which is making people aware that this disability tax credit is available to them, is the most important step of all.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:20 p.m.
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Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I am pleased to rise and to note the good intentions and the gesture of the member for Renfrew—Nipissing—Pembroke.

It is indeed very important to combat abuses by sleazy promoters who try to take advantage of vulnerable people in our society.

However, further to the question I asked the member, I must condemn in this House the radical measures the Conservative government has taken. Those measures strip vulnerable and disadvantaged people of all the resources that would enable them to do their duty as taxpayers. This is something quite basic.

As a member and a Canadian citizen, I believe that my duty as a taxpayer should be as easy to do as my duty as a voter. This is a civic action. It is an action that the Canadian government must actively support. In the case of our fiscal duty, it is also an action that is being impeded, denied and even flouted. In fact, it is being flouted and suppressed. This discourages a lot of people and leaves them at a loss with respect to the government and to their place in society and the contribution they can make to it.

I am going to talk about a personal case. In fact, I am going to recall a childhood memory. I am going to talk about my father, Étienne Côté, who was a carpenter and cabinetmaker and a union activist for more than 10 years. He also filed his tax returns and maintained his own car. He liked to do mechanical work and solve all kinds of problems.

I must say that I inherited some of my father's character traits. He taught me a lot of things. I started completing my own tax returns as a teenager, and I have continued to exercise that discipline. Somehow or other, I have always completed my own federal and provincial income tax returns—Quebec is a special case in that regard—despite the increasingly complex nature of the forms people have to fill out.

Consequently, for nearly 30 years, I have been a privileged witness to this growing complexity and the fact that people are increasingly at a loss with regard to it all. This year, I am completing income tax returns for other people who feel completely overwhelmed. That is not right.

I want to talk about what the bill does not address, without taking anything away from my colleague's very positive gesture.

Completely cutting all the services that the Canada Revenue Agency provides to taxpayers is a radical action.

This summer, while I was going door to door, I talked to some Canada Revenue Agency employees who told me that people are needlessly going to the federal building on Rue d'Estimauville, where they are told that there is no service counter on site. Then they have to go back home and surf the Internet or, at worst, try to reach a public servant by telephone, which is virtually impossible, from what they told me.

I do not use those services. I have the good fortune and great privilege to understand a number of the finer points of taxation, although I admit I have been stumped in the past by its absolutely incredible complexity, which is intolerable in our society.

This is a very serious problem. When we talk about the disability tax credit, we are talking about a tax credit that grants very large amounts of money every year.

Like my colleague from Burnaby—New Westminster, who has been doing this for several years, I organized an information session on those credits.

Some people were able to collect thousands of dollars in arrears, going back as many as 10 years. Some of my colleagues told me there had been refunds of $13,000 to $14,000 going back 10 years, because people had unfortunately been unable to declare their own incomes and fully exercise a right granted by law. That right is being denied them because filing an income tax return has become a virtually impenetrable exercise.

We are not just talking about personal returns, but about corporate returns as well. Corporate taxation is also an enormous challenge because there are a lot of loopholes and vote-getting measures. Those measures add an incredible number of lines to the income tax return form, not to mention the additional pages needed so that you can use a specific line.

It is not surprising, after what I have recently learned, that fewer than 40% of Canadian taxpayers successfully navigate their income tax return, do their duty and get the credits to which they are entitled.

Let us imagine someone who is already debilitated by illness, by physical disability following an accident or by advanced age and who can benefit from this fabulous disability tax credit. Then let us imagine him trying to find information in that thick document that explains the multi-page return. You could very easily miss it, especially since people do not readily understand the scope and the limits of the tax credit, or which field covers the whole thing.

The tax credit is remarkable, as it affects a great number of people. However, many people simply do not know whether they qualify for it.

While I welcome my colleague’s attempt to curb the frankly criminal abuses of the situation by certain people in our society, the government is systematically refusing to deal with the growing complexity of the federal tax system and the basic need for simplification. In fact, the reverse is true; in the past eight years, the government has contributed significantly to this increased complexity by bringing in many different tax credits that are designed to win votes.

I am thinking for instance of the transit tax credit, which every week gives back less than a handful of quarters and makes absolutely no contribution to improving public transit in our cities and municipalities. I can attest to this myself, as a resident of Quebec City.

I am going to repeat what is probably the most shocking aspect of this debate: very quickly and very dramatically, the Canada Revenue Agency’s client services have been slashed. I will never be able to say often enough that these cuts are weakening the social fabric and impeding people’s right to do their duty in the right conditions, without making errors in good faith and possibly being criticized for it. We must continue paying particular attention to this.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:30 p.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:40 p.m.
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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.

Disability Tax Credit Promoters Restrictions ActPrivate Members' Business

October 24th, 2013 / 6:50 p.m.
See context


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.