Bill C-462 (Historical)

Disability Tax Credit Promoters Restrictions Act

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

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

COVID-19 Emergency Response

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Canada Revenue Agency

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

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

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

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

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

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

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

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

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

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

Further COVID-19 Measures Act

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

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

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

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

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

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

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

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

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

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

The disability tax credit is a non-refundable tax credit that reduces the amount of income tax that either individuals living with disabilities or their supporting persons have to pay. Parliament voted in this tax credit, with the recognition that Canadians with disabilities faced extra financial challenges. Bill C-20 proposes payments of up to $600 for Canadians living with disabilities.

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

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

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

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

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

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

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

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

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

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

Persons with Disabilities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Finance

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

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

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

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

Disability Tax Credit Promoters Restrictions Act

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Phil McColeman, Conservative, Brant, ON]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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