Bill C-462 (Historical)

Disability Tax Credit Promoters Restrictions Act

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

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

Disability Tax Credit Promoters Restrictions Act

[Stella Ambler, Conservative, Mississauga South, ON]

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

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

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

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

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

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

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

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

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

[The Acting Speaker, Bruce Stanton]

The hon. member for Mississauga South will have six and a half minutes remaining in the time for her remarks when the House next resumes debate on the question.

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

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

[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 adviser.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[The Acting Speaker, Barry Devolin]

Order, please.

Resuming debate. The hon. member for Cape Breton—Canso.

[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.

[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.

[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 enrolment 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 adviser 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 adviser. It is high time the government reviewed its budget cuts and stopped saving money at the expense of the disabled and those most in need.

[Guy 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 adviser 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.

[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.

[The Acting Speaker, Barry Devolin]

The time provided for debate has expired. Accordingly, the question is on the motion.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker, Barry Devolin]

(Motion agreed to, bill read the third time and passed)