Thank you very much for the opportunity. I want to thank all of you for your interest in this subject. I see pretty much a full table. I think that's important in terms of the interest in disability issues.
The Disability Tax Fairness Alliance is a coalition of more than 25 members. We're committed to ensuring that the administration of the disability tax credit reflects the realities of the people with disabilities, as well as the parliamentary and legislative intent of the tax credit.
I'm also a member of the disability advisory committee established by the Honourable Diane Lebouthillier last year. Our mandate is to advise the Canada Revenue Agency on interpreting and administering tax measures for Canadians living with disabilities in a fair, transparent and accessible way. This disability advisory committee existed in 2005-06. I was a member also. Unfortunately, it was disbanded at that time and now it has been reinstated.
For more than 20 years, I have advocated fairness for individuals living with chronic and persistent psychiatric disorders, where individuals are markedly restricted in their mental functions all or substantially all the time, as required by the Income Tax Act, even though the external signs and symptoms may be perceived to be intermittent or episodic.
People living with so-called episodic disabilities face unique barriers qualifying for the DTC, largely because the disabling effects of their conditions are not well understood by policy-makers.
In 1998, my husband, Jim, severely impaired by bipolar disorder, was denied the DTC. The reason was that the federal government did not recognize that people living with mental illnesses could be as severely impaired as those with physical impairments. I successfully appealed on his behalf to the Tax Court of Canada, and that decision was upheld by the Federal Court of Appeal.
Although psychiatric disorders are chronic medical conditions, many individuals benefit from drug therapy and are able to live well. Still, a small percentage continue to be vulnerable to a wide range of symptoms affecting the way they think, feel and relate to others. The unpredictability of symptoms of the condition, which is always present, can create marked restrictions on their mental functions.
CRA defines the phrase “all or substantially all of the time” as being at least 90% of the time. Even though this arbitrary guideline is not supported by legislation or jurisprudence, CRA enforces its narrow and technical interpretation of the Income Tax Act with impunity, making it virtually impossible for many individuals living with episodic diseases to access the tax credit.
Numerous Tax Court of Canada cases indicate that the 90% threshold is not a suitable guideline for complex medical conditions, where the expressions of symptoms may be perceived to be intermittent. I will share two of them with you, and there are more in my submissions. You can find additional Tax Court cases regarding the subject on my personal website, www.fightingforfairness.ca.
In Bruno Maltais v. The Queen, Judge Alain Tardif recognized that individuals living with mental impairments did not exhibit these symptoms continuously, stating the following:
The vulnerability for a relapse was always present even though the outward signs are not always visible or apparent. Moreover, a person who has such a disability may break down at any time without there being any indications or warning signs.
In Peggy Doe v. The Queen, Judge Gerald J. Rip also noted in his ruling the special circumstances of an individual diagnosed with epilepsy as well as a number of psychiatric disorders, including PTSD:
When a person does not know from one moment to another when a seizure will occur—but knowing a seizure will occur, even with medication—that person's ability to perform any activity, including an activity of daily living, as defined, is markedly restricted.
In recent years, eligibility for the DTC has enabled Canadians with disabilities to access numerous other federal and provincial income support programs, including the registered disability savings plan.
However, the loss of DTC eligibility means not only that the RDSP must be terminated, but also that all grants and contributions made by the government in the previous 10 years must be repaid. The majority of individuals living with so-called episodic diseases are required to reapply for the DTC every five years. Thousands of these reapplications have been denied without a valid reason, even for individuals who have been receiving the tax credit for 20 years or more. The cumulative total repayment of government contributions since 2010 is $52 million—$52 million has been clawed back. Such a practice is unconscionable.
Our alliance has two recommendations. First, address the systemic problems and inequities in the administration of government income-support programs for people living with chronic and persistent mental impairments, to ensure parity with physical impairments, even though the signs and symptoms may be perceived to be intermittent. Second, amend the terms of RDSP withdrawals for Canadians with disabilities who are denied the DTC, in order to prevent clawback of contributions made by the federal government in bad faith.
Thank you very much for this opportunity to share our concerns and recommendations.