moved that the bill be read the third time and passed.
Mr. Speaker, thank you for the opportunity to once again outline the necessity and the benefits of the disability tax credit promoters restrictions act, a crucial step toward ensuring the fair treatment of all Canadian taxpayers. It is vitally important that we see Bill C-462 through to completion as quickly as possible so that we can better protect disabled Canadians from the predatory practices of some disability tax credit promoters.
I also wanted to say how extremely proud I am that this act has achieved such widespread support from parliamentarians and from the many Canadians who appeared before the Standing Committee on Finance, which held public hearings regarding this legislation.
The fact that my bill has the support of all parties reinforces something that all members of Parliament recognize. We must take action to solve the problems caused by those individuals who seem willing to take advantage of Canadians with disabilities. Whatever our political affiliation, we realize that Canadians living with disabilities face exceptional challenges. We understand that the last thing they need is to see an important source of additional income reduced by tax promoters who would profit from these very challenges.
Of course, I am not suggesting that all of these businesses deserve such hard criticism. This legislation is not directed toward legitimate tax practitioners who provide a valuable service. Make no mistake; this bill is all about going after those whose intentions are not so honourable.
Before highlighting the important improvements we propose to make, let me remind the House of the purpose of the disability tax credit. It is meant to assist Canadians if they are unable to perform one or more of the basic activities of daily living, not occasionally, but all of the time or substantially all of the time, even with therapy and the use of devices and medication. The restriction must be expected to last continuously for at least 12 months and must be present at least 90% of the time. The kind of basic activities of daily living I am referring to include things like speaking, hearing, and feeding oneself.
The disability tax credit is meant to help offset some of the additional costs people incur to enable them to perform these everyday functions. Based on 2012 numbers, the federal tax savings for someone eligible for the disability tax credit was up to $1,132 for adults and as much $1,792 for children under the age of 18 or for a family member supporting the person.
It is important that Canadians living with a disability have access to all the support they need. When taxpayers apply and qualify retroactively, they can receive anywhere from $10,000 to $15,000. This represents a significant amount of money. It is important to ensure that these funds remain exactly where they belong, in the pockets of Canadians living with severe disabilities.
The significant sums of money involved created an incentive for a new class of third-party promoters to assist Canadians with disabilities with their claims. These higher numbers spawned a whole new industry of disability tax promoters. These businesses help people fill out just the first part of the tax form to qualify for the disability tax credit, often at a very steep price. We have seen some inordinately high fees charged to people who use tax promoters' help to qualify for the tax credit.
There have been cases of Canadians with disabilities being charged as much as 35% to 40% of the total amount they were due. That can add up to thousands of dollars for something that is really quite simple to do. Let us remember that these businesses generally just complete part A of the disability tax credit application form, a fairly straightforward process; the more important section of the application form, part B, must be completed by medical practitioners before a claim can be processed.
I first became suspicious about all of this a few years ago when I came across a tax credit promoter who told me he had spent $25,000 booking space, a hotel, and media coverage in my riding. Obviously, with an investment like that he was expecting to make a very healthy profit.
The high cost of completing just the initial step in an application is one that Canadians living with disabilities can ill afford. People who face extra costs for the supports and services they require for daily living sometimes end up with as little as 60% of the total amount of the disability tax credit that they are entitled to receive; the rest goes into the promoter's pockets.
Until now promoters have been able to get away with an unreasonable share of this money, as there are currently no regulations or restrictions to stop them, but I am proud to say that will stop with the passage of the disability tax credit promoters restriction act. As its name implies, its purpose is to put restrictions in place to make sure that the money stays in the pockets of Canadians who really need it, not tax promoters.
This legislation earned the praise and support of many who appeared before the House of Commons Standing Committee on Finance, most notably members from the medical community. We have been told by medical professionals that they at times have felt pressure from promoters to fill out forms fraudulently . We even heard that some promoters employ in-house medical practitioners to sign the medical portion of the disability tax credit application, perhaps having met only once with the applicant and having no prior knowledge of the person's medical history.
Dr. Gail Beck, a member of the board of directors of the Canadian Medical Association, told committee that:
...the Canadian Medical Association is pleased that this bill is being prioritized by the House of Commons. This is an important step toward addressing the unintended consequences that have emerged with the disability tax credit....
Dr. Beck went on to say that the Canadian Medical Association has been concerned for some time about the unintended consequences of the changes that were made to the disability tax credit in 2005. She said:
These consequences include fraudulent claims and tampering of forms by third parties, and they have resulted in an increase in the quantity of forms, which, to quote one of my colleagues, contributes to an avalanche of forms in physicians' offices like their own. In some cases, these third parties have even placed physicians in an adversarial position with their patients.
We are pleased that this bill attempts to address the concerns that we have raised.
Dr. Beck was not alone. Dr. Karen Cohen, chief executive officer of the Canadian Psychological Association, told the committee that:
The Canadian Psychological Association supports this bill because excessive fees charged by promoters should be restricted, especially when they too may involve any misunderstanding of eligibility.
Particularly important to me was the testimony of Carmela Hutchison, president of the DisAbled Women's Network of Canada and a member-at-large of the executive committee of the Council of Canadians with Disabilities. She is someone who knows far better than most of us just how much this legislation is needed.
Ms. Hutchison said:
[Both organizations] support the intent of Bill C-462 and agree that people with disabilities should have their rightful entitlement protected from unfair fees charged by financial promoters. Disability tax credit eligibility is a critical issue for people with disabilities, as it has become the gate for determining eligibility for a variety of benefits. Thus, we must ensure unencumbered and fair access.
That message applies to all parliamentarians, who need to lend their support to this legislation. When Bill C-462 becomes law, Canadians with disabilities who choose to use a promoter's services to apply for the disability tax credit will pay a reasonable fee for those services.
The proposed bill would restrict the fees that can be charged or accepted by businesses that request a determination of eligibility for Canadians with disabilities to receive the tax credit. Public consultations would be carried out to assess just what appropriate maximum fees should be, given the value of the services provided.
Once that fee is determined, the legislation would prohibit charging more than the established amount. The disability tax credit promoters restrictions bill would also require promoters to notify the Canada Revenue Agency if more than the maximum fee were charged. A penalty of $1,000 would apply if that limit were exceeded. A promoter failing to notify the CRA when an excess fee was charged would be guilty of an offence and liable to an additional $1,000 to $25,000 fine.
Another important element of this bill is its benefit for caregivers of people living with severe disabilities. The bill would decrease the cost of applying for the disability tax credit, freeing up more money for better care for their loved ones.
Clearly there are numerous compelling reasons to support the swift passage of this legislation. Bill C-462 would allow us to set new and necessary limits on the fees promoters can charge Canadians with disabilities, and it would provide better oversight of the industry. Let us get on with it.
I am calling on all parties to lend their stamp of approval to the disability tax credit promoters restrictions bill. Canadians with disabilities all across the country are counting on us to do exactly that.