Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue No. 36 - Evidence - February 7, 2018
OTTAWA, Wednesday, February 7, 2018
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 4:20 p.m. to continue to examine and report on issues relating to social affairs, science and technology generally (topic: registered disability savings plan and disability tax credit).
Senator Art Eggleton (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
I’m Art Eggleton, a senator from Toronto. I’m the chair. I would ask the senators who are here to introduce themselves, starting on my right.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Raine: Nancy Greene Raine from British Columbia.
[Translation]
Senator Mégie: Marie-Françoise Mégie from Quebec.
[English]
Senator Bernard: Wanda Thomas Bernard, from Nova Scotia.
Senator Munson: Jim Munson, Ontario.
[Translation]
Senator Petitclerc: Chantal Petitclerc from Quebec.
[English]
The Chair: Today we continue with the second of three meetings dealing with a review of the Disability Tax Credit and the Registered Disability Savings Plan. You’ll note on the agenda it says the panel is from 4:15 p.m. to 5:15 p.m. It’s not. We have one panel today so we can go as long as necessary, up until 6 p.m., so we can go back to the normal questioning regime.
We have three witnesses here today. First, we have Al Etmanski, Ashoka Fellow, Community Organizer and Social Innovator. It was his proposal and efforts that led to the RDSP, which is the subject matter today. From the Canadian Association for Community Living, we have Brendon Pooran, Senior Advisor, and we have the Juvenile Diabetes Research Foundation, David Prowten, President and Chief Executive Officer, and Patrick Tohill, Director of Government Relations.
Welcome to all of you. We will now proceed to your opening comments for seven minutes or so. I will start with Mr. Etmanski.
Al Etmanski, Ashoka Fellow, Community Organizer and Social Innovator, as an individual: Greetings from the West Coast. Thank you for this opportunity and indeed for your continued interest in matters related to the Disability Tax Credit and the Registered Disability Savings Plan.
Mr. Chair and members of the committee, I know you’ve already received and will continue to receive detailed submissions that will no doubt improve the administration and eligibility of Canadians who experience disabilities to the Disability Tax Credit and the RDSP.
I would like to speak as someone who, as the senator suggested, was involved for 12 years in the RDSP campaign and involved with three different prime ministers’ offices as well, but I am no longer involved in the day-to-day details of the RDSP except as far as my own daughter is concerned. I would like to take a more reflective view based on the origins of the RDSP and what I think are some of the implications now that we’re almost 10 years into it.
The idea for what became the Registered Disability Savings Plan emerged from the experience of families worried about what would happen to their family member experiencing a disability, especially after mom and dad died or became infirm. These families created the Planned Lifetime Advocacy Network, PLAN, and asked my wife Vickie Cammack and I to join them as they searched for answers.
They soon realized that despite the existence of an array of programs and services, they didn’t have any peace of mind about the future well-being of their sons or daughters or family members. That was for three reasons. One, program supports were subject to the ups and downs of government funding. Two, services for people with disabilities tend to isolate people with disabilities from communities. Three, service providers, with notable exceptions, seldom know the individual, the person, the way family members do. Staff come and go and, because of job responsibilities, they can’t pay enough attention or come to know the individual the way family does.
Our search for answers to the question what happens when we die forced us to rethink a lot of the assumptions associated with disability, and we concluded as parents that two of the biggest handicaps faced by our sons and daughters with disabilities are their poverty and their isolation. The proposal for a savings plan was our response to the challenge of poverty.
We had two practical goals that resonated with Canadians with disabilities and their families all over the country. The first was to enable people with disabilities to receive financial support, including from their families, and to accumulate financial assets without penalty, clawback or disentitlement to other government benefits, and second, to receive this income when they most needed it, when they were young adults and their parents were still alive. It was not conceived as a retirement plan. Discretionary trusts, or Henson trusts as they are known in Ontario, are a better vehicle for dealing with that. Our model was more like the Registered Education Savings Plan, although I might add, sadly, that the RDSP seems to be being marketed as a retirement plan, which I think is limiting its availability and the full use of its funds.
Nearly 10 years later, I would observe that notwithstanding the oversights and gaps and misadventures with the RDSPs that others are identifying and will identify, two things are clear. One: Economic citizenship for people with disabilities makes a big difference for dignity, for agency, for pride, for confidence and self-worth, four billion dollars worth. Two: The capacity of provinces and territories to eliminate the soul-destroying aspects of welfare has been established. Governments all over Canada have essentially said to people with disabilities and their families, “We trust you to spend RDSP income on what you think is best. You don’t have to report. You don’t have to justify.”
I think enough precedents are being set to begin to think about moving all supports for people with disabilities out of the welfare system, which leads me to the following five recommendations.
The first is automatic enrolment in the RDSP once someone becomes eligible for the Disability Tax Credit or they become eligible for the equivalent of disability welfare benefits at the provincial and territorial level.
The corollary recommendation, number two, is to remove all CRA responsibility for administering the program and for assessing and determining eligibility. We want that arm of the government to go after people who cheat the tax system. The mentality that that requires should not be associated with the RDSP. From the start, the invitation to create an RDSP was meant to be welcoming, not punitive. People with disabilities and their families are not cheats.
Third, ensure the forthcoming accessibility legislation that will be introduced soon by the minister responsible for persons with disabilities overtly addresses the poverty experienced by too many people with disabilities. Economic accessibility or economic citizenship is the engine of accessibility.
The fourth recommendation is to include people with disabilities into your very excellent work on a case for basic income. To kick-start that, it would be useful to convene a national forum on the need for a guaranteed annual basic income for Canadians with disabilities.
Fifth, establish an independent Registered Disability Savings Plan action group comprised of people with disabilities, their family members, advocacy groups, lawyers, doctors, foundations, financial institutions, provinces and territories to work out the kinks in the existing programs and its administration. I recommend as a model the very excellent Registered Disability Savings Plan Action Group that has been established in British Columbia in tandem with the government of British Columbia.
Ladies and gentlemen, we are getting better as a society at closing the poverty gap for seniors and low-income families. The impact of the RDSP to date has brought us close to addressing the poverty of people experiencing disabilities in a comprehensive way, so close that I can almost taste it. Thank you.
The Chair: Thank you very much for your five suggestions. We all wrote them down furiously here.
Let me go to the other person on our video screen, Mr. Pooran. I don’t know where you’re located — Mr. Etmanski is in Vancouver — but welcome, wherever you’re calling from.
Brendon Pooran, Senior Advisor, Canadian Association for Community Living: I’m not too far away. I’m in Toronto.
The Chair: Thank you. Go ahead.
Mr. Pooran: Good afternoon. Thank you for providing me with the opportunity to speak with you today. My name is Brendan Pooran, and I’m a senior legal adviser to the Canadian Association for Community Living.
Given the limited time available for comment, I’ll focus my time on tangible recommendations that will improve access and outcomes for people eligible for both the Disability Tax Credit and the RDSP.
I’ll start off with the Disability Tax Credit. Generally speaking, we are hearing from our community members that some people with intellectual disabilities are currently being denied and/or losing eligibility after the DTC has been in place for a number of years. This worries our members, given the resulting loss of benefits, in particular the government contributions made to peoples’ RDSPs.
In terms of specific recommendations related to the DTC, I’m going to offer six here today.
First, intellectual disabilities are likely to be lifelong in nature, yet many people are required to reapply for the DTC throughout their lifetime. This adds unnecessary stress, time and expense to those entitled to benefit from the certificate. It also results in an unnecessary strain on resources within the medical community and the public sector given the additional need for qualified practitioners to complete forms, public servants to adjudicate applications and government lawyers to defend appeals.
Second, DTC policy is still very much based on the medical model. Policy should be analyzed to ensure that it is consistent with the social and human rights models of disability embedded in the Convention on the Rights of Persons with Disabilities, which Canada ratified in 2010.
Third, the administration of the DTC program should be consistent with its governing legislation, the Income Tax Act, and current jurisprudence, i.e., Tax Court rulings. For example, there should be a common basis in relation to definitions and qualification requirements.
Fourth, the issuance of clarification letters, which is allowed under section 118.4(1) of the act, within the DTC program should be refined. As it stands, the authority is much too broad and arbitrary. Denials are based on the information provided in the clarification letter. This is sometimes used as a mechanism for the government to bypass the information in the T2201 certificate.
Fifth, in cases of DTC renewals, previously submitted DTC qualification medical information should be considered as relevant medical information with respect to the DTC renewal application. This would provide greater expediency with the process and greater accessibility to those entitled to the benefits of the DTC.
Finally, sixth, people with disabilities are subjected to numerous application processes for various federal, provincial and territorial government entitlements, benefits and programs. Although the various initiatives serve different purposes, application processes are all fairly similar. The federal government should work with the provinces and territories to harmonize the application process instead of requiring people to complete multiple processes in order to access these entitlements, benefits and programs administered by various levels of government.
I will change gears now and talk about the Registered Disability Savings Plan. Mr. Etmanski touched on some wonderful recommendations. I will focus my comments on two specific recommendations.
The RDSP turns 11 this year and is one of the most, if not the most, progressive savings plans in the world specifically designed to benefit people with disabilities. Unfortunately, the issues that have plagued the plan since its inception have not been effectively addressed.
First, this issue relates to legal capacity. Legislation in the Income Tax Act, which governs the RDSP, appears to disqualify some adult beneficiaries who are otherwise eligible to own RDSPs from doing so if they are not deemed to be “contractually competent.” For many people who would otherwise benefit from the plan, they cannot open an RDSP due to this restriction in relation to their legal capacity. For many family members, they are caught between their desire to assure the future financial security of their relative and the stigma and restriction of basic rights to liberty they know comes with formally placing their relative under a guardianship order.
This requirement does not reflect developments in the law and policy in Canada, in particular Canada’s ratification of the UN Convention on the Rights of Persons with Disabilities that recognizes the stigmatizing impact of formally labelling people as “incapable,” excluding them from employing whatever capabilities they have in relation to the decision-making process and officially designating other persons as substitute decision makers on their behalf. In many provincial and territorial jurisdictions, an individual would have to undergo a formal capacity assessment to be found incapable of managing property, give up all of their decision-making rights and be the subject of a guardianship order in order to benefit from an RDSP.
The primary implication of this gap in legislation means that a considerable proportion of the population for which the RDSP is meant to benefit is currently unable to access the plan. I will expand on that a little bit. Since the RDSP’s inception in 2008, individuals that face this barrier have lost out on over $40,000 of federal government contributions. For those who have since turned age 49, these contributions are permanently gone. For every December 31 that goes by, a cohort of eligible beneficiaries under the age of 49 forego up to $22,500 in federal contributions. Needless to say, this issue requires urgent and immediate resolution.
The federal government amended the Income Tax Act in 2012 by implementing a temporary measure allowing for parents, spouses and common-law partners to be plan holders for adult beneficiaries. They cited this issue as one within provincial jurisdiction and placed the onus on provinces and territories to amend their legislation by the end of 2016. A few years later, the federal government extended this to 2018, which perpetuated the issue for another couple of years.
We believe a national solution to this issue would be much more effective, rather than a patchwork of legislative schemes among the 13 different provincial and territorial jurisdictions. A consistent policy and legislative framework would ensure that eligible Canadians with disabilities are able to access the benefits of an RDSP regardless of their province or territory of residence.
In our respectful submission, the issue of legal representation and RDSPs can be dealt with by the federal government. The issue of the development of a uniform national remedy that involves the federal government’s direct action in dealing with these matters that are ordinarily with the jurisdiction of provinces and territories has been addressed and upheld in various Supreme Court of Canada decisions.
The second issue I’d like to comment on is very much related to what Mr. Etmanski spoke about, and that is accessing funds from the RDSP. The combination of personal contributions, federal contributions and tax-deferred growth over time will lead to people having access to a considerable amount of funds in their RDSPs once all money is invested.
The issue is that many people will not have the opportunity to access some or all of these funds due to the combined effect of what’s called the lifetime disability assistance payment, or LDAP, withdrawal formula and the repayment obligation associated with what’s referred to as the assistance holdback amount, the AHA. The legislation imposes a penalty on beneficiaries who withdraw funds within 10 years of receiving a government contribution. We call that the 10-year rule. The penalty is equal to the lesser of three times the amount of the withdrawal or the value of the AHA.
LDAPs are regularly scheduled period payments that may begin at any time but must begin by age 60. These payments are subject to a formula that uses an effective life expectancy of 83 for calculating payments. Based on the 10-year rule, most beneficiaries will not be able to access funds in their RDSPs without being subjected to a penalty until they are somewhere between the ages of 49 to 59.
Once able to withdraw funds, most plans will not permit payments in excess of the amounts determined by the formula I mentioned. This is problematic for several reasons. First, disability-related factors are not taken into account when contemplating payment amounts. We hear concerns that the life expectancy of beneficiaries may be much shorter than age 83, given the nature of the disability, and they therefore may not be allowed to benefit from the funds in their RDSPs. Further, if the beneficiary is deemed incapable of making a will, their assets may be distributed to unintended recipients of their estates upon passing away.
Second, 75 per cent of people with an intellectual disability are living in poverty, and 45 per cent of the homeless population is living with a disability. While we understand the value of tax-deferred growth and the accumulation of assets over one’s lifetime, the fact that there are billions of dollars sitting in people’s RDSPs while three quarters of this population is living below the poverty line appears to be counter-intuitive.
Our recommendation would be to review the 10-year rule and the LDAP withdrawal formula to balance the intent of encouraging tax-deferred growth over time with the dire financial needs of the disability community today.
We thank you for your time this evening and very much hope that the issues raised in our submission receive timely attention.
The Chair: Thank you. Our final presenter is from the Juvenile Diabetes Research Foundation, David Prowten, President and Chief Executive Officer.
David Prowten, President and Chief Executive Officer, Juvenile Diabetes Research Foundation: Thank you, Mr. Chair and honourable senators of the committee, for the opportunity to contribute to your deliberations on the Disability Tax Credit and the Registered Disability Savings Plan.
JDRF, as background, is a world-leading charity focused on research aimed at curing, preventing and treating type-1 diabetes, T1D. Just as background, type 1 diabetes is a chronic, potentially fatal autoimmune disease that impacts your life 24 hours a day, seven days a week, 365 days a year, because you are no longer able to produce insulin. From the moment of diagnosis, you are dependent on infusions of insulin to survive.
Everyone with type 1 diabetes must carefully balance insulin with their food and daily activity to maintain their blood sugar within a target range. Failure to do so can lead to hypoglycaemia or hyperglycemia, both of which are dangerous and even life-threatening. Over many years, poor blood-sugar control can lead to devastating complications, which are horrible for patients and also a very high cost to the health care system in Canada.
For about a dozen years, Canadians with type 1 had qualified for the Disability Tax Credit under the category of life-sustaining therapy when suddenly this past May it became virtually impossible for adults with diabetes to qualify. Even claimants with conditions such as hypoglycaemia unawareness, brittle diabetes and other chronic conditions were being denied. This resulted from an internal change made by the Canada Revenue Agency in May directing reviewers to deny adults receiving insulin therapy the DTC unless they had one or more chronic conditions. This was a significant concern for us and resulted in a major advocacy effort by JDRF, Diabetes Canada and the entire type 1 diabetes community in the fall.
It should be noted that the existence of another chronic condition on top of type 1 diabetes was never a requirement of the Income Tax Act and, until the end of April, it was always the case that Canadians with T1D would be approved for the DTC if a medical practitioner certified they spend 14 hours a week engaged in activities prescribed by the act.
From our conversations over the summer and fall with the CRA, the minister and her staff, this change seems to have stemmed from an erroneous belief that insulin therapy no longer takes 14 hours a week due to improvements in technology such as insulin pumps and continuous glucose monitors. This is a flawed assumption, and it essentially put the CRA in a position of overruling the certifications of claimants’ medical practitioners.
It is worth noting that no formal consultation of any kind took place prior this change.
We were relieved by the minister’s December announcement that the CRA would be reversing course and reviewing all diabetes claims denied since May of last year. We are committed to working with the government and the newly created Disability Advisory Committee to ensure the needs of Canadians living with type 1 are appropriately recognized and supported as this committee begins its journey.
Over the past 10 or so months, we heard from countless patients across Canada about difficulties they encountered in applying for the DTC. Some of these complaints concern long-standing obstacles. Many tell us that the process and forms are overly complicated and that the eligibility criteria are confusing and arbitrary, particularly the 14-hours-a-week rule. They are frustrated to learn certain activities are excluded, such as time spent calculating carbohydrates or recovering from low blood-sugar events.
If it weren’t troubling enough to see vulnerable Canadians being denied some modest tax relief, which in most cases is worth about $1,500 annually, those who had invested in RDSPs were informed they would have to close their accounts with all government contributions, in some cases worth up to three quarters of the value, being clawed back.
Now that people with type 1 are being once again being approved for the DTC, their RDSP savings should be safe, but there are still some concerns. For example, there are a certain number of patients who qualify for the DTC because they are allowed to include in their 14 hours a week the time they and their child spend engaged in eligible activities. It is unfair that a family that has invested in good faith in an RDSP should lose the benefit due to a change in their now-adult child’s Disability Tax Credit status. The disease does not get easier to manage on your eighteenth birthday, we can assure you of that.
Many Canadians with disabilities have tens of thousands of dollars invested in these accounts. In the case of the T1D, this is money that will likely be needed to mitigate the costs of debilitating complications, such as blindness or the loss of a limb, that are too sadly often the reality of diabetes in later life. Given the rising cost of this disease, every Canadian with type 1 diabetes should qualify for this vital relief, and any action to limit access to the DTC or RDSP will only result in greater inequality for these Canadians.
As such, we are making three recommendations today.
To begin, we’d like to propose that the Income Tax Act be amended to clear up contradictory language that has resulted in the CRA’s determination that the time spent calculating carbohydrates consumed may not be included when calculating whether 14 hours a week is needed to manage insulin therapy. To be clear, it is impossible to calculate an appropriate dosage of insulin without factoring in your carbohydrates. This is not like taking antibiotics when you’re asked to take three pills a day. Each and every dose needs to be customized, and a person has to do that themselves. They have to determine their carb intake as part of getting it right. To suggest otherwise displays a fundamental misunderstanding of the disease.
We further recommend amending the act to reduce the threshold from 14 hours to 10. This should allow a greater number of Canadians who require life-sustaining therapy to qualify for the DTC and the RDSP. This recognizes that the 14-hour rule was arbitrary to begin with and that persons with the same disability share similar health burdens and financial challenges regardless of the time required. It will also solve the problem described earlier where a young adult may cease to qualify for the DTC and RDSP when they turn 18 simply because mom and dad’s time is no longer included.
Our final recommendation is that, except in cases where a claimant has acted fraudulently, no Canadian should lose their RDSP due to changes in their DTC status, which is a huge concern coming out of what happened last fall. We believe RDSP savings should be protected.
In closing, I want to extend our thanks to the honourable senators for inviting us to testify today and allowing us to submit some recommendations for your consideration.
The Chair: Thank you very much. Now we will engage in a dialogue of questions and answers with the members of the committee.
Committee members, as I pointed out, that’s a mistake where you see 5:15 as the end of this. We can go to six o’clock. On that basis, we will go back to our normal procedure of five minutes each. Obviously, the more concise the question and the more concise the answer, the more questions you can get in within five minutes. Let me start with the deputy chair of the committee.
[Translation]
Senator Petitclerc: I would like to thank each of you for your presentation. I will ask my questions in French but, of course, I invite you to answer in the language of your choice.
I think we’ll be asking a lot of questions because this is very complex and many things are concerning to us. I am a paraplegic person who uses a wheelchair, and I think there is something in your remarks that jumps out and seems to have become a major problem. It is the fact that the age of 83 is being used to calculate payments.
In my opinion, those who use this figure of 83 years are not really familiar with the disability community.
[English]
Mr. Prowten, you said that the 14-hour rule was arbitrary to begin with.
[Translation]
My question is as follows, and Mr. Prowten can answer it first, but I would like to hear from all of you on this. Clearly, people with disabilities and the organizations that represent them were not adequately consulted at the outset. At the very least, is the situation improving? Are they being consulted? Are these people part of the solution when all the problems are exposed?
[English]
The Chair: We’ll start with Mr. Prowten, and then I will ask the two on the video conference if they have further comments.
Mr. Prowten: I think the Disability Advisory Committee is an attempt to engage groups, and I think that is terrific, but I would agree with you completely that it’s very difficult to say there’s a set of criteria that can be consistently applied for so many different conditions that Canadians live with. I think it’s a difficult situation to wrestle to the ground and very complicated, as you said.
I think there is a bit of lack of understanding about what we went through in the fall. The assumption is technology will make life easier. What we learned from our constituents is that we actually get more data now. A continuous glucose monitor gives a blood reading every five minutes, so you’re involved in your disease all the time. You have better information, but it doesn’t make it less burdensome. As things change, we will have to continue to be consulted going forward.
Mr. Etmanski: I think the inauguration of the RDSP was one of the most marvellous examples of government cooperating with business, particularly financial institutions, certainly, that I have ever seen. In 18 months, a whole new system was established, not only at the federal level among three different departments but also in every provincial and territorial government where they had to change the welfare rules and the banks and credit unions had to overhaul their systems to respond to something that still doesn’t exist anywhere else in the world. We had, I think, very good co-operation.
There are two things missing. One is there was not the ongoing presence of people with disabilities, their supporters and advocates, et cetera, to make the necessary adjustments in something this new. I mean, it stands to reason that technology changes and evolves, and so does our understanding of the RDSP, so that’s a big gap. It was not there, and I’m not convinced that bringing together an advisory committee on the Disability Tax Credit will address that question, which is why I made the other recommendation that I did.
I’ll stop there. I think there is a mindset at CRA that we want to, as citizens, go after cheaters and fraudsters, but that mindset should not be applied to people with disabilities. So you have this continuing rolling back of the possibilities of the RDSP, which was its original promise, so that’s the second big challenge for me.
The Chair: There are a few islands where they can go after people for taxes.
Mr. Pooran: I don’t have much more to add. Those were some great responses by Mr. Prowten and Mr. Etmanski. I would say the only other piece is there is a built-in three-year review of RDSPs into the legislation, where the government welcomes feedback.
That being said, while we saw some significant enhancements, I think, with the RDSP between 2008 and 2012, nothing much has seemed to progress since then, even though these issues continue to exist. We hope to see some of that momentum lead to some of the recommendations that we are all making here today.
Senator Petitclerc: This can be a yes or no question. In the future, if we go for recommendations, would you advise that the community of persons with disabilities be more involved and part of the process to make it better?
Mr. Etmanski: The answer is yes. I personally don’t think it should be even construed as an advisory committee to CRA or the Ministry of Finance. I think it’s the wrong place for them. The locus of control should be removed from that. I think it should be an action group similar to what the B.C. government has established.
The Chair: Where would you have that committee report to?
Mr. Etmanski: To ESDC.
The Chair: Thank you. Any other comments? That takes care of that.
Senator Seidman: Thank you all very much for your presentations. I think what we probably learned today listening to the presentations is that we must consider two aspects to this review that we’re doing to what we have discovered is a pretty serious problem with the RDSP and the DTC.
The first is short-item remediation of errors for people who are currently encountering serious problems and will continue to do so as long as this program is administered the way it is. Second, I think it has been brought to our attention that there are longer-term changes to make to the program to make it more accessible and more transparent for those who really need it, and those can involve policy and administrative changes. I think that’s the message that I have taken from your presentations this afternoon, and I think it’s a very valuable one.
I would like to begin with a question about the short-term remediation, if I might, and then come back later to all three of you about the longer-term issues. Mr. Etmanski, regarding the short-term remediation, we have heard about the effect of the spike in recent DTC rejects on RDSP contributions. For people who have received the Disability Tax Credit for years and suddenly don’t qualify, I understand they lose access to the money in their RDSP, including their own personal contributions. CRA claims that people who have had their DTC revoked can keep their RDSP open for a maximum of five years in case they regain eligibility for the credit. I would like to try to understand what happens during that five-year window. Can disabled Canadians access their own money while the CRA is reviewing their eligibility? At the end of the five years, are they hit with a tax bill when their contributions are returned?
Mr. Etmanski: I’m afraid I can’t answer that. I’m not involved in the day-to-day. I think Mr. Pooran is probably better qualified.
Mr. Pooran: I believe that within that five-year period, the plan is essentially dormant. I can’t say with certainty, but I don’t think the funds are accessible. Once that five-year period has passed, though, any of the federal contributions received within 10 years would be returned to the government and then the remaining funds would be transferred back to the beneficiary themselves, but the proportion of those funds made up of personal contributions would not be considered taxable income. It would be the growth on those funds that the beneficiary would be taxed on.
Senator Seidman: That’s helpful.
Mr. Pooran: The other implication, though, where there’s still a bit of a grey area, is what impact would the return of those funds have on the beneficiary’s social assistance benefits. That impact may vary from province to province but, as far as I know, that hasn’t been tested as yet.
Senator Seidman: I have a different question for either of our witnesses from the Juvenile Diabetes Research Foundation, if I might. At our last meeting, we talked about the statistics released by the CRA to date with data on the number of people claiming the DTC, amounts claimed and the applications accepted and rejected. The issue was the CRA doesn’t provide any information about eligibility based on diagnosis. We heard from your colleagues at Diabetes Canada that they found the data that CRA has provided to date to be vague and obfuscating. Do you believe there’s a reason CRA couldn’t track accepted and rejected claims on the basis of diagnosis or the condition instead of frequently overlapping eligibility criteria? Would that make it easier to assess the effectiveness of the program?
Mr. Prowten: I fundamentally believe that is something that should be done because how else would we know the number of people by disease or category. I think you would want to have a matrix of criteria to track it by. I completely agree with you. We have not been able to get any more detailed information as well when we asked.
Senator Munson: I’m still thinking of the words last week during testimony of heartbroken families as we’re talking today still being rejected and that type of thing. I find it very troubling. I thought Mr. Etmanski summed it up perfectly: it was called trust at one time, trust in people who are applying and the government trusting us or you in this regard for this income.
I was interested in the guaranteed annual income you talked about and how this would work in the disability community. You had it as a recommendation. Can you be more specific how this would work and how this would help?
Mr. Etmanski: Thank you for your interest. My fundamental point is that the RDSP has clearly demonstrated that poverty is a profound issue, so of course we need to fix the RDSP, but that by itself is not going to eliminate poverty for persons with disabilities.
I think of what our federal government has done, which began as a provincial experiment in Ontario, with the guaranteed income supplement as a way of topping up the income that is available to seniors. Those adjustments continue to be made to the point where — and I know the gap is starting to change again — by and large, as a country, we have done a great job of reducing and coming close to eliminating the poverty of seniors. Recent efforts to reduce poverty among low-income families have been made by the federal government. I’m simply suggesting it’s time to look at that for people with disabilities.
As far as basic income, there are no greater proponents than your chair and former Senator Hugh Segal, who has made extensive recommendations in Ontario. What we’re looking at is removing income supports for people with disabilities from the welfare framework. It’s time for that. That’s what the RDSP is demonstrating.
In B.C., the government here has taken the precedent of no clawback, a higher asset limit and no reporting, and extended that throughout its disability welfare benefit system. So it has taken the precedent and is saying this is telling us something, so it is beginning to get rid of the chains that relate to the welfare mentality associated with people with disabilities. I see that mirrored now in CRA’s response.
The RDSP was a bold leap. We need to now leap over that and align ourselves with the efforts you’re making for the case for a basic income and the efforts that are surfacing across our country to look at basic income for people. I call it the guaranteed annual basic income for people with disabilities because I’m agnostic about the best way to do it. We need to have a serious discussion about poverty and people with disabilities. It is profound. If we take care of that, I suggest the disability will begin to take care of itself.
Senator Munson: My other question deals with the partnerships involved here, the partnerships with the financial institutions, the government itself and the people who are receiving the RDSP. It’s quite complex. People are saying that the institutions don’t have trained personnel to help people who just want to open one up, that it’s so complex. Sometimes governments like to put out great pieces of information about explaining. I don’t recall seeing much in the last while of the government explaining how this works. Call this number. You know how you see Canada, boom, boom, boom, and the government is here to help you and here’s what to do. I don’t see much from the CRA or anyone in government promoting these things and how you can work with financial institutions. Would anyone like to comment on that?
Mr. Etmanski: You have hit the nail on the head. We have multiple partners here. We have provincial governments, territorial governments and financial institutions, and they know where in their system there are roadblocks to the application. These surface at every meeting of the RDSP Action Group in British Columbia because those people are at the table and they are taking steps to do something about that at the provincial level. I could imagine this taking place nationally, involving doctors as well because they’re brought into the forum. That’s the kind of rallying that an action group can do, but it is not something that a conserving, cautious CRA has a mandate to do. I completely understand their mandate. I’m not faulting them. I think they’re doing their job. We need to release them, though, from doing the kind of work, Senator Munson, you’re suggesting and that I think needs to be done.
Banks and credit unions rose to the occasion 10 years ago in Canada to create the mechanisms for the RDSP. We need to think about how to improve that. Provinces and territories rose to the occasion as well. It’s time to rally them again.
The Chair: There are two points I wish to make before going to the next speaker. Remember that tomorrow we do have the Minister of Revenue here, who is responsible for the CRA. We do have ESDC, Social Development and Finance and well as CRA officials tomorrow. That will be an opportunity to question them on how the programs are operated by them.
Another thing I would like to say is that this committee, in 2009, when it dealt with a study on poverty, housing and homelessness called In from the Margins: A Call to Action on Poverty, Housing and Homelessnessdid recommend that the Disability Tax Credit be made refundable initially, but that ultimately there be a basic income program for people with disabilities. Indeed, we also recommended that it be looked at for everyone else, too, who are low income. That was endorsed by the Senate.
[Translation]
Senator Mégie: I will ask you a question in French, but you can answer in English, of course. Actually, I would like to make a comment.
Last week, with our other witnesses, I came back to the notion of eligibility criteria, given that different pathologies cause totally different problems.
For example, a person with diabetes does not have the same disabilities as a young person with autism, and this is something the advisory committee could look into. I also think that the advisory committee should consider the 14-hour rule. When a young person with diabetes uses a high-tech device, they may need only 10 hours, which makes them ineligible for the tax credit. It is not fair.
In addition, a person who moves more slowly, who has received the same diagnosis and experiences the same problems may need 14 hours. That person then benefits from the tax credit. Is it realistic to think that the advisory committee could look into this issue? That way, some people would be better off because they would have been made eligible for the tax credit.
[English]
Mr. Prowten: We recommended 10, but I will honestly say that is a bit arbitrary on our part because once you have type 1 diabetes, right now you have type 1 diabetes for the rest of your life. I think you’re onto an important point here. We heard the 14-hour criteria was put in place because that’s what it takes for kidney dialysis. It did not necessarily relate to type 1 diabetes. It feels like it’s arbitrary and perhaps based on one disease.
If you have the minister here tomorrow, she set up the committee, and if you could ask her about those sorts of things, that would be terrific, because we would agree that different conditions may require different criteria. I think Senator Petitclerc was asking a similar question.
Patrick Tohill, Director of Government Relations, Juvenile Diabetes Research Foundation: If I could add to that, I think it would be useful to understand what the terms of reference are for the Disability Advisory Committee. I haven’t seen them as yet, but I understand from the minister’s statements around the committee that they’re looking at it quite narrowly in terms of administration of the DTC. I wouldn’t expect that questions around revising the Income Tax Act would fall within their remit. That needs to be expanded, perhaps.
[Translation]
Senator Mégie: Not in order to change the legislation, but to help us work on the changes to make. Maybe what I’m proposing isn’t realistic.
[English]
Mr. Prowten: Maybe it’s back to the short and the long term. There are things we can try to do in the short term to ensure that these fixes are implemented well and are fair and consistent for people. One thing we’re seeing is that there is a lack of consistency in the system. And longer term, maybe we need to move to some legislative changes.
Mr. Etmanski: Given the importance of co-operation at the provincial and territorial level, I wonder what you think about enrolling people with disabilities, who already qualify to receive disability benefits or welfare, however you want to describe it, at the provincial and territorial level already?
Surely there are far more people with disabilities who are receiving disability benefits than are eligible, according to existing criteria, for the Disability Tax Credit and therefore for the RDSP. That’s why I recommended that we automatically enrol people in the RDSP who are automatically receiving disability benefits from the welfare systems of our province and territories. Surely no one would accuse them of being liberal and excessive in their welcoming of people. If people have already passed those stringent requirements, surely that should be a consideration as we are beginning to sort out some these complications.
The Chair: Mr. Pooran, do you have any comment?
Mr. Pooran: I have nothing further to add. Thank you.
Senator Omidvar: Thank you very much for being here.
I want to go back to the observations by this panel and other panels on the poverty levels in the disability community.
It seems to me from everything that we’ve heard — and I’m certainly not an expert on this issue — that the Disability Tax Credit is the gateway, a portal that enables you to gain other benefits or enrol for the RDSP. In truth, it’s a refundable tax credit, which means you have to have a certain amount of income before you can claim it.
I wonder whether you would all agree — I would like to hear from you so we get it on the record — that in fact the Disability Tax Credit should be refundable. It should function very much like the Canada Child Benefit. It’s a function of filing your income tax and, if you are under a certain level and you have children, you get $540 a month in your account. In the same way, if someone who is disabled files a tax return and their income is below a certain level, under the current system, it doesn’t trigger automatic qualification for the Disability Tax Credit, but it could be changed so you get money put every month into someone’s pocket. Is that, first of all, something you would support?
Second, Mr. Etmanski, would that be better, strategically, than a basic minimum income for people with disabilities, given the complexity in both these areas? I would like to get an opinion from both of you.
The Chair: Who do you want to start with?
Senator Omidvar: They are all wise people.
Mr. Etmanski: Start with people furthest away. First of all, I would agree with a refundable Disability Tax Credit. If you were to look at the original report commissioned by Finance Minister Jim Flaherty, which led to the RDSP, it was a clarion call to address poverty and people with disabilities, and it assumed that the RDSP was just the beginning and had a number of other proposals in there, including this. So I think that’s well worth a serious consideration.
My general point would be that as we see, for example, in Quebec, the launch of a guaranteed minimum income for people, most of whom as I understand it will be people with disabilities, and as we begin to see the experiment in Ontario with basic income, we want to fix the RDSP and we’re looking at a refundable Disability Tax Credit, I think it’s now time to look at the issue at a national level and declare what it is that we need to do to supplement disability welfare, remove the welfare, soul-destroying aspects and look at something that is guaranteed over time.
How that fits in, I don’t know. I’m not wise enough. There are smart people who can do that. We just need to put it all on the table and address it.
Mr. Prowten: I think it’s a terrific idea. We were shocked as we went through the fall because we heard about people having to choose between insulin or food and rent. When you hear about people having to make those choices, that’s not right. It’s an issue and it would be terrific to have something like that in place.
Mr. Pooran: I have two quick comments. First, we would absolutely welcome a refundable Disability Tax Credit, but my only concern is that that may add an additional level of scrutiny in terms of adjudicating the applications on the part of CRA, so we would want to ensure that that didn’t happen.
Second, as was mentioned earlier, the DTC equates to about $1,500 a year, which would go a long way for a lot of people. However, I think the true opportunity here is to talk about assessing how we can allow people to access funds in their RDSPs sooner rather than later. For people who opened the RDSP in 2008 and were eligible to receive the grants and the bonds and made minimum contributions, you have people with $70,000 or $80,000 in their RDSPs right now who are locked in potentially for another 20 years. I see that as being the key to potentially addressing a lot of these issues related to poverty.
Senator Omidvar: I’m stuck on this DTC thing as the Holy Grail that opens everything up.
We heard last week, I don’t know from which panel, about the appeals process. When you’re denied the Disability Tax Credit, there’s an appeals process, but it’s been made more complex because medical panels are not now involved in the appeals process. In fact, applicants often end up paying middle people, middle men — I don’t mean that in a gendered way — to file the appeal for them, and they give them 30 per cent, or something, of the take.
This is really for Mr. Prowten and Mr. Tohill. Do you think that we should mandate medical panels as part of the appeals process so individuals don’t have to go shopping around for their own testimonials and certificates, which doctors apparently are increasingly unwilling to provide?
Mr. Prowten: I think that’s a great outcome, but it’s the front end of the process that’s broken. If you could simplify that and accept the medical practitioner’s certification, that would eliminate a lot of the appeals challenge. If you’re questioning a medical practitioner’s certification, that says there’s something wrong if an agent is challenging that. You could eliminate a lot of the appeals challenges with a better upfront review process. Maybe you need more medical people in that part of it who really understand these conditions.
Mr. Etmanski: I think it’s relevant for some people to have a medical practitioner explain the diagnosis but, for a large number of people with disabilities, first, they would resist a medical interpretation of their condition. There are other ways to look at disability than just through the lens of medicine.
Again, there are a number of very well-qualified people who can assist with that. There are people all over Canada — one of the world’s best lives in Quebec, Dr. Gilles Julien, who understand the social determinants that handicap people. This work is precedent setting and could be applied just as effectively for people with disabilities as a medical practitioner’s advice.
Mr. Pooran: I echo Mr. Etmanski’s comments. We have to be careful about re-enforcing the medical model of disabilities. Perhaps extending the group of qualified practitioners to include more people who are not necessarily tied to the medical system would be beneficial.
Senator Bernard: My questions are going to shift the conversation a bit, I think.
First, we know that for parents raising children with disabilities, it’s very expensive, and often parents are trying to cope with the challenges they’re experiencing with not enough support. There are not enough supports for parents with children with any kind of disabilities.
As I’ve been talking to people in my province, my community, about these issues, I’m being told two basic things. First, there’s a general lack of awareness of the Disability Tax Credit. People just don’t know about it. Therefore, they’re not applying, which automatically excludes them from the RDSP. People that I’ve talked to that are aware find the application process daunting, and often it’s because they have so many other things that they’re coping with and that’s one more thing they have to sort of think about.
Since we’re looking at these issues, what recommendations would you have in terms of creating more awareness, streamlining application processes and getting to those people who need this the most, who are more likely to be excluded or exclude themselves?
Mr. Prowten: That’s a terrific set of questions.
We talked earlier about a 1-800 number. Maybe we need to do that for the Disability Tax Credit. Maybe that’s something we could do to promote that as something people can access.
During all the activity in the fall, we talked about how this may be one of the best things we could do to create awareness that the Disability Tax Credit is available for people with type 1 diabetes, because it is hard to raise awareness.
You have to create a bridge between the patients and their families and medical practitioners, but there must be hope that for the time invested in the process, there will be a positive benefit for the patient. We need to work on a simpler process so that if the medical practitioner is involved, they feel it’s worthwhile and simple, because they’re not being reimbursed through the medical system it.
Mr. Tohill: It’s interesting that the original impetus for the Disability Tax Credit was to provide a measure of tax relief for people who, because of their disability or disease, have expenses well above and beyond what the average Canadian would have. Why, then, are we establishing such rigorous criteria for qualification that the claimants can’t make sense of it, the doctors often can’t make sense of it and the CRA reviewers often can’t make sense of it?Why do we have to engage in this suffering Olympics of trying to decide how disabled is disabled enough?
Mr. Etmanski: Senator Bernard, you were speaking to my heart when you talked about the experiences you have had with families, with parents. I’m going to make a wild guess here that those parents are likely all moms.
In terms of promotion or publicity or marketing — however you want to describe it — the disability world today is, to a large extent, online. The number of moms who write blogs and have an active following online is phenomenal. They don’t necessarily join traditional organizations. I would suggest a serious look at something like an online campaign. This is the 21st century; networks are in the Zeitgeist. These networks are what I would recommend we think about tapping into it promote it within the family movement.
Second, the number of celebrities who have a connection to the world of disability is phenomenal. Again, this is the 21st century. This is how we reach out and include people and welcome them in.
Mr. Pooran: There was a suggestion made earlier that there are many more people on provincial social assistance benefits than people who currently benefit from the DTC. We recommended over the years that mail-outs be sent out, with cheque stubs and direct deposit slips attached, to recipients of social assistance benefits to inform them about the DTC. Anecdotally, among people with intellectual disabilities, the DTC is fairly well known. It’s taking that next step and actually opening up an RDSP and really getting educated about it.
Senator Bernard: Thinking about your responses, a couple of things come to mind. One, the people who are not on income assistance but are working poor, or people even with a decent income but the astronomical costs of dealing with a disability puts them outside the market to be able to contribute to an RDSP, they are just making it, how do they contribute to an RDSP?
Mr. Etmanski: Senator, this is the limitation of the RDSP. There are things that can be done. For example, the Vancouver Foundation has a $4 million fund that they are using to start RDSPs for people in circumstances like you’ve described. But that by itself is not enough. This points to the limitation and why I think we need to fix and promote the RDSP. We must make sure we improve eligibility, et cetera, but then at the same time have the more serious conversation about poverty and people with disabilities, and often the poverty that their families have as well, which I think is the point you’re making, which I accept.
Senator Raine: We’re dealing with two issues here. One is how people are determined to qualify for this kind of assistance. The province and territories, who obviously have programs in place for supports, make a lot more sense than CRA being the gatekeeper to these programs. Am I right there?
The Chair: That is what Mr. Etmanski was saying.
Senator Raine: There are two parts to the Registered Disability Savings Plan savings program, one being the Canada Disability Savings Grant, which is a straight government grant, I believe, from the federal government. Then there is the Canada Disability Savings Bond, and that’s a bond a person purchases through the financial institutions from their own source of income or savings or through a program like the Vancouver Foundation would have. Am I correct on that? There are two parts. One is a grant and one is your part of the savings. Lumped together, they become a source of funds in your name, but there are restrictions on when you can use it. That’s where it seems to be problematic, that you have to wait 10 years, when maybe that doesn’t make sense. Am I understanding this properly or is there something else I am missing here?
Mr. Pooran: There are a couple of different components that go into the plan. There are personal contributions that you will make out of personal money. There are federal contributions, and that’s where we have the grants and the bonds. The grant is based on the amount of personal contributions that someone makes. The bond is a financial contribution that the government makes solely based on the beneficiary’s family income, so personal contributions aren’t factored in. Then there’s growth, so all that money can grow.
With respect to the 10-year rule, for most people, they actually have to wait a lot longer than 10 years, in most cases up to 30 years, because the rule states that penalties will be applied if withdrawals are made within 10 years of a government contribution. So in other words, it may take me 20 years to maximize my government contributions, and from that point onward, I have to wait an additional 10 years. So in a lot of cases, we’re actually looking at 30 years before people can start to access their funds.
Mr. Tohill: One point which was made is it sounds like a great idea to be looking at who is on the provincial rolls, except for the category of life-sustaining therapy, which type 1 diabetes and cystic fibrosis and others that you have heard from fall under. We would want to ensure that it is still maintained as part of the DTC. The qualifier there should be if you’re receiving life-sustaining therapy though, then you are automatically qualified. We should simplify that process.
Senator Raine: I understand that. I’m glad I asked that question. There’s a federal grant and a federal bond, but the bond is based on family income. There are two parts to the federal contribution, a grant and a bond. The grant is matching with your self-contribution, and then the bond is based on your family income.
The Chair: That is for low-income people. We can clarify all that tomorrow with the minister. That’s certainly my understanding of it, although the panels are here to do the answering.
Senator Raine: I agree that when you have the family putting money in, the limitations on how you can take it out should be basically left up to the needs as determined by the family, not by the government. Why would they force you to keep it in longer than when you need it?
Mr. Tohill: If I could offer a quick illustration of that, I was speaking to a young woman from Manitoba recently who is in her 20s. She is advocating in that province to extend the province’s coverage for insulin pumps, and she was explaining that if it comes down to will she pay her rent or groceries or put aside like $50 every paycheque so she can afford her next insulin pump which the government will not cover, she will go for the groceries and rent. If her parents had invested in an RDSP, it would be useful for her to have the option of withdrawing some of that money so she could buy her next insulin pump, but right now that’s not really an option.
Senator Seidman: Mr. Pooran, just a couple of weeks ago the CRA released data called an at-a-glance chart. I don’t know if you have seen it, Disability Tax Credit at a glance, with statistics from 2011 to 2017.
It’s basic activities of daily living, the category for how people qualify for the disability tax, and they show new applications processed and accepted and new applications processed and accepted and new applications processed and rejected. So you understand that the data is classified according to activities of daily living to try to give some indication of how the process is working.
If I look at 2011 through 2017 and look specifically at mental functions, which is the basic activity of daily living, there is vision, walking, speaking, hearing, feeding, dressing, eliminating, life-sustaining therapy and mental functions. These are the categories here. Under mental functions, essentially, over time, for each year until 2016-17, their proportion of new applications processed and rejected is pretty stable — 7, 7.5 per cent. In 2016-17, that increased to 10.5per cent rejections. This is specifically now for mental functions.
We’re getting into a medical model here, which I think you don’t really appreciate very much, but I’d like to know if you’re aware of some kind of administrative directive that has been used to tighten eligibility in this particular category as there was, for example, in the diabetes group, where diabetics’ claims were denied because of that directive that went out regarding the 14 hours a week. I’m just trying to understand what could account for this increase and if it’s a problem from your perspective. I direct that to Mr. Pooran.
Mr. Pooran: I think it is a problem. I’m not personally aware of any directive that was circulated, and I can only sort of speculate in terms of what has caused that increase in the rejection rate. There have been changes to the T2201 over the years, and it could be that those changes have led to additional clarification letters being sent out by CRA to medical practitioners. Often, I hear that those additional questionnaires are not necessarily in some cases completed. In some cases, they are too overwhelming. I just saw one the other day that was 12 pages in length. In some cases, they just may not be answered to CRA’s satisfaction. I can only speculate, but we are seeing a significant increase in the number of clarification letters that are being sent out.
Senator Seidman: Is there some way that you see the CRA addressing this?
Mr. Pooran: I don’t know that I’ve got a clear recommendation, by any means. I think there are a myriad of issues here. I think there is additional education that needs to be provided to the people completing these forms. I think CRA needs to think through whether or not it makes sense to have an application and a process for issuing these clarification letters. I think when we talk about people with lifelong disabilities, CRA really needs to consider why they’re asking people to requalify. I think there are a lot of people who don’t necessarily realize that their DTCs are lapsing and who are missing out on the opportunity to requalify or may not know what’s actually required to requalify because they’ve been receiving this for years. Nothing has really changed in their lives and, all of a sudden, they’re being rejected.
[Translation]
Senator Mégie: I would like some clarification. If I understood correctly, I heard Mr. Etmanski say earlier that it is better to use the medical diagnosis when making an application. Have I understood correctly?
[English]
Mr. Etmanski: Thank you for asking a question of clarification. I should apologize, first of all, for not being able to speak French. It is to my eternal embarrassment that I live in this country and I am not able to speak French well.
No, I think I was reacting to the fact that we exclusively use medical diagnosis as the basis of qualification for the Disability Tax Credit. I was trying to suggest that there are many, many other ways of looking at disabilities other than through a medical lens. In fact, the majority of people with disabilities that I know would chafe at, would resist, a doctor interpreting their disability. I suggested that there are environmental, social determinants, and I was simply pointing to a different kind of doctor, the inventor of social paediatrics in Montreal, Dr. Gilles Julien, as an example of somebody who understands that handicaps, indeed disabilities and disadvantages, occur beyond simply the medical diagnosis. So I hope that’s useful by way of clarification.
[Translation]
Senator Mégie: My comment on this will be the following. Specifically, it is not only the medical diagnosis that counts. We have to talk about other factors. Often, when a medical diagnosis and a disability are mentioned, the doctor receives another letter asking for clarification of the data. Sometimes two letters are sent for the doctor to answer; normally, we do it because if we don’t, the patient will be penalized.
I wanted to hear you say that you agree that it’s not just about the medical diagnosis. Thank you.
[English]
Senator Omidvar: I have a question. I think it’s for Mr. Pooran, but anyone else can help me out here. I’m going to stick with the working poor who are disabled and their limited access to relief. I want to ask you what deductions are currently available to them as they file their income tax reports, and are there any policy proposals to expand that deduction regime for people who are disabled?
Mr. Pooran: I don’t know if there are any proposals to expand that regime. I know that there is a working income tax benefit. There’s obviously the disability amount that’s accessible through the Disability Tax Credit. There are earning exemptions embedded within provincial social assistance programs that help a little bit. But, to my knowledge, the system as is just doesn’t meet the needs of, as you stated, the working poor.
But I’d suggest that there are, especially in our community, the community that CACL represents, people with intellectual disabilities, many people who aren’t working, who don’t have employment income or access to any kind of refundable tax credit through our income tax system. So I see that as a significant issue as well.
The Chair: Does anybody else want to respond to this? Okay, that’s the response.
Senator Omidvar: I know we’re focusing on the Disability Tax Credit and the RDSP, but if there are policy proposals or ideas, please send them our way, to the committee, and then we can take a look at them.
Senator Peticlerc: There are two things I’m interested in knowing.
I think I have the answer for the first one, but I would like to hear it. I come from a personal experience of being in a wheelchair and knowing many people who, like me, have had an accident and have become paraplegic. It seems from everything we have heard from personal experience and talking to them that, while studying this bill, it seems like when it is a lifelong physical disability, things are much easier when it comes to the DTC and forms, renewal and being accepted. Is the problem that maybe the system was good at the beginning, when it was made, but that it has not evolved with the complexity of persons with disabilities and they have not caught up with those complexities? Is that part of the problem?
Mr. Prowten: I think it probably is. The example that we saw last fall was that the assumption is technology makes life easier, and that’s not always going to be the case. It might make it smarter, but it may not make it easier. Mental health is a great example of how the world has started to talk about this and how there is probably greater understanding, but there is a long way to go. So when the DTC was set up, I don’t know enough about the history, but you can look at helping more Canadians by having a wholesome look at that right now.
Mr. Etmanski: I think the senator is exactly right. We began with a new instrument. There are those who had a clearly defined disability, like my daughter, for example. I don’t like to talk about her this way because she is an artist and a poet, but she has Down syndrome, so it was relatively straightforward.
But when the only relief beyond welfare to enable people to do something about the extraordinary costs and expenses is the RDSP/Disability Tax Credit, it makes perfect sense that it would become attractive to so many more people. It was certainly envisaged that way, but the initial apparatus didn’t accommodate it. The vision was there but the accommodation wasn’t, so that needs to change. Our iPhone is improved now. We need to improve it, so you’re exactly right.
Senator Munson: This is fascinating and interesting, and I’m looking forward to meeting the minister tomorrow. In that regard, Mr. Prowten, do you have statistics for us right now, in real time, of those with diabetes who are still being thwarted and rejected? Do you have numbers for us that you could tell us to explain that there are people here today who are still not getting satisfaction, so to speak, from the CRA?
Mr. Prowten: I’ll try. The good news is that since the change was made in December, we are hearing that the majority of people are getting through the system. That’s positive. They’ve gone backwards, and I think we’ve corrected a problem.
What’s hard for us to understand is actually whether, as Patrick mentioned, the Disability Advisory Committee’s terms of reference will actually provide a permanent solution to this or we will be at the risk of another bureaucratic change. That’s hard for us to know at this point.
Senator Munson: We’ll try to find out tomorrow.
Mr. Prowten: We’d appreciate that.
Mr. Tohill: To go back to the question that Senator Petitclerc posed a few minutes ago, I think there is some internal tension between more people wanting to access the DTC and the RDSP and the CRA’s desire to limit the number of claimants who are approved each year. You continuously have people appealing to the tax courts and the tax courts expanding the definition of who qualifies. Therefore, it should expand the number of people who qualified, but then the CRA tries to find different and more creative ways to still limit the number of people who qualify and therefore limit the expense. I think there is that tension there.
Senator Raine: I think the intent and the vision are very good. If you could wave a magic wand and have the perfect system for an application process or access to the program, what would the ideal program be? We have heard the application is too complicated, et cetera, and it’s going to the wrong place. Where should it go and how should it be done?
The Chair: You want them to answer that very quickly? Does anyone want to add to that?
Mr. Pooran: I don’t have the answer per se, but the one thing I would encourage is that all of these various benefits and entitlements to programs, deductions and credits be harmonized so that there is collaboration between the federal, provincial and territorial governments to try to streamline the application processes for people with disabilities.
Mr. Etmanski: Senator Raine, I would leave you with this thought: At the provincial and territorial level, people with autism — or as many like to be called, neuro diversity — people with moderate or minimal intellectual disability and people with brain injury, mental illness and type 1 diabetes are all eligible in receiving disability or welfare benefits, however you want to describe it, and it’s described differently from province to province and territory. All those people are already receiving. They have already been adjudicated as having a disability. If I were to wave a magic wand, why don’t we just make them eligible for the Disability Tax Credit and the Registered Disability Savings Plan? Provinces and territories have already done the work, so that would stand in addition to the eligibility improvements we want to make to that other instrument, the Disability Tax Credit.
The Chair: I want to follow up for a minute on that point, Mr. Etmanski. You’ve clearly said that it should be more than just the DTC as a gateway. You talked about the provincial disability programs and the work and the information they already have. We heard from the multiple sclerosis organization about episodic cases where people are on and off of the DTC. Would that solve that problem, or do we need some other corrective measure in terms of episodic issues?
Mr. Etmanski: Well, I would hesitate to speak on that. It would solve it in as much as many of those individuals are already eligible for the disability benefits that are available provincially and territorially.
I might also add something with regard to this kind of episodic disability or one whose symptoms are not apparent and then appear and the money is needed sooner rather than later. I don’t want to be telling an old tale, but I can remember receiving a phone call from the late Finance Minister Flaherty, who had been petitioned by people from the multiple sclerosis community who said that when they need their RDSP funds, they need them right away. They can’t wait 10 years. Sometimes the severity of the symptoms doesn’t manifest for a long time, but when they do, they need them. He said, “What about making the program flexible so people can access them sooner rather than later?” That was the spirit he took into it, and it was an all-party, nonpartisan spirit that created this. I would like to see that spirit and the suggestion of your question be what you as senators can do to bring this program back in line with what it was originally envisaged to do.
Mr. Prowten: In most tax credits, you self-certify when you’re doing your application process. In this case, most people aren’t going to make up a disease that they do or don’t have. If you could self-certify and have that in the process, that would be great. If you can’t, it would be accepting a medical practitioner’s word because they’re experts in the field. It could be a broad range; it may not just be medical. That would be a big step forward.
Senator Omidvar: My question is for Mr. Pooran around the current CRA guidelines that say that impairment due to mental illness should be present continuously for 90 per cent of the time for individuals to qualify for the Disability Tax Credit. How would you change this guideline? Or would you change it?
Mr. Pooran: It’s another one of these arbitrary thresholds that were introduced by CRA, and I’m not sure on what basis that was introduced. That threshold is definitely not in the Income Tax Act, and I can’t speak to whether or not I’ve seen it in any jurisprudence. I can’t really answer the question in terms of whether or not I would raise or lower the threshold.
But to reiterate one of my earlier points, the adjudication process has to be consistent with the legislation and with the jurisprudence. When we introduce these arbitrary thresholds, it’s problematic for the people who are applying for the benefits.
The Chair: All right. All four of you have been very helpful. You’re helping us get ready for our big meeting with the officials and the minister tomorrow morning, and you’ve added to our body of information that I hope will help result in some improvements for people who apply for DTC and RDSP. Thank you very much for your input.
Members of the committee, I want to point out that I had sent a letter to the minister asking for certain data from the CRA, largely what Senator Seidman had sent an email to the steering committee about. We got a response. It’s not everything, but it’s quite substantial, even small charts. You have to read those carefully.
We got some written submissions. I think Shaila sent them around. I want to draw your attention to one from Josée Marin. She’s one of the Nortel people who got left out in the cold, and her experience with DTC and RDSP is different from others as well. Please take a look at it.
Tomorrow we will hear from the minister and question officials from other departments as well as their own. For the last half hour, we will have a conversation amongst ourselves about giving all we want to Elizabeth to take away and draft our report.
(The committee adjourned.)