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Disability Tax Credit Regulations Fall Short

The decision to delay the regulations on the amount third parties can charge to apply for the disability tax credit has personally cost Canadians living with disabilities thousands of dollars.

The recent publishing of a cap on fees does not return any of the millions of dollars lost to promoters of the tax credit who charged huge fees to fill out a form my office fills out at no charge.

Some 1.3 million Canadians qualify for the credits worth $1.4 billion a year. About five percent of new applicants, some 12,000 people a year, hire consultants to navigate the claims process at contingency fees worth $9.5 million-$25.4 million a year, according to the Canada Revenue Agency.

I first put forward legislation, Bill C-462, The Disability Tax Credit Promoters Restrictions Act back in 2012. It was passed unanimously by all parties and received Royal Assent on May 29th, 2014. Then the election was called. The Liberal party has been stalling on bringing this legislation into force until now.

Legislation to curb these fees can be traced back to a 2012 private member’s bill I introduced.

I first became aware of this issue when one Disability Tax Credit consulting firm began targeting soldiers in our riding, encouraging them to apply based on post-traumatic stress disorder and charging fees contingent on a percentage of the government money collected.

There is no limit whatsoever on the fee they charged. My goal in introducing the bill was so that the people who the tax credit is intended for can reap most of the benefits.

Consultants charge up to a 40-per-cent fee to help people collect their Disability Tax Credits. Some consultants even require their clients to sign over a percentage of future years’ Disability Tax Credits. These fees can add up, especially when multiple years are involved.

Forty per cent is an incredible amount of money for families with children with disabilities or adults who have intellectual disabilities.

For me this is an ethical and moral issue.

Those regulations were finally published in the Canada Gazette on April 14, 2021.

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