Thank you for inviting me to speak to you today. I live in Kelowna, British Columbia. I am a disabled woman and co-chair of Disability Without Poverty, a national grassroots movement with the goal of eradicating disability poverty. I would like to focus on one small section of the massive bill you have before you found in Part 1(e) of the summary, expanding eligibility to the disability tax credit, known as the DTC.
Under this section of the bill, eligibility is expanded in areas of mental functioning and life-sustaining therapies. It is thought that this will expand eligibility to 40,000 disabled people. We firmly support these expansions. However, in many ways, it’s fiddling around the edges of the issues. The DTC is an imperfect vehicle for assisting disabled people in living with dignity and autonomy.
First, it does not reach its intended audience. There are 4.3 million Canadians aged 15 to 64 who have a disability. For 1.8 million of those Canadians, that disability is severe, and the DTC is aimed at people with a severe disability. However, only 770,000 tax filers with a disability claimed the DTC in 2017, the last year data is available. As you can see, increasing eligibility by 40,000, as this expansion hopes to do, barely scratches the surface of the problem. The current rate of use of this credit by those with severe disabilities is 42%. That’s just not good enough.
Second, it doesn’t help those disabled Canadians who need help the most. If you live in poverty, you do not pay taxes. The DTC is a non-refundable tax credit. Switching it to a refundable tax credit would mean that those in the disability community with the greatest need would see some benefit.
Third, the DTC is being used as a gateway to other benefits, creating not just a double whammy for some but a multiple whammy. Currently, you have to be accepted for DTC to be able to access the registered disability savings plan and the disability supplements from the Canada workers benefit and the child disability benefit.
In 2020, the government offered a one-time payment of $600 to disabled people as a response to the financial difficulties created by the pandemic, but only to those who were receiving Canada Pension Plan Disability benefits, the Quebec Pension Plan disability pension, veterans disability benefits or the DTC. Again, only a limited group of disabled Canadians were able to access it.
The eligibility for the DTC is extremely restrictive. Only those with severe disabilities are eligible. If the DTC is used as a gateway to other benefits, then disabled people who do not qualify for this narrow criteria not only don’t get DTC, but they also don’t get the benefits attached to it. As new benefits become available, such as the Canada disability benefit proposed in Bill C-22, which was tabled on June 2, it is imperative that the DTC is not used as a gateway. Otherwise, these benefits will continue to fail to reach their intended audiences.
To review, to benefit from this disability tax credit, you need to be someone with severe disabilities who pays taxes. I’m sure you can see the issues here. In the context of the Auditor General’s report last week, this tax credit is not serving vulnerable disabled Canadians who live at the margins of intersectional identities at all. These views are not mine alone. In fact, you can find them in committee reports of MPs and senators and in the Canada Revenue Agency’s Disability Advisory Committee. You invest time in these committees and reports. I’m sure you are frustrated, as we are, when the recommendations are not acted on. With this in mind, I implore you to consider that the DTC is in need of massive reform so that it actually benefits disabled Canadians in a significant way. While the measures in Bill C-19 are welcome, they do not begin to address the issues with this program. Thank you very much for your time.