Tory pledge to expand DTC eligibility would cost $177M over five years

The federal Conservatives’ promise to broaden eligibility for the disability tax credit (DTC) would cost $177 million over five years to implement, according to an estimate from the Parliamentary Budget Office (PBO) released this week.

If elected, the Tories would reduce the number of weekly hours of life-sustaining therapy required to qualify for the DTC to 10 from 14 hours beginning in 2022.

The proposal would make it easier for Canadians with diabetes in particular to access the DTC, the Conservatives indicated in their campaign plan, representing an average tax savings of $2,100 a year for an eligible individual or their family. The change also would make qualifying for the Registered Disability Savings Plan (RDSP) easier.

The PBO estimate included costs arising from the DTC as well as the RDSP, the Disability Savings Grants/Bonds and the Canada Workers Benefit Disability Supplement, programs that require an individual to be eligible for the DTC.

The PBO costed several more Tory promises, including others directed at helping Canadians living with disability.

The PBO estimated the pledge to extend sickness benefits under the employment insurance (EI) program to 52 weeks from 26 would cost $4 billion, net, over the next five years. In the fifth year, however, government revenues would increase, since the EI premium rate would rise over a seven-year period.

Meanwhile, a pledge to allow tax filers to claim all expenses associated with necessary attendant care as medical expenses for the purposes of the Medical Expense Tax Credit would cost $26 million over the next five years. This move would extend eligibility to part-time attendant care provided in a private residence to persons not already eligible by reason of a DTC certificate.

In 2017, the Canada Revenue Agency (CRA) made a change to the way it administered DTC applications under life-sustaining therapy, resulting in thousands of Canadians with diabetes being denied access. After backlash, the CRA later that year reverted to its previous method of administering the applications and subsequently approved the majority of those who had been denied.

In the 2021 federal budget, the Liberals proposed recognizing more activities that could be included in determining time spent on life-sustaining therapy and reducing the minimum required frequency of therapy to qualify for the DTC to two times a week from three. The number of weekly hours of therapy required would remain at 14. The Liberals also promised to introduce a new Canada Disability Benefit. Those budget proposals were not passed before the election was called.

In the Liberal election platform, the party committed to create a workplace accessibility fund “to help increase the availability of accommodations that help close gaps in access to good paying jobs and education” for Canadians living with disabilities. The party also promised to focus on the “timely and ambitious” implementation of the Accessible Canada Act, legislation the Liberals passed in 2019 to help the government set accessibility standards and remove barriers to accessibility in all areas under federal jurisdiction.

The NDP platform promised to introduce a basic livable income that would “lift every senior and person living with a disability out of poverty”; end private, for-profit long-term and home care services and bring them “under the public umbrella” to ensure access; strengthen the Accessibility Act to cover all federal agencies equally, with the power to make and enforce accessibility standards in a timely manner; and expand EI sickness benefits to 50 weeks and create a pilot project within EI to allow workers with episodic illnesses and disabilities to access benefits.

In an emailed statement to Advisor’s Edge, Kimberley Hanson, executive director of Diabetes Canada, called the Conservative campaign promise “a step in the right direction,” but said that 10 hours “is still a relatively arbitrary number [of hours] that creates an administrative burden for people living with disabilities and their health care providers.”

Hanson also praised the Liberals’ federal budget proposal to broaden the list of acceptable activities that could be counted toward the required 14 hours as “helpful,” but cautioned the directive “will have to be enshrined carefully in the regulations and operating procedures so that [the new rules] are well understood by applicants and assessed consistently across the board.

“[Our] preferred solution is the recommendation made by the [federal government’s] Disability Advisory Committee that all people requiring life-sustaining therapy automatically qualify for the DTC,” Hanson wrote.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.