[Recorded by Electronic Apparatus]
Thursday, April 25, 1996
.1122 
[English]
The Chair: I see a quorum.
Madam Minister, it's my pleasure to welcome you here today. I know our committee is very delighted with your very swift response to its request to come and discuss the disability tax credit and the interpretation and the definition of same. I know they count on you for candid explanations and, where those are not available, feedback from your staff at some point.
I would like you to know we have very qualified members around this table, irrespective of party affiliation. They've been very committed to the well-being of the disabled and to the support of their families who look after them within their own homes.
In that light, I would like to start the discussion. I would like to ask the members to allow each to go through the questions they have. Let's try not to be repetitive. Let's try to build so the issue that's before us and the interests of the disabled will be best met.
[Translation]
You want to make a statement, Madam? Please go ahead. Would you introduce your colleagues?
[English]
Hon. Jane Stewart (Minister of National Revenue): Merci beaucoup.
Let me begin by thanking you for giving me the opportunity to be here. I certainly do know you have qualified members on this particular issue as part of the committee.
I would like to introduce Mike Burpee, assistant deputy minister for assessment and collections; and Edie Pastuch, our senior programs officer, assessment and collection branch.
I make a small apology. We did have the use of technology to present some of this information to you. However, when we discovered we were going to have to keep you in the dark if you were going to see it on the large screens we decided not to do that, because certainly - and I sincerely mean this - we don't want to keep you in the dark about the disability tax credit. So I apologize, but I have a rather lengthy statement, because the details of this plan are quite complex, as most of you know. I want to make sure you have the detail and the understanding of how the system works in advance, if that's appropriate.
The Chair: That's very appropriate. Have you distributed that statement, Madam Minister?
Mrs. Stewart: I believe the materials are with the members.
I begin by saying that as you know, Revenue Canada is an administrative department. It doesn't set policy, it implements it. But when you become Minister of National Revenue you quickly learn that how you administer an act or a given policy is what makes that policy real for people who are affected by it. This is certainly true with the disability tax credit.
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One of the very first departmental briefings I asked for when I became Minister of National Revenue was on this program. Colleagues, many of whom are sitting here, had come to me in the lobby of the House with questions, and several others wrote to inquire about constituents who recently might have been found ineligible for this credit or to make representations on their behalf.
I can tell you that your letters and comments raised a lot of questions in my mind - questions like why do we have a disability tax credit? How is the disability tax credit administered? Why might one person qualify and another not qualify when they both have the same medical condition? Why did Revenue Canada change the disability tax credit certificate? Why were many disabled tax credit recipients retroactively reassessed last year and denied the benefit? Were eligibility requirements tightened? Why has Revenue Canada targeted this vulnerable segment of society?
Today I propose to take you through the questions as well as the responses I received and explain what we have done to address them.
Let's look at this first question about why we have the disability tax credit. Canada prides itself on its commitment to caring for the less fortunate in society. The disability tax credit recognizes that Canadians with severe disabilities face a higher cost of living and working.
Tax relief for people with disabilities was introduced into the Income Tax Act in 1944, initially as a disability deduction, and it was provided to the blind. Shortly afterwards individuals confined to a bed or wheelchair could also claim the deduction. In 1986 the scope of the disability tax credit was expanded and the definition was broadened to what it is today, which is to provide tax relief to individuals with severe and prolonged physical or mental impairments that markedly restrict the basic activity of daily living. In 1991, in an effort to clarify who was eligible for the credit under the expanded definition, the Minister of Finance amended the Income Tax Act to add specific definitions of the terms ``markedly restricted'' and ``basic activities of daily living''.
Since the scope of the disability tax credit was expanded in 1986, the number of people claiming the credit has risen steadily. In 1986 approximately 179,000 people claimed the credit, which resulted in federal tax relief of about $83 million. In 1994 an estimated 560,000 people claimed the credit, which provided federal tax relief of close to $300 million.
I'd now like to explain how the disability tax credit has been administered, and I think this is critically important. Within this legislative framework, which was established by the Minister of Finance, Revenue Canada administers the disability tax credit program. Before I explain the administration of this credit particularly, I think it's necessary to outline some of the fundamentals of our tax system.
The Canadian tax system is based on self-assessment. Individuals volunteer facts about their income, determine whether they qualify for credits and calculate their taxes payable. They do that themselves. Once Revenue Canada receives an income tax return, the return is processed quickly with a minimum of review. This ensures that if an individual is entitled to a refund, the refund is sent as quickly as possible.
Since individuals determine whether or not they are entitled to claim deductions or credits, it's necessary to review a number of claims, including those for the disability tax credit, after they have been assessed in order to ensure that they have been properly claimed. Normally when it's determined that an individual incorrectly claimed a deduction or credit, the individual's return for the year under review, and where appropriate for a previous year, are reassessed to disallow the claim for the deduction or credit.
In dealing with a claim for disability tax credit, it's important to note that when an individual claims the credit for the first time, they are required to submit a form T-2201, the disability tax credit certificate. A copy of the certificate is in your package. This must be completed by the individual's physician or optometrist. In later years the individual does not have to resubmit the form to claim the disability tax credit.
Revenue Canada then assesses the return with a minimum of review, and the individual receives the benefits. As I mentioned, some of the tax returns are reviewed after assessment to ensure that only those individuals who meet the eligibility requirements are allowed to claim. This review applies to all the various credits and deductions in the Income Tax Act.
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I would like to add that the disability tax credit legislation that the Department of Finance developed and that Revenue Canada administers is a very difficult and complex program. The legislation in the Income Tax Act severely restricts eligibility for this program.
One example of the difficulties Revenue Canada faces in administering the legislation can be found in the definition of ``basic activities of daily living''. I've provided a copy of the definition in your package. When you take time to review it, you'll see what I mean about the complexity we face.
The problem in administering the restrictive legislation is compounded by the fact that many Canadians consider themselves to have a disability. They feel they should be able to claim the so-called ``disability tax credit'' because they are, after all, disabled. However, the legislation is significantly narrower than the widely accepted definition of ``disabled''. For example, about 4.2 million Canadians have identified themselves to Statistics Canada as having a disability, but only a small percentage of this number actually qualify for the disability tax credit based on the existing legislation.
Let's look at the next question I asked. Why might one person qualify and another not qualify when they both have the same medical condition? At the outset it's necessary to consider the eligibility requirements for the disability tax credit outlined in the Income Tax Act. An individual is entitled to claim the credit only when that individual has a severe and prolonged physical or mental impairment that markedly restricts a basic activity of daily living. It is the effect of the impairment on the individual which qualifies that person for the credit, not the medical diagnosis itself.
This means two individuals diagnosed with the same medical condition but with different levels of functional impairment might not both qualify for the credit. This may occur when one individual is markedly restricted in a basic activity of daily living while another individual is not.
The Income Tax Act also states that in order for a person to qualify, the person's ability to perform the basic activities of daily living must be markedly restricted all or almost all the time, even with therapy and the use of appropriate aids and medications. It's important to realize that under the Income Tax Act a person is not entitled to claim the disability tax credit if that person is markedly restricted in carrying out a basic activity of daily living occasionally or only part of the time.
One additional point I'd like to emphasize is that Revenue Canada does not make the determination of whether an individual is markedly restricted in carrying out a basic activity. This determination is made by the individual's doctor or optometrist on form T-2201.
Let's look at the certificate. Some may ask why Revenue Canada changed the disability tax credit certificate. In 1993, in response to concerns expressed by the Canadian Medical Association, members of the medical community, individuals, and advocacy groups representing people with disabilities, Revenue Canada undertook an extensive review of the disability tax program, and in particular form T-2201, the disability tax credit certificate. In 1994, as a result of this review, the department, in consultation with the CMA and advocacy groups, made substantial revisions to the form. These revisions made the form easier to complete and provided more information to physicians and the individual about the eligibility requirements for the disability tax credit. They also permitted Revenue Canada to determine more easily whether an individual's doctor had concluded the individual was eligible for the credit.
I must point out that these changes to the form in no way changed the eligibility requirements for the disability tax credit. Yet people ask - and many of you have had this question - why many disability tax credit recipients were retroactively reassessed last year and denied the benefit.
As part of our responsibility to ensure the integrity of all our programs and to ensure the provisions of the Income Tax Act are being fairly administered, we have regular post-assessments. For the 1994 taxation year it was decided to review the disability tax credit claims made by some of the existing claimants. Since the form is filed only in the year the disability tax credit is initially claimed, it became evident that in some cases, because they were using the old form, the individual's file had insufficient information to determine whether they were eligible for the credit.
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In the majority of cases that were reviewed, Revenue Canada found that individuals had been correctly claiming the disability credit. However, many of the retroactive reassessments that have caused the complaints arose as a result of this particular review.
It's important to note that the retroactive reassessments result from the fact that Revenue Canada tries to initially assess individuals' returns quickly to speed up the payment of refunds. However, this means that when it is later found that a credit or deduction was incorrectly claimed, Revenue Canada must issue retroactive reassessments.
Some who have been reassessed now ask if eligibility requirements were tightened. I want to emphasize that since 1986 there have been no changes to the eligibility criteria for the disability tax credit. In 1991 again the Minister of Finance clarified the eligibility requirements for the disability tax credit in the Income Tax Act by adding specific definitions of the terms ``markedly restricted'' and ``basic activities of daily living''.
Some people have the impression that Revenue Canada has changed or tightened the eligibility criteria. This stems from the fact that people were recently reassessed and disallowed the disability tax credit as a result of last year's post-assessment program, yet they had been receiving the credit for a number of years. It's really understandable that when these individuals were informed that they were ineligible, they assumed that Revenue Canada had changed the rules. I can see how an individual could believe that they were entitled to the disability tax credit once they had received their original assessment that allowed the credit. However, reassessments of this nature have been a fundamental part of the self-assessment tax system, particularly when tax returns are processed quickly with a minimum of review.
As a last question, I've been asked by many of you why Revenue Canada has targeted this vulnerable segment of society.
The challenge for Revenue Canada is to be fair to individuals who are claiming the disability tax credit, and to all Canadians. To do so, Revenue Canada should ensure the integrity of the self-assessment tax system, especially for those who recognize that while they may be disabled, they do not qualify for the disability tax credit, and they do not attempt to claim it.
To be fair and equitable, the review of claims, including claims for the disability tax credit, is necessary to administer the Income Tax Act fairly and not to cause hardship to individuals. Any review is undertaken so that only those tax filers who are entitled to claim a credit based on the law are allowed to do so.
I recognize that many of the individuals who claim the disability tax credit even if they may not meet the definition as provided by the Minister of Finance are vulnerable. I want to do everything I can to minimize the impact of any review of the disability tax credit.
So these were the issues I was faced with as a new minister. To address the issues that came to my attention, I took the following steps, which I outlined in a package I sent to each member of Parliament on March 14, 1996.
I had to address three situations: first, the people who were reassessed in the post-assessment program last; second, new claimants, people who will make claims this year and on an ongoing basis; and third, the people who were part of the 560,000 Canadians who claimed the credit or part of it in 1994 and who have never been reviewed.
I want to talk about what I've done to deal with each of these situations.
First, last year's post-assessment program: As I indicated, the normal procedure in circumstances where an individual is reassessed to delete a deduction or credit that was incorrectly claimed is to reassess the year under review and the previous taxation year. Many of the individuals who incorrectly claimed the disability tax credit did so in the belief that they were entitled to the credit on the basis that they had been claiming the credit for a number of years and they had never been questioned by Revenue Canada.
In light of the fact that many of these individuals were in a vulnerable segment of society, I endorsed the decisions to recover the disability tax credit only for the year under review and that, in all cases of financial hardship, any interest that accrued on the tax liability as a result of a reassessment to disallow the disability tax credit would be waived under the fairness provisions of the Income Tax Act.
.1140
I can also assure you that in dealing with these individuals who were denied the disability tax credit, the department will continue to act in a sensitive and compassionate manner. In particular, where necessary, a mutually satisfactory repayment plan that does not cause financial hardship will be established.
In my letter of March 14, I encouraged all members of Parliament to bring these cases to the attention of their tax services office.
Let me be clear. We have talked to every one of our offices and indicated they can expect to hear from you or from Canadians who have been disallowed the credit so they can work specifically with individuals on repayment plans.
Let's look at new claimants. As I've already indicated, individuals who wish to claim the disability tax credit for the first time are required to file a certificate signed by their physician or optometrist. To avoid the problem the department encountered with its review of the disability tax credit program last year, all new claims for the disability tax credit will now be reviewed at the time of initial assessment.
While this will slow down somewhat the process of assessing returns and issuing refunds, I understand these delays will be minimal. The department will do everything it can to ensure the returns are processed promptly. This will reduce the possibility that new claimants who successfully claimed the disability tax credit will find out at a later date they were not eligible.
I believe this slight delay in processing the returns will be more than offset by the fact that new claimants will be able to be confident that once their initial tax return is assessed, they will be entitled to continue to receive the disability tax credit as long as their circumstances do not change.
Finally, for future reassessments of existing claimants, it must be noted that there are a number of individuals who have previously claimed the disability tax credit who have not had their claims verified. It would be impractical and costly to both the individual and the department to ask all existing claimants in these circumstances to submit a new form with updated information. Therefore, it is not my intention for such an extensive review to be undertaken.
That means existing claimants will still be subject to random reviews after assessment. I have instructed my officials to continue to act in a sensitive manner when dealing with individuals who will be reviewed and may be found ineligible for the credit. If existing disability tax credit claimants are found to be ineligible for the credit in future, they will be treated in the same way as those claimants who were found to be ineligible in last year's review.
This means, and I repeat again, the reassessment will be limited to the current year's return. It means in all cases of financial hardship, any interest accruing as a result of reassessment to disallow the disability tax credit will be waived under the fairness provisions of the Income Tax Act. A flexible and mutually acceptable repayment plan will be established with the individual.
A key element of this solution is education. To avoid a recurrence of the recent problems the department has had with disability tax credit, I want to ensure that Canadians with disabilities have the information they need to determine their eligibility for the credit.
Therefore, I've asked that a new pamphlet be prepared and widely distributed to give people the information they need to better understand the credit, its purpose and who is eligible. This pamphlet will be distributed to existing claimants and potential new claimants. A draft pamphlet has been developed and will be sent to stakeholder groups for comments, particularly comments about the method of distributing this information to people who need it.
I now want to bring to your attention one example of a situation that I believe is indicative of the fair and sensible approach the department is taking to administer the disability tax credit.
Recently, the Canadian National Institute for the Blind contacted my office to advise me that in their view the wording of form T-2201 relating to the question about vision was confusing. This question was being misinterpreted by physicians and optometrists when they were determining whether their patients qualified for the disability tax credit.
The department reviewed the concerns raised by the CNIB and concluded that some physicians may well have misinterpreted the form. The department then informed the CNIB that the form would be revised, and the CNIB was asked for their advice as to the most appropriate wording.
I also assured the CNIB that any individuals who had been denied the credit as a result of this problem would be allowed the disability tax credit. I asked the CNIB for their help in identifying those individuals who incorrectly may have been denied.
In addition, I asked the department to review all claims that were denied and were related to vision impairment during last year's post-assessment program to determine whether the reason for credit disallowance was because of the problem with the form.
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Finally, I'd like to mention that the disability tax credit is just one of several programs and tax measures available to persons with disabilities at both the federal and provincial levels. Other programs include the disability pension under CPP or QPP, workers' compensation benefits, the medical expense tax credit, the infirm dependant credit, the child care expense deduction, various employment-related tax measures and the GST zero-rated status for medical devices.
In conclusion, colleagues, we've approached concerns about this very important program at a number of levels. We're working to change the culture at Revenue Canada so all levels of our administration recognize different clients have different needs and must be dealt with in different ways. We have found solutions to key concerns about the current administration in order to ensure certainty and fairness. As you know, new administrative issues are brought to our attention on an ongoing basis, and we respond to them. This is an area where your views and suggestions can help develop an even more efficient administrative regime.
But there's only so much we can do from an administrative perspective. The broad policy issues raised by this tax credit must be addressed through another process. Our government is looking for ways to improve the way we support people with disabilities. In the 1996 budget the Minister of Finance made the commitment to examine measures, including those in the tax system, that have an impact on people with disabilities. Your views of these issues will be of great assistance as we undertake our examination of policies having an impact on this segment of our society.
I want to thank you for bearing with me as I tried to explain to you the complexities of this program and the strategies and methods I have implemented to date to improve the administration of this extremely important tax credit to Canadians.
I do look forward to your comments and questions, and I sincerely mean it when I say that I look forward to any advice you have for us in areas where we can improve the administration of the disability tax credit.
The Chair: I thank you very much for a very full review of the new responsibilities that you've undertaken.
I think there is one question many of the members might well wish to have you address. You talked about the changes you've made, and you included the new form. I would ask, was this new form reviewed before you tabled your own report, committee?
An hon. member: We didn't.
The Chair: It wasn't reviewed, I was advised.
I just wanted to ask you the following. You consulted with advocacy groups and with the CMA, the Canadian Medical Association. There is one question that comes to mind. If you have the material or the information handy, I would appreciate having it. But if not, I'd like to know which advocacy groups you consulted. Secondly, did you submit the form once you drew it up? And did you get their approval or not? As you know, the consultation takes place, and then you never know what the fallout from that consultation is. So if you are able to answer this question, I'd be curious to know.
Mrs. Stewart: Let me begin with the response, Madam Chair. In particular, one of the groups we reviewed the form with was the CNIB. They directed us and requested us to remove from the form the indication a claimant would put on...the number they have to identify them as being blind. So we did that. But at the time, neither we nor the CNIB identified the problem I referred to here. We looked at it together and missed an important aspect. So again, we've had to go back and make a change.
There were certainly other groups involved in the process, and I'd ask either Edie or Mike to give you a listing of those.
Mr. Michael Burpee (Interim Assistant Deputy Minister, Assessment and Collections Branch, Department of National Revenue): I don't have all the names here. I know there were more than 40 groups. We'll get you the names.
The Chair: I just want to be assured there was that cross-check after you had the consultation, for which we can say thank you. But we can't say thank you if the end result didn't allow the groups participating in the consultation to give you feedback on the way you structured the form.
And as you mentioned that it had not been seen, I had our staff pull it out. I think that's a question they may well ask themselves.
Mrs. Stewart: Excuse me, I think Edie has some more information.
Ms Edie Pastuch (Senior Programs Officer, Assessment and Collections Branch, Department of National Revenue): As Mike mentioned, there were 48 groups consulted. These included groups such as the Diabetes Association, the Paraplegic Association, the Canadian National Institute for the Blind.
Mrs. Stewart: The Council of Canadians with Disabilities was one.
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Ms Pastuch: That's right. We also had conference calls with these groups where we actually talked about the content of the forum. We went over the questions on the forum and listened to their concerns and suggestions as to how best to ask the questions reflected in the legislation.
[Translation]
The Chair: Mr. Bernier, go ahead.
Mr. Bernier (Mégantic--Compton--Stampstead): Madam Chair, even if we started our meeting late because of votes in the House, we've given Madam Minister all the time she needed to make a presentation. We'll now be able to have an interesting discussion.
I'd like to ask you, as well as my colleagues, for some additional information, so that the Official Opposition can ask all the questions that it has prepared for this meeting. I don't know at what time we were supposed to end or at what time the Minister must leave, but I want to make sure that we can ask all of our questions.
Don't worry, Madam Chair, I haven't prepared questions to draw this session out, but rather to make sure we get all the information, particularly concerning disabled persons, who are expecting a lot from this committee in its recommendations to the Minister.
I'd like to take this opportunity to bring up the presence of representatives of certain groups sitting in on today's meeting.
The Chair: If all the questions aren't answered during the meeting, you'll get a written response.
Mr. Bernier: I'd like us to take full advantage of the Minister's presence. Madam Minister, at what time do you have to leave?
[English]
Mrs. Stewart: I am in the hands of the chair, so to the extent that she has...I have time.
The Chair: Even if I have to leave, because I have another committee meeting, we will go until the normal time of 1 p.m.
[Translation]
Mr. Bernier: That gives us at least an hour. In any case, I'd like to be given the time I need to ask my questions.
I'll start with the statistics but I don't want to get into a long discussion on this.
I see that in the paper, you've already answered one of our questions. You state that in 1986, prior to the changes made in 1993, 100,000 people took advantage of the disability tax credit. Have I understood the document correctly?
[English]
Mrs. Stewart: These numbers refer specifically to the claimants for the disability tax credit. In 1986, as we said, it was about 180,000, and in 1993 we moved up to 560,000.
[Translation]
Mr. Bernier: Madam Minister, before 1993 and by province, how many people asked for the tax credit and how much money did these claims represent? I would like to get the information for the year 1992, so that we can compare it to the years 1993 and 1994.
You talked about a change in attitude concerning the way cases are reviewed. You're now asking your department's employees to keep to the year of the income tax return, not to go back in time and avoid significant refunds.
How many cases concerning the tax credit are presently being reviewed by the department? How many cases have been processed to date and in how many cases were payments mode?
What are you going to do with these cases? Are you going to review them? Are you going to apply the same rule to the people who are being reviewed? How many cases are presently being reviewed? How many cases are being appealed before the Federal Court?
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[English]
Mrs. Stewart: As a result of our review last year, 45,000 cases were reviewed and 30% of those were reassessed, so 30% were found to be ineligible.
If people feel that the reassessment is inappropriate they can appeal. Many of them come to their members of Parliament and say, what's happening here and can't you help me with this? We've talked about a number of those. At the appeal stage those are looked at by an independent third person, someone independent of the file, and a second determination is made.
I would say that a number of those who were reassessed have repaid their tax. They have gone through the process, they have appreciated the fact that they were ineligible for the tax credit, and they have made their repayments. For others who are in the appeal process, some have been denied a second time and have been reassessed and are working with our tax centres to develop a mutually satisfactory repayment plan. Others, as you point out, may choose to take the appeal to tax court.
In terms of numbers, I'm not sure if all of those numbers would be available at this point. Are they, Mike?
Mr. Burpee: I can tell you what is outstanding. There are currently 334 appeals outstanding and over 2,000 notices of objection being handled by our appeals people.
[Translation]
Mr. Bernier: An appeal before the Federal Court, Tax Sub-Division.
[English]
Mr. Burpee: Before the courts there are 334 cases. In our own appeals function there are over 2,000 cases.
The Chair: I think that Mr. Bernier and this committee would want to know from you quite specifically.... A 30% change is a very significant number. As a matter of fact, it's quite shocking. Something wrong took place. I don't know if it's your new form that has made it clearer so that the medical doctors don't make a mistake, or what the process was, but I think we're entitled to know what the numbers were before you went through this process. Is this increase of 30% a result of the consultations you've had with those committees, with all the disabled groups? Or is it because there are far more restrictions and lack of identification or acceptance of the disability of people within families in Canada today?
[Translation]
Mr. Bernier: That is precisely the meaning of my question. That's why these numbers are so important. We want to see the difference between what was done before and what is done now. We have to know what these numbers are precisely. I understand that you'd like to have some time, but I would like...
[English]
Mrs. Stewart: I have those numbers if you want. They aren't broken out by province. I can say that of the 560,000 claimants in 1994, about 103,000 were from the province of Quebec. I don't have the further details. In 1992 there were 505...I'll table this with the committee. It is incremental and you can see how each year there are more and more claimants for the disability tax credit.
[Translation]
Mr. Bernier: We would like to know the difference between the way the tax credit was applied in 1992 and what has been done since. You understand the meaning of my question, I think, andMrs. Finestone also narrowed it down. It's important to know the number of claims and the number of refusals.
[English]
Mrs. Stewart: Let me be clear on that. People continue -
The Chair: I think a demographic analysis is wanted, Madam Minister.
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Mrs. Stewart: Mr. Bernier, you would like a demographic analysis by province and by year. Is that what you're requesting?
[Translation]
Mr. Bernier: No. I don't want a demographical analysis or a sociological study. I want to know the amount. Those are numbers that you gave earlier.
I want to know - and I think that this is what interests the members of the committee and disabled persons - how many people asked for and were granted the tax credit in 1992, and how many claimed it in 1993 and during the following years and were given it. I would like a breakdown by province, which would allow us to carry out our own analysis.
There's also the whole matter concerning numbers and cases being reviewed or appealed. What will you do with those cases? Will you process them the way you are processing them now? Some people have already repaid. I've met some in my riding. Those people will be penalized if... Are you okay, Mrs. Stewart?
Mrs. Stewart: I'm okay. Thank you.
Mr. Bernier: Very well. So you will send us those numbers.
The Chair: Mr. Bernier, you've already exceeded your time limit, but you wanted to ask some other questions. Do you want to ask them right away or do you prefer to wait to the end.
Mr. Bernier: There are colleagues who may want to add some things concerning the numbers.
I'd like to speak with the minister concerning the interpretation of tax credits and the changes. I'll come back to that.
The Chair: Mr. Maloney.
[English]
Mr. Maloney (Erie): Mrs. Stewart, as I understand it, there is one set of criteria to qualify for a Canada disability pension and another set of criteria to qualify for the disability tax credit. Why is that?
Mrs. Stewart: That's a very good point, Mr. Maloney. What we're talking about is the fact that we have a number of programs in place that support Canadians with disabilities. The Canada Pension Plan disability is there for people who are not going to be able to go back to work and need to have some form of day-to-day living allowance or salary.
There are a number of other programs. The disability tax credit is but one. It's very focused. As you know, when we have government programs they tend to be targeted. There is just so much money, and we want to make sure we have it in the right places.
One of the real questions the committee will be asking, I'm sure, is whether we have the balance right. Do we have the right programs to support Canadians with disabilities? Does the disability tax credit, along with CPP, along with QPP, along with the medical expense deduction and all the others I itemized in my representation, give us enough flexibility to make sure Canadians with disabilities have the support they need?
This program doesn't necessarily respond to the same issues as either the CPP or the medical expense deduction. It's there specifically for Canadians with disabilities who have severe and prolonged and marked restrictions on their basic daily living activities. So it's very focused, very narrow. You may ask whether that's appropriate, but that's a question of policy.
Mr. Maloney: It certainly is very focused and very narrow - and I don't say this facetiously. I think in order to qualify under any of these seven criteria, very literally you'd almost have to be on your deathbed, or very severely impaired. I'm just wondering whether the whole spirit of the disability legislation is too focused, too restrictive.
Mrs. Stewart: That's a question you may ask -
Mr. Maloney: I do ask.
Mrs. Stewart: - the Minister of Finance. These are questions of policy. I would point to the budget, where the Minister of Finance has given us the opportunity and said this government needs to stand back and look at the programs we have in place, and to be sure that we as a government are supporting Canadians with disabilities.
Again, this is but one program I have to administer. I do have to administer it, as I said in my text, in the restrictive limitations of the Income Tax Act as it's defined now.
Mr. Maloney: My final question, just on the reassessment situation, is that I found in my experience, with constituents coming in, that people in this predicament have financial problems, or dire financial problems - perhaps it fluctuates. I'm surprised you have only 30% rejection. I thought it would have been much more than that. But would it not be perhaps possible, because of what's happened and because perhaps the government is somewhat at fault here - I don't think we're blameless in this situation - that a lot of people realize that perhaps they don't quality, but in their financial circumstances it is an extreme financial burden to have to repay the previous year's reassessment? Perhaps the interest could be waived. I appreciate that, but the clock may start ticking again.
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I wonder whether there could not be an exception. Because of all the extenuating circumstances, we might look at a more favourable treatment of these people who are in fact reassessed, accept that, and pay. It is the previous years I have some difficulty with.
Mrs. Stewart: There's no question that some of the constituents you see do come and are in very difficult circumstances. That's very clear. I have some as my constituents as well.
In the broader context, we have some Canadians who have been reassessed and made the payments back. We have others who are in a particularly constraining position, and that's why I have said let's not go back. Let's target the year we made the assessment in. For heaven's sake, let's use the fairness and hardship provisions that were recently included in the income tax legislation so we can look at the individuals you're talking about specifically.
But quite frankly, to issue a broad remission order for everybody who was reassessed and finds themselves in a position of repayment would not necessarily be the fairest and most equitable approach in this particular case. As I say, we have had people who chose not to apply for the disability tax credit because they assessed themselves appropriately, I would assume. We have people who have made the repayments. We have people who can make the repayments and are not in a vulnerable circumstance. But we have people who do need our help, and we have the provisions in the act to treat them fairly and with compassion as individuals. What I've indicated to our tax offices is that they must do that.
Mr. Maloney: Thank you, Madam Chair.
The Chair: Mr. MacLellan.
Mr. MacLellan (Cape Breton - The Sydneys): Thank you very much, Madam Chair.
Madam Minister, I would personally like to thank you very much for the work you have done on this so quickly. You've showed a lot of compassion and understanding, and I think that should be recognized. This is a complex area, and I think you've relieved quite substantially the concerns of a lot of people.
Even though you mention the financial capability to pay, there's another factor that I think is as important; that is, the anxiety this request for financial review causes to a lot of people who are severely handicapped and are very ill. The stress they go through can actually have quite a detrimental effect on their health and may actually mean shortening their lives. So this is a concern from that point of view that I hope the offices will consider as well as the financial capacity.
I want to ask for one clarification. On page 13 where you talk about the means, you say in question 2 that reassessment will be limited to the current year's return, which I think is a dramatic improvement. You say in question 2 that in all cases of financial hardship any interest that accrues as a result of the reassessment to disallow the disability tax credit will be waived under the fairness provisions of the Income Tax Act, and question 3, a repayment plan will be established with the individual that is both flexible and mutually acceptable.
Does that mean there is going to be a forgiveness, or is there going to be a forgiveness of the terms that would normally apply and a reassessment as to the financial ability of that person to pay but they're still going to have to pay? It's the latter, isn't it?
Mrs. Stewart: First of all, let me point out that the member has provided to me extremely valuable information in helping me to get to the state we are at now. I recognize and appreciate that.
In the case of the examples you are giving, where we find there is no ability to pay there is no ability to collect. At the end of the line, if someone has no ability to pay, we are not going to put them in a continuous position of hardship.
Mr. MacLellan: Will that be acknowledged fairly quickly?
Mrs. Stewart: To the individual.
Mr. MacLellan: So it won't drag on, because that gets back to the anxiety concern that I have.
.1210
Mrs. Stewart: I can appreciate that, and you've given me examples of individuals who clearly are in this circumstance. So the tax offices are aware of that. They have the full ability to work with repayment plans, whether $5 a month or in some cases zero because there's just no income available to make that repayment.
Mr. MacLellan: I would like to ask a question on a different subject. It relates to a notice and a statement made about fishermen and their families. Of course this is a UI problem, but as you know, it is referred to Revenue Canada for determination whether families of fishers are sufficiently at arm's length to qualify for UI in the terms and in the opinion of Revenue Canada. It was stated that members of a fisher's family cannot work for that fisher and they will not be granted UI as a result of that. Is that what the department means, or is it that the same burden of proof and the same standard have to be applied to members of the family as would be to someone else who is outside the family and who works for that fisher?
Mrs. Stewart: This is a completely separate topic. Let's make that clear for the committee.
The Chair: I haven't decided if I'm going to allow it. It's a fascinating subject.
Mrs. Stewart: It's another one that may be the subject of a committee review. Certainly it's a topic that's been of interest to me, because we all find circumstances where the arm's length legislation is hard to interpret.
The indications are that it's not a stand-pat ``you are or you aren't''. I'm sure there's an individual review in every case to determine whether the arm's length requirement is clear or not. So it's not an immediate ``no'', but there is a review in every individual case to ensure there are appropriate safeguards to protect the system.
Mr. MacLellan: Thank you.
The Chair: I don't know if the same question falls into line, but about arm's length, I find it quite fascinating that you can transfer and take a disability tax credit as long as you're living in the same home, but if there is a removal to a nursing home, all of a sudden you can't take that tax credit. This doesn't make any sense, and I would like to understand why.
Ms Pastuch: The credit is still transferable provided the person is still dependent for support. The criterion is not whether they actually live in the home, it's whether they are dependent on the person for support.
The Chair: Mr. Young is our senior adviser and researcher and knows more about this than almost anybody, maybe outside yourselves. He may want to follow up on that question.
Mr. William Young (Committee Researcher): It was just that my accountant, who was doing my income tax yesterday and who knew you might be coming before this committee, suggested this was a question he had encountered as an accountant.
Ms Pastuch: I think sometimes what happens with older people when they go into a home or something is they become dependent on a different source for support, in which case they wouldn't qualify. But if the child or the supporting person continues to support them while they're in that facility, they wouldn't be restricted from claiming the unused disability amount.
Mrs. Stewart: This is a circumstance where someone other than the claimant themselves collect the DTC. Do you understand that?
The Chair: Yes, I understood that. Thank you.
[Translation]
Mr. Bernier, please.
Mr. Bernier: I'd like to take a few minutes to examine the whole matter of the tax credit eligibility requirements, and how they are applied. You said that since 1986, there hasn't been any change in eligibility requirements.
I'm not a lawyer and I don't want to start a legal battle. I'll accept that there perhaps hasn't been any change in the eligibility requirements, but the fact remains that more people were found ineligible for tax credits when stricter application of the criteria began. That's what I'd like to talk about.
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Some very compelling court rulings, and you know them no doubt, support my statement. I won't enumerate all of these decisions, because you undoubtedly have them at your department, but the federal court judges who ruled on this matter faced the same problem as us. They said that they had before them a person who was obviously disabled. It was clear and they had the medical reports. One judge even stated that he didn't care about the interpretation or the wording of the Act, that he had before him a disabled person who was limited. I repeat, there are very compelling decisions on this subject.
Madam Minister, I find it a bit much that you say there haven't been any changes concerning the requirements. I think there have been changes. There was one concerning the medical certificates. Presently, medical certificates are one source of the problem. The part where the doctor could put in additional information was taken out. It is limited to very specific questions: Can the person walk? Can you understand what the person says, in a room? This leads to ridiculous situations, but for the disabled persons living them, it's not funny. It can be quite dramatic.
I refer you to our committee's report and to the very interesting documents provided by the research service. In it, it is stated that all disabled persons' groups want compensation for the limitations they have to deal with in their daily lives.
That's the basic premise. It can't be carried out universally. You can't put everyone in the same basket. You're right to ask how it's possible that two people who have the same disability are not treated in the same way for taxes purposes. It's quite normal, because those two people may be living completely different situations, depending on the place where they live or the activities they take part in.
But when you look at the daily activities that you consider eligible for the tax credit, you notice, for instance, that a person is recognized as disabled only when he or she cannot feed himself or herself without assistance... That this person prepares his or her food or not or that her or she finds it difficult to do so is not considered. How can you eat if you cannot prepare your food? I think that's a pretty basic question.
If that person wants to eat, he or she must make his or her own make a meal, depending on one's limitations, one may take a lot more time than somebody else. A person may even need another person to prepare his or her meal. It's the same thing when it comes to clearing the snow from the yard, the staircase, and so on. You can't limit daily activities to the ones on the list, and that's one of the basic problems.
I'd like to hear what you have to say about that, and I would particularly like to hear you make some straightforward commitments. That is the crux of the matter. Of course later, you have to go case by case, because there are no two identical cases and we all agree that the requirements shouldn't apply unvaryingly to everyone. You have to consider all of the measures, without forgetting leisure, work, and so on. The members of the committee said so in their report: disabled persons want to be considered in the same way as everyone else on the job market.
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When the time comes to apply this requirement, they are told that work is not considered part of daily activities. If it isn't part of a person's daily activities, what are we doing around this table?
I would like to hear what kind of undertaking you'd be ready to make concerning reviewing these requirements and how they are applied.
[English]
The Chair: I think, Madam Minister, in summation, in essence it's a good question. The issue is clearly enunciated. If you have a question such as this, yes or no does not allow for the subtleties and some of the realities. If you're having trouble feeding yourself, it's pretty obvious you are having trouble preparing the food. You can die of starvation, while you may well be able to eat with some help. I think that's essentially -
Mrs. Stewart: Mr. Bernier has drawn a number of very good points to the attention of the committee.
We are talking about the form itself. I note that there is room for a narrative to go with it, and a critical point of difference in our process now is that it is the doctor of the individual, who presumably knows the individual, who is completing the form and upon whose advice we rely.
In consideration of the policy questions that you are asking here, I have to remind you that I am responsible to administer an act as it is defined currently. I suggest that there may well be some recommendations that you want to make to the Minister of Finance for changes to the act that would broaden my ability to administer it and to accept claims in a less restrictive fashion.
Again, I would encourage you to look not only at the disability tax credit but at all of the programs that we have available to us - federally, as Canadians, and provincially, as Canadians who live in different provinces - to see where the holes really do exist in terms of supporting someone who can't cook their own meals. They may well be receiving the CPP. The balance is a total picture that we have to look at here from a policy point of view.
I just want to make something clear, though, when we're talking about the activity recently. The review that was undertaken by Revenue Canada last year was a focused, structured post-audit. The strategies that we have are the post-audit programs on an ongoing basis.
Last year we looked at the disability tax credit and several others in detail. As a result, we found this 30% of 45,000 reviewed.
They were typically in a higher-risk category. We looked at where we were having a number of cases from the same residence, the same address. We took higher-risk ones. So we assume that the 30% would be high.
One strategy that Revenue Canada uses is a regular focused audit. Next year it won't be the same kind of intensive audit; it will be more of a fully random audit. These are the different strategies Revenue Canada takes to make sure that there is integrity in the system.
We have to look at a number of things here, but it's clearly important to separate the issue of policy, which speaks to the Minister of Finance and the tax act, and administration, which then comes to Revenue in terms of the responsibilities I have.
[Translation]
Mr. Bernier: I would just like to say, concerning the more political matter, you have the support of the Standing Committee on Human Rights and the Status of Disabled Persons.
Your colleagues here signed a report that we tabled in the House and that requests, specifically, of the Minister of Finance... I understand very well the distinction you're drawing between you, the Minister of Revenue, and the Minister of Finance. However, I presume your speak to each other, that you are in contact. During his budget speech, the Minister of Finance made a distinct commitment to review the whole issue of programs, credits and taxation for disabled persons. I'm convinced you can be very influential in this matter.
The Official Opposition, members of the Reform Party and your colleagues signed this report. You therefore have our support. I would like you to send out a clear message, particularly to disabled persons, saying that as Minister of Revenue, you'll ask that these requirements be reviewed. That's what I'm asking of you.
Everyone around the table agrees that the tax credit for disabled persons, as with any other tax measure or expenditure, should not be abused. Disabled persons aren't asking for favouritism or charity. They want respect, and that their real needs be considered.
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That's the commitment I want from you. I don't want you to tell me that you're the Minister of Revenue. I know that, Madam.
[English]
Mrs. Stewart: Mr. Bernier, let me say that as Minister of Revenue I commit to administering the disability tax credit as it currently is defined in the Income Tax Act fairly and with compassion. As a minister of the Crown, and at the cabinet table, I fully support the indications in the 1996 budget that say we as a government need to stand back and look at the programs that exist for Canadians with disabilities and ensure the needs of those Canadians are being met. Those are the things I can commit to completing.
[Translation]
Mr. Bernier: May I continue?
The Chair: No, unfortunately. You've already had 12 minutes.
[English]
I regret it, Madam Minister, but I have to open a meeting. I'll come back. I do have some questions. I'm going to ask Russ, as a colleague, to ask my questions after Andy Scott if I'm not back.
I thank you very much for being here.
Mr. Russell MacLellan will take over the chair.
Mr. Scott (Fredericton - York - Sunbury): Madam Minister, I should say I have to go along with Mr. MacLellan on the promptness of your response and your sensitivity on the issue. As tax collectors go, you seem to be relatively sympathetic to our plight.
What I would like to do for a second is to make sure I understand exactly the process that got us here. Had I been earlier in the order of questions I would have relieved you of blaming Finance. This is a policy problem, and I understand exactly who's doing what here. I want to walk this through, just to be sure it's clear, just to make sure I'm right, and perhaps to bring clarity.
When the definition was changed -
Mrs. Stewart: In 1986.
Mr. Scott: - in 1986, when the parameters, the guiding direction given to Revenue Canada to make a determination...that was the critical time when the definition was changed. Correct?
Mrs. Stewart: Yes.
Mr. Scott: Then what happened is in the exercise of doing annual post-audits in Revenue Canada to find out how this self-proclaimed system functions, you caught that definition. It was the first time we caught it. Is that correct? Was the doing of that audit the first time?
Mrs. Stewart: No.
Mr. Scott: Where was the critical moment?
Mrs. Stewart: There was the original definition, targeting the blind, then expanded to wheelchair and beds, then in 1986...saying, gee, we should be able to expand this to include more Canadians, and the spirit of the law will consider - this is what you received in your testimony from Finance in November - situations that are reflective of being blind or confined to a bed. So we're going to expand the definition to include the details where we have ``severe and prolonged'' and ``markedly restricted in the activities of basic daily life''. We continued to accept claimants and found there was difficulty in saying how we define ``markedly....'' So in 1991 specific definitions were given for how you would interpret those words in 1996.
Mr. Scott: That is subsection 118.4(1). Okay.
Mrs. Stewart: That's right. And they are very specific.
Mr. Scott: That's what the audit caught.
Mrs. Stewart: In 1991 there were those changes. Then we felt the form we had was a narrative and wasn't supplying the detail against which we could measure subsection 118.4(1). So there was an agreement with advocacy groups and individuals in the CMA to utilize the new form.
Again, as we have standard auditing practices, we had a large audit in 1995. That's where we found we have people who have not complied or are not eligible, given the definition.
.1230
Mr. Scott: Okay. That's how I understood it. When I spoke of ``definition'', I meant subsection 118.4(1).
Again, I understand the difference, and the difficulty you may have in terms of agreeing with this - but I don't have any difficulty - in that this is the problem, that this writing is what has caused this to happen.
Legally, this may be an appropriate definition, but it doesn't necessarily reflect the way in which both the public and Revenue Canada perceived it prior to the application of that. Being the people responsible for administering it, it's caused a change. That's the reason, I think, the public believes there's been a change, because as far as Revenue Canada is concerned, there has been a change. They now have different definitions than they brought to bear prior to subsection 118.4(1).
For the committee's purposes, in terms of fixing this, if we take it upon ourselves to try to do that, that seems to me to be the source of fixing it.
Mrs. Stewart: There seems to be discussion over how you define the 1986 broadening.
Mr. Scott: I think we know what the challenge is in terms of where the source of the problem is. The rest of it is to some extent rhetorical. That's the problem. Having said that, we have a couple of other challenges in the meantime.
This is going to take a little while.
I appreciate how quickly you have responded, Madam Minister, to the problem in terms of the fact that the amount was within your purview to fix. In terms of giving the latitude to the local offices - and I say this only to get it back on the record how important this is - so that independent of the financial impact, just the ability of a local manager, or local office, to make the decision that there is no way they're going to get any, so let's relieve this person of having to worry, call relatives.... I mean, the stress just multiplies. There's a ripple in all of this, particularly when I think most people know at the very beginning there is no way they're going to be able to recover anything there. In any case, why put these people through this anguish, as my colleague, the new chair, mentioned earlier? That's one.
The other thing has to do with references to other sources of income. Some of the correspondence received by people who find themselves in the preliminary stages of this - and I'm not sure whether it's written correspondence, but certainly it's verbal - advises people how overpayment might be recovered, particularly if the client says, look, they don't have any money, so what's the purpose of all this? Someone will refer to the fact that they're also on other federal programs.
Mrs. Stewart: They receive income from other federal programs?
Mr. Scott: Yes. The obvious inference is, ``We can get you.'' If you're on federal programs and someone who is a federal official, even if they're in a different department, alludes to the fact that when the person says they don't have any money or income, they're impoverished...and then when they say, well, you're receiving income in other programs....
So I think it's very important to communicate to the departments how that might be interpreted. I'm not suggesting that's what's intended, but that is very often -
Mrs. Stewart: There's a sense of a threat.
Mr. Scott: It's going to be garnisheed. If you're on some program and you're getting money from another federal department, or you're getting an income tax deduction for some other reason or another, even though that may not be what is intended, that certainly what's interpreted. I think it's very important, particularly in those cases where at the very beginning of the exercise you know you're not going to recover any amount of money. We're not talking about money here, we're just talking about the peace of mind of these people.
In terms of the broader issue, though, it occurs to me that quite appropriately you've identified that we've been given an invitation in the budget by the Minister of Finance to deal with how to best attend to the income problem faced by the constituency we're talking about. The provinces are at this moment putting forward some ideas.
I know in our province there's a good deal of interest in rethinking this, and in the context of federal-provincial negotiations to have the federal government more engaged in income support and the provinces more engaged in the other kinds of programming.
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In your letter of March 15 you refer to the fact of dealing with the provinces. Is your department engaged in that exercise as well, or is that happening with Finance?
Mrs. Stewart: That will strictly be through Finance, yes. That is not a focus in terms of administration activities.
Mr. Scott: I'm trying to figure out strategically how to deal with this. It occurs to me that there have been two openings. One is the opening that the Department of Finance or the minister gave us in the budget, but the other is the fact that we're engaged in federal-provincial relations on other issues.
Mrs. Stewart: It would still be Finance, but the option that exists is that we are capable of managing credits and deductions that are designed provincially. We can help them with those programs, and in fact we're doing that with British Columbia now, with their child tax credit program.
So to the extent that from an administrative point of view we can help them to implement a program, we can certainly talk about that with an individual province.
[Translation]
Mr. Bernier: This will probably be my last round. Madam Minister, I have a few questions to ask and some recommendations to make, but before doing so I'd like to thank you for accepting to meet us. I realize that you're sensitive to this issue. If I speak passionately about the way disabled persons are treated, it's because it's an issue that is of great concern to me.
My intention, and that of the Official Opposition, is to make sure that we get tangible results. I think that this is also what you want and that's why I'm expecting you to make some serious commitments. I know how open you've been and I think that the same applies to disabled persons and their groups. However, I don't want to speak on their behalf. There is a feeling that there is openness, but it has to be made substantial through real decisions.
My colleague spoke of a need for cooperation or for discussions with the provinces concerning how the tax credit is applied. I agree completely, especially in view of the fact that Quebec applies a tax credit which is practically identical. I have before me the wording of the sections of Revenue Quebec and Revenue Canada on this subject. They are similar in all respects. However, the credit is applied very differently when it comes to the eligibility requirements.
Madam Minister, disabled persons are only asking - and this is easy - to be compensated for the additional costs being incurred because of their limitations. Disabled persons aren't asking for special treatment compared to other Canadians. If tomorrow morning, you and I develop some kind of impairment - and nobody wants this - , we wouldn't ask to be treated differently. We'd want to be treated fairly, above all.
In this context, there are already definitions that are recognized throughout the world to identify disabilities, limitations. The technical language has developed tremendously over the last few years, and I think it would be easy for the Minister of Revenue and the Minister of Finance to amend the relevant legislation and adapt it to these definitions. That would solve a good part of the problem.
I repeat that our committee has made recommendations. Last December, we recommended that the tax credit be reviewed so that it be more in keeping with the intent of the Act. That is what I'm asking of you today, as the Official Opposition representative and on behalf of the committee.
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We're not asking the Minister of Revenue and the Minister of Finance to carry out endless studies. We're asking, along with disabled persons groups, that decisions be made.
We want things to change. There have been endless studies and it is evident that these did not yield any significant results. So we are asking for a real review.
As Minister of Revenue, do you undertake to work with your colleague at Finance so that this review is carried out this year, in cooperation of course with disabled persons and their groups?
I would also ask you to draw the attention of Cabinet members to the issue of coordinating all policies concerning disabled persons. This isn't the Minister of Revenue's responsibility, but as a member of the Cabinet, you can support one of our main recommendations, which is also a recommendation of disabled persons: to clear up at the federal level the extreme confusion in the policies concerning disabled persons.
Since April 1996, since the end of the national strategy, the solution has been simple. We ask that the Prime Minister appoint a Secretary of State to handle all the policies concerning disabled persons. In that way, we'd meet one of your expectations, as that Secretary of State would not only deal with the disability tax credit, but also with all the other tax and political measures that help disabled persons.
These are some tangible solutions. I'd like to hear your comments before finishing.
[English]
Mrs. Stewart: Certainly I expect that the results of the committee work, as you look at this particular tax credit and others in support of Canadians with disability, will be extremely valuable to the cabinet as we focus on the aspect of the budget that says we're going to stand back and look at the programs we have in place.
So the ideas you have shared at this point with the committee, Mr. Bernier, I'm sure will be taken into their consideration. They're very real to me, having listened to them personally, and I think they'll be helpful, as you put it, to decongest - that's a very good word the interpreter used - the programs that are in place and make sure they really are effective in providing the support we should be providing to Canadians with disabilities.
[Translation]
Mr. Bernier: Concerning a reform or amendments to the Act, which were announced by the Minister of Finance, would you, as Minister of Revenue, want this reform to be carried out in the coming year?
[English]
Mrs. Stewart: I have seized this file and made it a ministerial file from my point of view as the Minister of National Revenue. I want to work as aggressively as I possibly can to at least make sure that the administration of this program as it exists now is as fair and appropriate as possible. Any suggestions that you have for me I am more than willing to accept.
As an individual, I strongly believe that we have to look at the circumstances of Canadians with disabilities in the modern world. We've seen the changes from 1944 to 1986 to 1991. We know that Canadians are facing circumstances today that they didn't face even 20 years ago, and we have to be responsive to that. We can't expect the programs we had in place in the past to be able to prepare us and provide us for the programs we need for the future.
The Acting Chair (Mr. MacLellan): Madam Minister, you stated that the Department of Finance will be doing the review of section 118.4 and other areas of the Income Tax Act. I wondered, though, if your department has done projections in anticipation of the aging population of the number of seniors that may actually be applying for and be granted Canada pension disabilities. Could you share any results of these reviews or studies with us?
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Mrs. Stewart: That's a very good question. Certainly, in the context of looking at the circumstances, the demographics are going to be a critical aspect in identifying the programs that are going to be appropriate.
Mike, I don't know if you have some comments to make on the reviews?
Mr. Burpee: We ourselves have not done any studies, but I understand that Finance has. I'm sure they'd be willing to share them with the committee.
The Acting Chair (Mr. MacLellan): It has been said that the medical expenses tax credit provides proportionately larger benefits for those who have extraordinary one-time costs than for those with more severe and prolonged disabilities. Has consideration been given to making the medical expenses tax credit more generous for people with severe and prolonged disabilities, such as for attendant services? Would this be done by extending eligible expenses or by increasing tax subsidies?
Mrs. Stewart: Again that would be a question of policy, so in terms of practising administration, it's not necessarily something we would look at from our department. But it is a question that should be asked in the broader review of the circumstances.
Mr. Scott: I would like a clarification on the numbers we spoke of earlier when we were talking about what we would like to get. It will be important for the exercise that we're about to be engaged in. I think we all know that important decisions are going to be taken and we need as much interest in this as we can possibly manufacture.
I would be interested in the kinds of tables we referred to, which would indicate how many people were in annually, by region and so on, and how many people have been ruled outside the system, and then what's been the outcome of various appeal processes that have resulted from that.
So it's not a question just of the preliminary decision that took them out. Some of them have got back in. I would like to be given a sense of where that is and even, to some extent, if it's possible, on what grounds. Where was the department making certain determinations that in fact others have decided otherwise?
The Acting Chair (Mr. MacLellan): Perhaps that information could be made available to all members.
Mr. Scott: Absolutely. That's what I was asking for.
Mrs. Stewart: Absolutely. This is helpful, to be specific in your request.
Mr. Scott: And the recovery.
Mrs. Stewart: Do you mean the successful recovery of funds?
Mr. Scott: Yes. I'm not after this in the context of making sure we're recovering every nickel - quite the contrary. What I'm getting at is that I think some fundamental decisions are made because when the various advocacy groups and consumer groups appear before us they're very quick to bring to our attention, appropriately, that we're talking about a constituency that generally speaking is economically deprived. Consequently it's very important to know just what the point of a lot of this is, in that we're talking about a group of people that if we were to recover money, it's probably our money.... In many cases it involves other programs coming in anyway.
Mrs. Stewart: This is a critically important question, and I go back to the point I made in my representation.
As we administer tax law in Revenue Canada, we use the self-assessment, post-audit, and potentially repayment of taxes strategy. We've made a fundamental change in this particular case, as we recognize that using that process puts Canadians with disabilities who may in fact be in the lower economic strata.... We're just not going to collect that money.
So to be able to pre-assess in Revenue Canada, which is something we don't do with any other tax format, credit or deduction, it's a fundamental shift in our understanding and a responsiveness to an identification that there are differences, that individuals are in different circumstances.
This is a sort of new awakening in terms of tax administration policy. So it has begun with this. It doesn't necessarily have to end here, but it may provide us with some insight into how we collect taxes in modern society.
These are questions that are critically important for our future.
[Translation]
Mr. Bernier: Will the information you gave us this morning be distributed to all members of Parliament? That would be interesting. I can't speak for the other caucuses, but for our part, we discussed it yesterday. All the MPs are very interested in this topic and I'm sure they would appreciate the information.
.1250
[English]
Mrs. Stewart: This is why I felt it important to write the letter of March 1996. I knew it was of concern to a number of colleagues.
If you deem it appropriate, I can certainly have packages made for the broad Parliament.
[Translation]
Mr. Bernier: Yes.
Mrs. Stewart: Agreed.
The Acting Chair (Mr. MacLellan): Thank you, Mr. Bernier.
[English]
Madam Minister, I want to thank you and your officials very much for your presentation. It has been very comprehensive, and very important, I might say, for many people in Canada who wonder where we are going on this. You've answered a lot of questions. You've put a lot of people at ease.
Mrs. Stewart: Thank you.
The Acting Chair (Mr. MacLellan): The meeting is adjourned.