Disability Tax Credit Promoters Restrictions Act

Last fall, Cheryl Gallant, MP for Renfrew-Nipissing-Pembroke introduced the Disability Tax Credit Promoters Restrictions Act, a private members bill to limit the fees charged for the preparation of Disability Tax Credit Applications.

Last month, this bill passed second reading in the House of Commons unanimously and was referred to the Standing Committee on Finance.

This bill seeks to place a limit on the fees charged by promoters to file for the Disability Tax Credit on behalf of taxpayers.  In recent years, the ability to claim up to ten years of missed disability tax credits has prompted a new industry of “consultants” who may charge a contingency fee of up to 40% of the benefits received. With the value of the credit being about $1500 (depending on the province of residence), a 10-year claim could result in a $15,000 refund – and a contingency fee of up to $6,000.

This bill, if it is passed, would allow the maximum fee for the preparation of the Disability Tax Credit Application to be set by Regulation. Those who charge more than the prescribed maximum fee would be subject to a fine of the greater of $1,000 and the excess fee charged. The bill further requires that anyone who charges more than the prescribed fee notify the Minister of the fee charged and, if they fail to do so, are subject to an additional fine of between $1,000 and $25,000.