Publications, opinions, and speeches
Extending the disability tax credit to low-income Canadians
Published on 29/01/2019
Submission to the Minister of Finance regarding federal budget 2019
While Maytree’s work touches on a variety of policies and programs that affect the lives of Canadians living in poverty, our submission to the federal government’s 2019 pre-budget consultations focuses on a single program: the disability tax credit.
The disability tax credit (DTC) is a non-refundable tax credit which reduces the amount of tax paid by people with disabilities by up to $1,220. This tax reduction provides some compensation for the unavoidable additional expenses that people with disabilities face (such as higher utility costs for heat or air conditioning, additional transportation costs, and higher prices for goods because of fewer shopping choices).
But as a non-refundable tax credit a significant number of people who meet the disability criteria are not receiving the DTC as they do not pay enough income tax. This is the “catch 22” as the people who most need the DTC are least likely to pay income tax.
Our submission urges the government to adopt the recommendation of the Standing Senate Committee on Social Affairs, Science and Technology to make the DTC a refundable tax credit so that all eligible people could benefit from it equally. At the very least, the government should conduct a feasibility study into the cost of this policy change, how it would interact with other government transfers, and its impact on provincial/territories programs linked to the DTC.