March 20, 2024
An Access to Information and Privacy (ATIP) request has resolved a long-standing mystery - Why has the CRA dug in its heels as far as using 90% as a guideline for defining its “all or substantially all of the time” clause in the Income Tax Act?
First of all, when testifying before the Sub-committee on the Status of Persons with Disabilities on February 5, 2002, Robert Dubrule, Senior Tax Policy Officer with the Agency stated that several rulings in Tax Court of Canada cases supported the inflexible guideline: “Given the jurisprudence in all of those cases involving the Income Tax Act, ‘all or substantially all’ has been interpreted as meaning 90 per cent.”
However, there was no evidence to support such a claim.
In an email, dated August 26, 2016, from Louis Garneau to senior staff of the DTC program, he noted that the 90% rule was based on misinformation:
“With respect to jurisprudence, there is nothing conclusive that requires the 90% rule to be met. In Young v. the Queen 2003, TCC 153, Justice Little, (mistakenly) states in paragraph 19 that:
[19] In order to qualify under sections 118.3 and 118.4 of the Act, the Appellant must be markedly restricted in his ability to perform a basic activity of daily living… Our courts have said that the phrase 'all or substantially all of the time' means 90% or more.’
Other than this particular reference, we were unable to locate jurisprudence that requires the 90% rule to be met.”
Louis Garneau was thorough in his investigations. In his email, he makes reference to Watts v. The Queen 2004 TCC 535 where Justice Bowman (in a GST case) ruled that varying amounts from 76% to 81% of taxpayer’s income that was taxable over a three-year period “could qualify as all or substantially all.’”
The CRA disregarded Garneau’s extensive discussion of court cases and analysis of the meaning of “substantial.” Instead, the Agency has continued to apply the rigid criteria as if it had some basis in law. As a result, thousands of claims have been denied by enforcing such a false narrative.
Now that the eligibility for the new Canada Disability Benefit may require DTC-eligibility, it is essential that the CRA remove the 90% criteria in the application process the tax credit. Otherwise, some of the most vulnerable members of our society will continue to be left behind.
TAGS - DTC, CRA
