Consultation on Draft Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations – Disability Tax Credit Amendments
Submission to the Department of Finance Canada by email
Introduction
This submission responds to the draft legislative proposals released for consultation on July 23, 2026, and specifically to the proposed amendments to sections 118.3 and 118.4 of the Income Tax Act concerning the Disability Tax Credit (DTC).
It is made by Disability Without Poverty, a national disability-led organization working to end disability poverty in Canada. In January 2026, Disability Without Poverty joined a coalition of national health care professional bodies – including the Canadian Medical Association, Canadian Nurses Association, College of Family Physicians of Canada, and the national associations of occupational therapists, physiotherapists, psychologists, and social workers – in a joint letter to the Minister of Finance and National Revenue calling for urgent reform of the DTC, including expanded certification authority, recognition of provincial disability program eligibility, a streamlined application form, and a longer-term shift to an honour-and-audit model. This submission builds on that letter and reflects the lived experience of the people with disabilities we represent.
The DTC is the gateway to critical federal supports, including the Canada Disability Benefit (CDB), the Registered Disability Savings Plan, and the Child Disability Benefit, as well as a growing number of provincial and territorial programs. Its design determines whether these programs reach the people they were created for – and today, they largely do not. According to Statistics Canada's 2026 technical report on disability measurement, just 14.6 per cent of persons with disabilities, and only 34.8 per cent of those with very severe disabilities, claim the DTC. The Spring Economic Update 2026 estimated that recent administrative improvements will unlock some $345 million in support over six years for people facing access barriers – evidence of how much entitlement goes unclaimed when the gateway is too narrow.
We therefore welcome the draft amendments as a meaningful response to concerns we and others have raised, and we offer the following comments and recommendations to strengthen them before they are introduced in Parliament. Consistent with Canada's commitments under the UN Convention on the Rights of Persons with Disabilities and the principle of “nothing about us without us,” we urge the Department to finalize these measures in direct partnership with people with disabilities.
What the draft legislation gets right
Disability Without Poverty strongly supports the direction of the proposed amendments. In particular:
- Expanded certification authority. The amendments to paragraphs 118.3(1)(a.2) and (a.3) and subsection 118.4(2) meaningfully expand the range of professionals who can certify eligibility – adding physiotherapists for feeding, dressing and walking; podiatrists for walking; speech-language pathologists for feeding and hearing; and occupational therapists for eliminating (bowel or bladder functions). This directly responds to a key recommendation of the January 2026 joint letter and will improve access, particularly in rural and underserved communities, while relieving pressure on family physicians and nurse practitioners.
- A streamlined pathway for listed conditions. New paragraph 118.3(1)(a.5) creates a streamlined certification pathway for individuals with one of the enumerated conditions, sparing them the full functional assessment. For people with permanent, lifelong, or clearly qualifying conditions – and for the clinicians who complete their forms – this is a significant reduction in administrative burden and in repeated, unnecessary reassessment.
- Recognition of existing incapacity determinations. New paragraph 118.3(1)(a.4) removes a certification barrier for individuals with markedly restricting impairments in mental functions who are under the care of a provincial public guardian or trustee, or whose property is administered under section 51 of the Indian Act. Accepting an existing certificate of incapacity in these cases is exactly the kind of red-tape reduction we have called for: relying on determinations that a public authority has already made.
- Early application of the new pathways. Applying the streamlined pathways in new paragraphs (a.4) and (a.5) to the 2026 and subsequent taxation years ensures that people begin to benefit without delay.
Recommendations to strengthen the draft legislation
Recommendation 1: Add registered nurses and registered social workers as certifying practitioners
The expanded practitioner list is welcome but remains narrower than what the January 2026 joint letter recommended. Registered nurses and registered social workers are regulated professionals trained in functional assessment who are often the health professionals most accessible to people with disabilities – especially the estimated 5.9 million Canadians without a family physician or nurse practitioner.
We recommend amending subsection 118.4(2) and paragraphs 118.3(1)(a.2) and (a.3) to authorize registered nurses to certify within their scope of practice, and registered social workers to certify impairments in mental functions and in performing the mental functions necessary for everyday life. This would further reduce wait times and geographic inequities without compromising program integrity.
Recommendation 2: Broaden recognition of existing disability determinations beyond guardianship
New paragraph (a.4) rightly accepts provincial incapacity determinations – but only for the small population under formal public guardianship or trusteeship. The same logic applies far more broadly: provincial and territorial disability support programs (such as ODSP, AISH, the BC PWD designation, and the QPP disability pension) already conduct rigorous eligibility assessments.
We recommend the government build on paragraph (a.4) by recognizing eligibility for designated provincial and territorial disability programs as sufficient to establish DTC eligibility, either in this legislation or through an accompanying regulatory mechanism, while continuing federal-provincial-territorial work toward a shared definition of disability. Duplicative assessment of the same person by two levels of government serves no policy purpose and delays access to the Canada Disability Benefit.
Paragraph (a.4) should also be complemented by recognition of supported decision-making. Many people with impairments in mental functions are not under formal guardianship but rely on trusted supporters to navigate applications. Permitting supported decision-making in DTC application and administration – consistent with Article 12 of the UN Convention on the Rights of Persons with Disabilities – would extend the benefit of this provision without requiring formal incapacity determinations that many families neither want nor can obtain.
Recommendation 3: Make the paragraph (a.5) condition list transparent, updatable, and clinically coherent
Embedding a closed list of conditions in the statute risks freezing it in time and creating inequities between people with comparable functional limitations. We recommend three refinements:
(a) Move the list to regulation, or add a regulation-making power, so it can be updated through a transparent process with standing clinical and disability-community input, without requiring an amendment to the Act each time.
(b) Review notable omissions before introduction. The list omits several conditions with comparably severe and permanent functional impacts – for example multiple sclerosis (advanced), drug-resistant epilepsy, Rett syndrome, severe treatment-resistant bipolar disorder, and fetal alcohol spectrum disorder (severe). A published rationale for inclusion criteria would allow gaps to be identified and corrected systematically.
(c) Define the severity qualifiers. Terms such as “severe,” “advanced,” and “no functional recovery” are undefined, which will generate uncertainty for certifying practitioners and inconsistent adjudication by the CRA. Plain-language certification guidance, co-developed with the professions that will complete the forms, should be published before the provisions take effect.
We also recommend confirming in guidance that certifications under paragraph (a.5) are indefinite in duration, so that individuals with permanent conditions are not subjected to reassessment.
Recommendation 4: Accelerate the coming-into-force of the expanded practitioner list
Subsections (1) to (6) apply only to the 2027 and subsequent taxation years, in respect of certificates issued after 2026. This means a person seen by a physiotherapist, podiatrist, or speech-language pathologist in the remainder of 2026 must either wait or find a different practitioner – prolonging exactly the bottleneck the amendments are meant to fix, including for people trying to access the Canada Disability Benefit now.
We recommend permitting certificates from the newly authorized practitioners as of royal assent, applicable to the 2026 taxation year, mirroring the approach taken for paragraphs (a.4) and (a.5).
Recommendation 5: Revisit the “all or substantially all of the time” threshold
Beyond who certifies, eligibility itself remains overly restrictive. The requirement that a marked restriction be present “all or substantially all of the time” – administratively interpreted as 90 per cent – excludes many people with severe, episodic, or fluctuating conditions, and the CRA's own Disability Advisory Committee recommended more flexible interpretation in its 2024 report. Since sections 118.3 and 118.4 are already open for amendment, we recommend the Department use this opportunity to codify a more flexible standard, or at minimum direct updated interpretive guidance, so the streamlining achieved elsewhere in the draft is not undermined by the threshold test.
Recommendation 6: Pair the legislative changes with the administrative reforms already committed to
Legislation alone will not fix the DTC experience. The application form still takes physicians more than 36 minutes to complete on average and remains, per the CMA-CFIB National Survey on Administrative Burden, the single most burdensome form in clinical practice. We urge the Department of Finance and the CRA to move in parallel on: a streamlined, plain-language application co-designed and tested with people with disabilities; enabling applicants to complete functional assessment sections themselves, with practitioners certifying rather than transcribing, as section 118.3 already contemplates; national rollout of the two-page renewal form piloted in Manitoba, once evaluated; direct reimbursement of practitioners who certify DTC applications, as already occurs for Canada Pension Plan disability applications, so that up-front fees no longer fall on applicants who cannot afford them; and a plan to reduce the unnecessary use of temporary certificates for permanent conditions.
Recommendation 7: Commit to the longer-term shift away from tax-based gatekeeping
These amendments should be a step toward, not a substitute for, systemic reform. The DTC was never designed to serve as the de facto eligibility test for the Canada Disability Benefit and more than a dozen other federal programs. We and our health-professional partners have proposed an honour-and-audit model – allowing individuals to self-attest to functional limitations, with CRA review and random audit, in line with the government’s move toward automatic tax filing. The College of Family Physicians of Canada estimates such a shift could free clinical capacity equivalent to up to one million additional patient visits. Over the longer term, the government should work with the disability community toward a dignified, rights-based disability status determination process grounded in the Accessible Canada Act definition of disability. We ask the government to signal this direction in Budget 2026.
Conclusion
Disability Without Poverty thanks the Department of Finance for advancing these amendments, which respond substantively to the reforms we and our health care partners proposed in January 2026. With the refinements recommended above – broader certification authority, recognition of provincial determinations and supported decision-making, a transparent and updatable condition list, faster coming-into-force, a more flexible eligibility threshold, and parallel administrative reform – the legislation can deliver the accessible, low-burden DTC that Canadians with disabilities and their clinicians urgently need.
We would welcome the opportunity to discuss this submission and remain available to the Department as the legislation is finalized.
Submitted by
Rabia Khedr
CEO, Disability Without Poverty