An Act to amend the Income Tax Act and the Canada Pension Plan (deeming provision)

Summary#

This bill would make it easier for people with disabilities to qualify for certain federal supports by accepting some provincial decisions. It adds “deeming” rules so that, if a province has already found you eligible for a disability credit or benefit, the federal government will usually accept that decision too, unless the Minister decides otherwise. The change applies to the federal Disability Tax Credit (DTC) starting in the 2026 tax year and to Canada Pension Plan Disability (CPP‑D) at a date not stated in the bill text provided (Income Tax Act s.118.3(1.01); applicability clause (2); Canada Pension Plan s.42(2)(a)(ii)).

• Provincial eligibility for a disability tax credit would make you eligible for the federal DTC, unless the Minister decides otherwise (Income Tax Act s.118.3(1.01)).
• This DTC change applies to 2026 and later tax years (applicability clause (2)).
• Receiving a provincial disability pension or benefit would make you “disabled” for CPP‑D purposes, unless the Minister decides otherwise (CPP s.42(2)(a)(ii)).
• The bill does not change DTC amounts, CPP contribution rules, or CPP‑D benefit formulas (no such amendments in the bill text).
• The bill aims to reduce duplicate applications and hardship (Preamble).

What it means for you#

• Households and people with disabilities

  • If your province allows an amount for mental or physical impairment under its tax laws, you would be deemed eligible for the federal DTC starting in the 2026 tax year, unless the Minister decides otherwise (Income Tax Act s.118.3(1.01); applicability clause (2)).
  • If you receive a provincial disability pension or benefit, you would be considered disabled for CPP‑D purposes, unless the Minister decides otherwise (CPP s.42(2)(a)(ii)).
  • You may face fewer duplicate forms and assessments because a provincial decision could carry over to the federal level (Preamble; deeming clauses).
  • If you do not have a provincial disability decision, current federal DTC and CPP‑D rules still apply (no change stated in bill text).

• CPP‑D applicants and recipients

  • The bill does not change CPP contribution requirements or how CPP‑D amounts are calculated; it only changes who is considered “disabled” for CPP‑D (amendment limited to CPP s.42(2)(a)).
  • You would still need to apply for CPP‑D and meet contribution rules; the deeming relates to disability status only (no other CPP amendments in the bill text).

• Caregivers and tax preparers

  • If the person you support has a qualifying provincial decision, claiming or transferring the federal DTC may be simpler starting with the 2026 tax year (Income Tax Act s.118.3(1.01); applicability clause (2)).

• Provinces and territories

  • The bill adds no new duties for provinces in the text, but federal decisions may rely on provincial determinations (deeming clauses).
  • No data‑sharing process is set out in the bill (no provision in the text provided).

Expenses#

Estimated net cost: Data unavailable.

• No official fiscal note identified. Data unavailable.
• The bill includes no explicit appropriations or new fees (bill text).
• Potential federal cost drivers (amounts not provided):
  • Higher DTC claims if more people qualify by deeming (Income Tax Act s.118.3(1.01)). Data unavailable.
  • Higher CPP‑D caseload if provincial benefit recipients are deemed disabled for CPP purposes (CPP s.42(2)(a)(ii)). Data unavailable.
  • Administrative changes to accept and verify provincial decisions. Data unavailable.
• Potential offsets (amounts not provided):
  • Reduced duplicate assessments and paperwork (Preamble). Data unavailable.

Proponents' View#

• Reduces duplicate applications and hardship by letting one level of government’s decision count at the other level (Preamble; Income Tax Act s.118.3(1.01); CPP s.42(2)(a)(ii)).
• Speeds up access to the DTC starting in 2026 by accepting provincial determinations, which may reduce delays linked to medical forms and reviews (Income Tax Act s.118.3(1.01); applicability clause (2)).
• Expands access to CPP‑D for people already proven disabled in provincial systems, decreasing the chance that valid claims are denied due to differing processes (CPP s.42(2)(a)(ii)).
• Keeps a safeguard: “unless the Minister determines otherwise” allows the federal government to refuse deemed eligibility in specific cases, supporting program integrity (Income Tax Act s.118.3(1.01); CPP s.42(2)(a)).
• May lower administrative costs over time by cutting redundant assessments; exact savings are not quantified (Preamble). Data unavailable.

Opponents' View#

• Different provincial criteria could override stricter federal standards, especially for CPP‑D, where the law currently requires a “severe and prolonged” disability; deeming based on any provincial disability benefit may broaden eligibility beyond intent (CPP s.42(2)(a)(i) vs. new (ii)).
• Federal costs for the DTC and CPP‑D may rise, and the bill identifies no funding source or offsetting measures (no fiscal provisions in bill text). Data unavailable.
• The Minister’s override power creates uncertainty for applicants and could lead to inconsistent decisions or more appeals (Income Tax Act s.118.3(1.01); CPP s.42(2)(a)).
• Implementation could be complex without clear data‑sharing rules between provinces and federal agencies, risking delays or errors (no administrative framework in bill text).
• For tax purposes, some provinces already link their disability amounts to federal eligibility; critics may say the DTC deeming will have uneven effects across provinces and may not remove duplication everywhere (Income Tax Act s.118.3(1.01)). Data unavailable.