Disability tax credits are critical for some Canadians. But applying for them can cost thousands

When Kathy Meyers heard she could get money back from the Canada Revenue Agency (CRA) through the disability tax credit, she was excited — but the prospect of filling out forms alongside her doctor felt like another burden to her already demanding days.

Meyers, a Port Coquitlam, B.C., resident, has Crohn's disease. Her condition is severe — even with an ileostomy and the removal of her colon, she frequents the hospital for months at a time, and is on permanent disability as she is unable to work.

So when a friend recommended True North Disability Services to handle the disability tax credit (DTC) applications for Meyers and her 14-year-old son, it felt like a perfect fit.

Her husband, who is also disabled, plans to file an application on his own, after his doctor refused to work with a DTC advocacy company.

More than a year since she first hired True North, Meyers is still awaiting the outcome of her application. But for her son's successful return, the family was billed more than $7,600 by the company — 20 per cent of the money they received from the CRA, plus GST.

According to 2018 figures from the CRA, these businesses charge people anywhere from 15 to 40 per cent in contingency fees for their services.

That's money Meyers says could have gone a long way for her low-income family, as the funds they received from the CRA have so far gone right back out the door to pay bills and debts. It also comes on top of two $150 fees she still owes her doctor, who was responsible for filling in all but two of the 16-page DTC forms for both Meyers and her son.

Meyers says she regrets using a DTC company — especially now knowing free alternatives exist.

"It's been very stressful and financially it's been very hard," Meyers said.

"I think they're abusing the people that are in need of obtaining this disability tax credit because they're taking such a big chunk of the rebate."

The CRA estimates applications for the DTC will triple in the next five to six years because it's the main requirement to get the new monthly $200 Canada Disability Benefit, which will begin payments in July.

But there remains limited awareness of free or lower cost help — with many people turning to True North and other DTC advocacy companies that offer to simplify the application process for a percentage of the return.

DTC companies say their fees — which are only charged in the case of successful applications — are critical to fund support for filing DTC applications, and also to fuel their advocacy for clients to the CRA and medical professionals.

Along with non-profits and other groups that provide free help, there are other services that charge a flat rate fee, typically a few hundred dollars.

Former MP Carla Qualtrough, who pushed for the creation of the Canada Disability Benefit in her time as minister of employment, workforce development and disability inclusion, is critical of the DTC application system — and the companies that profit from money intended for people with disabilities.

She says hearing about what Meyers's family is facing is heartbreaking.

"It feels like people are being taken advantage of," she said.

"It's really frustrating to me, because the whole point of these benefits is poverty reduction, is helping people pay for the things they desperately need, and then they are being charged thousands and thousands of dollars."

The federal government has attempted to limit the fees to $100 — but an injunction from the B.C. Supreme Court in 2021 halted this, following a legal challenge by True North and its co-founder Shane Nercessian. A trial has been scheduled for July 2026.

When reached by the CBC over the phone and email, Nercessian declined interview requests. The 2021 injunction ruling described Nercessian's argument against restricting fees.

"Mr. Nercessian deposes that the $100 maximum fee cap as set out in the Regulation would only cover basic data entry and processing, leaving little to no room to assist with issues involving eligibility, advocacy on behalf of the client … and work with the certifying health professional, and other associated services," reads the ruling.

"In the result, most, if not all, DTC companies will be driven out of business as it will no longer be economical to provide many DTC services."

The ruling also provides an overview of the services True North provides for clients, including a 10-year tax assessment, explaining the application and eligibility criteria to medical professionals, and filing objections if clients are "unjustly denied."

In an email to the CBC, Nercessian said True North is part of the Disability Tax Fairness Alliance and played a "pivotal role" in exposing issues with insulin-dependent diabetics being denied benefits.

There are former clients who say they are grateful for True North's help with their applications, such as Kathy Johnson, a resident of Blue River, B.C.

About $1,900 of the more than $9,000 she received back from the DTC went to True North. Though Johnson wasn't aware of free options prior to applying, she didn't feel she had the time and energy to do it herself — and says she would recommend True North to others.

"Really, I do have no regrets," she said.

Others do have regrets, like Leanne King, who has diabetes and polycystic kidney disease. She says she likely wouldn't have spent $3,850 with True North if she had known alternatives existed.

"I just wasn't capable at the time of managing all that they did," she said. "I do think it's a lot [of money], and I do think it's a little bit predatory, because they're dealing with people that are sick."

The Canadian Medical Association, Doctors of B.C. and disability advocates are among those calling for the DTC process to be simplified, to reduce the burden on both medical professionals and people with disabilities.

Dr. Charlene Lui, president of Doctors of B.C., says the time-consuming forms cause "significant moral distress for all physicians," as it takes them away from patients who already have limited access to doctors.

"Ideally, the form would be shortened, made easier to fill out, and be embedded within the electronic record," said Lui.

The CRA says it "significantly overhauled" the application process by digitizing it in 2023, sparked by concerns in the medical industry. When asked about whether it may streamline further with suggestions posed by Lui — such as accepting a doctor's note or forms compatible with existing files — the CRA said it is bound by legislation.

"The CRA continues its efforts to make the DTC more accessible, aligning with the [Disability Advisory Committee's] recommendations to ensure that individuals with disabilities can access the credit without financial burden," the statement reads.

Minister of Jobs and Families Patty Hajdu was unavailable for an interview, and her office did not respond to specific questions from the CBC. The ministry said Canada is funding $23.5 million for six disability non-profits to help people access benefits including the DTC for free, and $243 million to eliminate out-of-pocket fees for medical providers to fill out DTC forms.

"The Government of Canada has committed to further reviewing and reforming the process to apply for the Disability Tax Credit," said the ministry in a statement.

To Qualtrough, the issue lies with the lack of a consistent approach to disability support in Canada. Ideally, she says, people should be able to undergo a one-step process to access all provincial and federal disability benefit programs.

"We're asking tax analysts to decide and serve as the gatekeepers for these really important social benefits, it's just not the right fit," she said.