A.    What is the LCO’s Project about? 

Each of us receives support with decision-making as a natural part of daily life. Family members and friends often ask for advice when they are faced with a choice and come to a decision together. Service providers, such as financial advisors, also present clients with information and counsel them in their areas of expertise. In this sense, the activity that underlies every individual’s decisions is inevitably dynamic, depending on his or her own choice. Nevertheless, there are circumstances where adults will be required by law to have another person make decisions on their behalf. The Law Commission of Ontario’s (LCO) project on the RDSP concerns one such circumstance.

The RDSP is a long-term savings vehicle created by the federal government for persons with disability. Under the Income Tax Act (ITA), adults can open an RDSP for themselves and decide the plan terms as the “plan holder”. However, the ITA provides that where an adult is not “contractually competent to enter into a disability savings plan” with a financial institution that issues the RDSP, another legally authorized person must act as the plan holder.[1] Therefore, a financial institution may decline to enter into an RDSP arrangement with a beneficiary who does not meet the common law test of capacity to enter into a contract. An adult or another interested person, such as a family member, may also believe that an adult lacks legal capacity to establish an RDSP and wish to appoint a plan holder before approaching a financial institution. 

The ITA does not contain a process to appoint a plan holder for adult beneficiaries. Instead, it requires that a guardian, attorney or other legally authorized person be appointed under provincial laws. In Ontario, the Substitute Decisions Act, 1992 (SDA) governs the appointment of guardians and attorneys for property management.[2] However, this framework has been a source of concern for adults and their family and friends, who have faced challenges establishing an RDSP as a result of the SDA requirements. For instance, adults have been unable to appoint a plan holder through a power of attorney (POA) because the threshold for capacity under the SDA that would entitle them to do so may be out of reach. Furthermore, the exigencies of applying for guardianship have been perceived as disproportionate to appointing a plan holder due to associated costs, time and possible repercussions on an adult’s well-being. 

In the course of the LCO’s project, we heard from a range of individuals and organizations that an alternative process that is inexpensive, user-friendly and narrowly focused on the RDSP could alleviate the above concerns and improve participation in the program. This report responds to these aspirations in recommending the creation of a streamlined process to appoint an RDSP legal representative who can act as the plan holder for beneficiaries in Ontario.

The report was approved by the LCO Board of Governors in June 2014.


B.    Recommendations

Our recommendations are intended to be pragmatic and strike an appropriate balance between the rights of adults with disabilities, the risks of financial abuse and the interests of other important actors who could be affected. 

The Law Commission of Ontario recommends that the Government of Ontario implement a process that would enable adults to personally appoint an RDSP legal representative to open and manage funds in an RDSP.[3] The process would be available to adults where there are concerns about their capacity to enter into an RDSP contract with a financial institution and they do not have an attorney or guardian for property. 

We recommend that the criteria to grant such a personal appointment be based on the definition of legal capacity to grant a power of attorney at common law. However, if the Government of Ontario believes these criteria are not flexible enough to improve access to the RDSP, we recommend that they be based on section 8(2) of the British Columbia Representation Agreement Act.[4] Once appointed, the RDSP legal representative would have the duties of an attorney for property under the Substitute Decisions Act, 1992, as applicable, and be held to the same standard of care. 

We also make recommendations with respect to questions that flow from the process described above, such as who could be eligible to be an RDSP legal representative, how third parties can be provided with certainty and finality, and what measures could be put in place to effectively safeguard adults against the risks of financial abuse. 

A full list of our recommendations is found in Chapter V at page 57.


C.    How Our Project Came to Be

1.     Request from the Government of Ontario

This project came to the LCO as a request from the Government of Ontario. The LCO is currently engaged in a large, multi-year project that comprehensively reviews Ontario’s laws regarding legal capacity, decision-making and guardianship. Acknowledging our work in that area, the Ontario government asked the Law Commission of Ontario to undertake an additional review that would focus on how adults with developmental or mental disabilities might be better enabled to participate in [the RDSP].[5]

The LCO Board of Governors approved this project in April 2013. The Ontario government announced its request and the LCO’s agreement in the Ontario Budget, A Prosperous and Fair Ontario, in May 2013. 

The genesis of this project does, however, extend further back than the LCO’s involvement and it merits the brief explanation provided below. 

2.     The Federal Government’s 2011 Review of the RDSP and Subsequent Activities

The RDSP is a federal benefit that has been available since December 2008. Similar to other registered savings plans, it is regulated under the ITA and offered through participating financial institutions – such as banks and credit unions – alongside mainstream investment products.

Opening an RDSP requires a plan holder to enter into a contract with a financial institution. Beneficiaries who have reached the age of majority can be the plan holder of their own RDSP. However, the ITA provides that where an adult is not “contractually competent” to open an RDSP, a guardian or another “legally authorized” person must be the plan holder.[6] The ITA itself does not provide for a process to appoint such persons to act as a plan holder. Instead, as mentioned above, they must be appointed under separate provincial laws. 

In 2011, the federal government undertook a review of the RDSP program. During that review, adults and their families voiced concerns with respect to existing processes within provincial jurisdictions to designate an RDSP plan holder. In response to those concerns, the federal government put in place a provisional remedy to permit a parent, spouse or common-law partner to become a plan holder where, in a financial institution’s opinion, the beneficiary’s capacity to open an RDSP “is in doubt”.[7] However, the federal government’s measures will expire at the end of 2016.

Some stakeholders have asked the federal government to amend the ITA permanently to address the subject matter of this project out of concern that, as a federal benefit, the RDSP should be treated uniformly across the country. They claim that the federal government has constitutional jurisdiction to regulate the issue of legal representation for the RDSP because it is essential to an effective, national legislative scheme. They point to examples under the Canada Pension Plan (CPP) and Old Age Security (OAS), where the federal government administers the appointment of representatives for persons who have been found to be incapable of managing their payments.[8]

During the 2011 RDSP review, the federal government held extensive consultations to consider this proposal. However, it has stated that it considers the issue to fall within provincial responsibility. In the Economic Action Plan 2012, the federal government suggested that the provinces and territories develop “more appropriate, long-term solutions to address RDSP legal representation issues”.[9] It also encouraged certain provinces and territories, including Ontario, to “examine whether streamlined processes would be suitable for their jurisdiction”.[10]

The following year, in April 2013, the Minister of Finance asked the Standing Senate Committee on Banking, Trade and Commerce (the Senate Committee) to study the ability of individuals to establish an RDSP, with particular emphasis on legal representation and the ability of individuals to enter into a contract.[11] The Senate Committee heard testimony on the respective jurisdictions of the federal and provincial governments to deal with the subject matter of this project, and on other impediments to accessing to the RDSP. 

In its report, The Registered Disability Savings Plan Program: Why Isn’t it Helping More People?, the Senate Committee found that it was “unable to examine fully the effectiveness of the provincial and territorial procedures…that are currently in place” based on the testimony it heard.[12] Moreover, it stated that “the Committee is not certain that a federal form of the type described by some of the witnesses would resolve the problem with legal capacity and representation in relation to the RDSP”.[13]

The Senate Committee urged provinces that have not yet examined their legislation to do so and recommended that the “federal government continue to work with the provinces to improve access to the program”.[14] The Senate Committee also recommended that if the federal measures expire before the provinces have implemented changes to their frameworks, “the federal government should study two options: the feasibility of other proposals to ensure access to the RDSP program, and the possibility of extending the existing temporary measures”.[15] In March 2013, the federal Minister of Finance wrote the Premier of Ontario requesting that Ontario, along with other provinces and territories, address this issue in light of their existing processes.

As indicated previously, the Ontario government asked the LCO to undertake this project with a view to making recommendations for reform in this province. In the Economic Action Plan 2014, the federal government noted that some provinces have instituted streamlined processes or have indicated that their system already provides sufficient flexibility to address the concerns of RDSP beneficiaries. It also stated that it appreciates the recent efforts of the Government of Ontario in tasking the LCO with this project.[16] 


D.   The Project Scope

The scope of the LCO’s project has been narrowly defined to address a specific barrier to accessing the RDSP: the appointment of an RDSP legal representative for beneficiaries who require another person to make decisions about their RDSP in Ontario. 

1.     Recommending a Streamlined Process for the Jurisdiction of Ontario

As a provincial reform agency, we consider the LCO’s mandate to apply to Ontario laws, policies and practices and we do not make recommendations to the federal government or other jurisdictions in this report. The preceding section, “How this Project Came to Be”, summarizes proposals as to whether the federal or provincial governments should implement a solution to address the concerns of RDSP beneficiaries. Although the LCO acknowledges stakeholders’ proposals with respect to a federal solution, we consider our mandate to apply to Ontario only.

As will become clear in the remainder of this report, however, we have taken the approaches of other provinces and territories into account in coming to our recommendations. We have also suggested that Ontario enact provisions to enable adults travelling from elsewhere in the country to continue to have a plan holder who was previously appointed through a valid arrangement make decisions about their RDSP. The SDA contains a conflict of laws provision that could be used as a model. 


2.     Impediments to Accessing the RDSP Other than Legal Representation

The scope of this project is also restricted in terms of its review of the RDSP. The RDSP is a recent program, which the federal government formally reviewed shortly before the commencement of the LCO’s project. Consultations and submissions to the federal government identified a number of areas for reform to increase uptake. Changes that the federal government has made since – and others that may not have been made – are still fresh in the minds of stakeholders. Furthermore, the Standing Senate Committee on Banking, Trade and Commerce recently released its report on impediments to accessing the RDSP. However, the LCO’s project cannot address all barriers to accessing the RDSP that have been identified over the years, and is limited to recommending a streamlined process to appoint an RDSP legal representative for beneficiaries.

3.     Respecting the LCO’s Larger Project on Legal Capacity, Decision-Making and Guardianship 

Another significant aspect of the project scope is how it interacts with the LCO’s ongoing project on Legal Capacity, Decision-Making and Guardianship. It was in the context of our work on that project that we were asked to undertake this review. The former will evaluate Ontario’s framework for substitute decision-making, including powers of attorney and guardianship under the SDA and other relevant legislation.[17] 

There are many issues that overlap between the two projects and this report has certainly benefitted from insights gained in the larger project to date. For instance, we used research papers that were commissioned for that project as an important source of information in this project. While we have maintained a high level of coordination, however, our work is being conducted separately so that we can provide the Ontario government with recommendations in the RDSP project well before the federal government’s measures expire in 2016.

The two-track delivery of the LCO’s projects has had necessary implications. To the extent possible, we have tailored our research and analysis in this project to respond to stakeholders’ aspirations for a streamlined process that is narrowly focused on the RDSP. Furthermore, we have sought to limit our recommendations in major areas of overlap in order to avoid precluding options in the larger project. 

Limiting our recommendations has been particularly important for contentious questions that we have been unable to answer in the short timeline for the RDSP project but that we know could greatly impact the broader system of asset management for Ontarians under the SDA. Throughout the report, we have noted the areas where our research is ongoing on these questions in the Legal Capacity, Decision-Making and Guardianship project, so that readers can follow our progress into the future. For more information, you are also invited to visit the LCO’s website at www.lco-cdo.org.   

E.     The LCO’s Methodology

1.     Research and Consultations

This report is the culmination of extensive research and consultations that the LCO completed in the phases described below. 

Additional information, including a list of individuals and organizations consulted, Advisory Group members, and the LCO’s commissioned research for the larger capacity project and the earlier Framework projects can be found at Appendix A. If you would like a copy of our publicly released documents, please visit our website at http://www.lco-cdo.org/en/rdsp.

Shaping the Project and Formation of the Advisory Group

We initiated our study in May 2013 through internal background research and a series of in-person and telephone interviews with individuals and organizations representing a wide range of perspectives. In June 2013, we formed an ad hoc project Advisory Group from among those whom we interviewed. The Advisory Group members include representatives of government from Ontario and British Columbia, the federal government, financial institutions, the private bar, legal clinics, community and advocacy organizations, and a research institute. 

The purpose of the Advisory Group has been to provide the LCO with advice on public consultations and the substance of the project. The Advisory Group members gave the LCO essential input into the structure and content of our documents, beginning with the project scope released in September 2013. We are very grateful for the Advisory Group members’ invaluable observations and commitment.


Release of the Discussion Paper

In December 2013, we publicly disseminated a discussion paper. Shortly after, we summarized the discussion paper in accessible language for adults with disabilities and others who might not be familiar with matters in the LCO’s project.

The release of the discussion paper marked a significant step. In the discussion paper, we reviewed Ontario’s existing framework under the SDA, which could be used to appoint an attorney or guardian for RDSP beneficiaries. In addition, we analyzed a range of alternative laws, policies and programs that are available in Ontario and other jurisdictions in order to develop several options for reform. The options for reform presented in the discussion paper created the foundation for the LCO’s dedicated phase for public consultations.


Dedicated Phase for Public Consultations

Public input is an essential part of the LCO’s methodology. With the release of the discussion paper, the LCO also launched a phase for broad-based public consultations ending in February 2014. We invited members of the public to provide written submissions, and we solicited feedback from key communities through in-person focus groups and individual interviews.

This project potentially touches the lives of a broad range of individuals and organizations. The persons most affected by the project are RDSP beneficiaries, and their family and friends, as they may be the users of a future process. Given the LCO’s limited resources and timeline for the project, it was not possible for our consultations to be fully representative of their diversity of experience. Nevertheless, we heard from adults and their family and friends who have various experiences with disability, including developmental and psychosocial disabilities; persons living in low-income households; an aboriginal self-advocate; and francophone parents and siblings of adults with developmental disabilities. Aside from self-advocates and their supporters, we also carefully selected representatives of advocacy organizations to assist us in understanding the spectrum of perspectives among their clientele. 

Other parties with an interest in the outcome of this project whom we consulted in our focus groups included trusts and estates lawyers, legal clinics and financial institution employees at all levels, including legal counsel, managers and front-line staff. 

In total, the LCO held eight focus groups with participants from across Ontario, including the Greater Toronto Area, London, Smith Falls, Windsor, Peterborough and Ottawa. Five of these focus groups were held uniquely for self-advocates and their supporting family and friends, who have a wealth of perspectives on the opportunities for change. 

In addition to our focus groups, we conducted individual interviews with representatives from provincial governments across Canada and the federal government; group home service providers; and academics with expertise in issues of capacity, decision-making and access to social benefits from Canada and abroad. Over the course of the project, we held interviews with approximately 50 individuals and organizations. 

Detailed and considered written submissions were also provided to the LCO from the Advocacy Centre for the Elderly (ACE); ARCH Disability Law Centre; Canadian Bankers Association; and the Canadian Association of Community Living (CACL), Community Living Ontario (CLO) and PooranLaw. 

The LCO is very appreciative of everyone who shared their experiences with us. We would also like to express our sincere gratitude to the community partners who assisted us in organizing the focus groups, identifying participants and facilitating the discussions.


Research Commissioned for the LCO’s Other Projects

In major projects, the LCO issues a call for the preparation of research papers on relevant subjects. We rely on these papers as another source of topical literature to inform our analysis, and make them available to the public. The papers do not necessarily reflect the LCO’s views. 

For this current project, we benefited from research papers that had been prepared for our past projects on A Framework for the Law as It Affects Older Adults and A Framework for the Law as It Affects Persons with Disabilities.[18] After the discussion paper was released, the LCO also received commissioned research papers for our ongoing project on Legal Capacity, Decision-Making and Guardianship. As noted above, a list of commissioned research used in this project can be found at Appendix A. 


2.     Benchmarks for Reform

For the discussion paper, the LCO had formulated benchmarks or evaluative criteria that we believed our recommendations must meet to be effective. During our public consultations, we heard from many stakeholders that these benchmarks accurately capture their own goals for change. 

The recommendations that the LCO has made in this report reflect what we consider to be a balanced application of the benchmarks to the subject matter of this project, also taking into account our ongoing work in the Legal Capacity, Decision-Making and Guardianship project. We have applied them flexibly to the many proposals for reform that we have received, recognizing that no one solution can perfectly achieve them all.

The benchmarks were originally derived from our preliminary consultations as well as various sources of law and policy that are relevant to issues of legal capacity, representation and the RDSP. These sources include the policy objectives underlying the RDSP, Ontario’s commitments to provide services and supports to persons with disabilities, the Canadian Charter of Rights and Freedoms and the Convention on the Rights of Persons with Disabilities.[19] 

The LCO also drew on work in two prior projects in which we had released final reports, our A Framework for the Law as it Affects Older Adults and A Framework for the Law as it Affects Persons with Disabilities. Those projects define a set of principles to guide the development and evaluation of laws, policies and practices to take into account the realities and experiences of older adults and persons with disabilities, and promote positive outcomes for these members of society.[20] A full list of the Framework Principles is provided at Appendix B.

The benchmarks for reform propose that an effective process to establish an RDSP legal representative for beneficiaries do the following:

Respond to Individual Needs for RDSP Decision-Making: The process must be specific to the RDSP and should limit the extent to which it spills over into other areas of decision-making. The scope of an RDSP legal representative’s authority should be tailored to meet a beneficiary’s needs. The presumption of capacity should be retained as much as possible. Strong values of human dignity, autonomy and independence should be protected with the understanding that services and supports can improve decision-making capacity because it is social and dynamic. 

Promote Meaningful Inclusion in the Decision-Making Process: Adults must be able to make choices that affect their lives and do as much for themselves as possible with appropriate supports. All people exist along a continuum of abilities. The process should encourage each adult’s unique contributions and take into account how fluctuating and issue-specific capacity can be accommodated. An adult’s wishes about a suitable RDSP legal representative should be respected to the greatest extent possible. 

Ensure that Necessary Protections for RDSP Beneficiaries Are in Place: Legal representation in financial matters is a powerful tool that can be brandished for improper purposes. However, the absence of legal representation can also increase an adult’s vulnerability, where he or she needs someone else to make financial decisions. Every person has the right to live without fear of abuse and to receive support to protect that right. The process should include measures for sustained protection from preventative “checks and balances” to intervention, where appropriate. 

Achieve Administrative Feasibility, Cost-Effectiveness and Ease of Use: The process must be practical. It must be implementable on the ground in transactions between adults with disabilities and their families and friends, financial institutions, the government and community organizations. It must be easy for consumers to understand and use, cost-effective for all stakeholders, including the Government of Ontario, and take into account existing operational constraints. 

Provide Certainty to RDSP Legal Representatives and Third Parties: Third parties involved in delivering the RDSP to the public should have certainty, finality and protection from liability in an arrangement for an RDSP legal representative. RDSP legal representatives should also be secured against the risk of liability when complying with an expected standard of care. Securing these parties against risks could encourage their participation.  


F.     Structure of the Report

The purpose of this report is to present and explain the LCO’s final recommendations. The LCO has released a number of documents in this project that thoroughly review the key issues we have considered, approaches in other jurisdictions and several options for reform. This report is comparatively concise. If you would like to consult our full analysis, we encourage you to read our other documents, in particular the discussion paper.

Following this introduction, Chapter II provides essential background on the history of the RDSP, and its content and administration. It also clarifies when a beneficiary might need an RDSP legal representative to open and manage a plan on his or her behalf. 

Chapter III discusses the rationale for a streamlined process in Ontario. It reviews the interests of affected individuals and organizations, including adults with disability and their family and friends, advocacy organizations, financial institutions and the Ontario government. 

Chapter IV is dedicated to the LCO’s recommendations. In addition to recommending a streamlined process, we address specific questions about how it could be implemented. We consider measures to safeguard beneficiaries against financial abuse; whether community organizations should be eligible to act as RDSP legal representatives; the role of RDSP legal representatives; and the provision of accessible information to members of the public; among other issues. 

Finally, Chapter V sets out our recommendations in one summary list. 




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