A.    Rationale for a Streamlined Process in Ontario

The LCO’s recommendations for a streamlined process to appoint an RDSP legal representative for beneficiaries primarily respond to the aspirations of adults living with disability and the family, friends and service providers who wish to establish a plan for them. 

When the federal government asked the public for feedback during its review of the RDSP, it received hundreds of submissions, many expressing concerns with existing processes to appoint a plan holder. As mentioned previously, the RDSP program does not provide a means to name a plan holder for a beneficiary who has been found to be incapable of entering into a contract with a financial institution. This differs from government administered programs, where a procedure to designate a supporter or substitute decision-maker is embedded in the program. 

For instance, a family member, caregiver or any other person can apply to Developmental Services on behalf of a person with a developmental disability who wishes to receive individualized funding for services and supports.[77] The CPP, OAS and ODSP also all permit recipients and interested persons to request the designation of an informal “trustee” to manage monthly payments.[78] 

In the case of the RDSP, a plan holder must be appointed as a guardian or other person who is “legally authorized” under separate provincial laws.[79] The existing provincial laws that apply in these circumstances, however, tend to address areas of property management that are broader than the RDSP, such as paying bills, buying and selling real estate, and covering daily expenses. With few exceptions, they are also very much focused on protecting adults from the serious harm that can occur when they are unable to make decisions for themselves, rather than on facilitating access to a benefit program, such as the RDSP. Therefore, depending on each province’s framework, these appointment processes can be rigorous. 

The federal government has reported that in some provinces, opening an RDSP “can involve a considerable amount of time and expense on the part of concerned family members, and…may have significant repercussions for the individual”.[80] During the LCO’s consultations with Ontarians, we heard personal accounts that confirmed these concerns, specifically regarding the necessity that a plan holder be an attorney or guardian appointed under the Substitute Decisions Act, 1992 – a law that was intended for broader application to property management. 

We heard that an adult with disability wanted to grant a POA for property but was informed by his lawyer that he was unable to demonstrate sufficient capacity to do so under the SDA.[81] Parents and siblings have declined to apply for guardianship to become plan holders in order to avoid their loved ones being declared “incapable” of property management.[82] Other family members have been welcomed at the bank, informally at first, but experienced difficulties later when managing the RDSP or interacting with government administrators because they did not have legal authority under the SDA.[83] One parent had decided to obtain a court order for guardianship in order to open an RDSP but had spent over six months without a resolution, incurring substantial legal fees along the way.[84] 

As these few examples show, no story that participants shared with the LCO was the same as the next. Nevertheless, common themes about the types of barriers that individuals face in Ontario did emerge as well as their aspirations for an alternative process that is specifically designed for RDSP beneficiaries. We discuss these in turn below.


1.     Beneficiaries May Be Unable to Grant a Power of Attorney to Name a Plan Holder

Powers of attorney are a private, expedient and self-determined process that would be the first avenue of recourse for adults wishing to appoint a person as their plan holder. In Ontario, an adult can execute a POA to authorize another person to “do on the grantor’s behalf anything in respect of property that the grantor could do if capable, except make a will”.[85] A POA takes effect immediately or upon the occurrence of an event that the adult can specify him or herself, and if it is a “continuing” POA, it will remain effective if an adult is found to be incapable of managing property.[86] 

Financial institutions told the LCO that POAs have functioned smoothly to designate RDSP plan holders. POAs do not always require a formal determination that an adult is “incapable” and staff may be willing to work collaboratively with the attorney together with the client, even after the appointment.[87] One bank employee summarized her views on POAs as follows:

…[W]e try to educate our clients who are holders about the distinction between a person granting a power of attorney and a person needing to be declared incapable….We have clients who have powers of attorney in place to deal with travelling if they’re out of the country. It’s a very common tool and it in fact allows informally supported decision-making. If you [are an attorney] and are able to involve the person who gave the power of attorney in the decision making, it becomes a very easy thing for the financial institution to…have the discussion with both people in the group…. I do find that that’s perhaps a point of education for families…to say that “this can often be very valuable. It’s a relatively inexpensive process to consult a lawyer and have this put into place”.[88] 

There are certainly critiques of Ontario’s framework for POAs in the banking and other contexts, some of which we address in our Legal Capacity, Decision-Making and Guardianship project. However, the major challenge that was expressed during the LCO’s public consultations with respect to POAs was that adults who experience significant challenges with decision-making have been unable to meet the requirements of the SDA that would entitle them to grant one.[89] 

The test of capacity to give a POA for property in Ontario is more stringent than in many Canadian provinces. It consists of a detailed list of requirements that “entails actual knowledge of the kind of property the grantor has and its approximate value, as well as knowledge of the specific risks and duties of an attorney for property”.[90] The SDA reads

Capacity to give continuing power of attorney

8.  (1) A person is capable of giving a continuing power of attorney if he or she,

(a)    knows what kind of property he or she has and its approximate value;

(b)    is aware of obligations owed to his or her dependants;

(c)    knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;

(d)    knows that the attorney must account for his or her dealings with the person’s property;

(e)    knows that he or she may, if capable, revoke the continuing power of attorney;

(f)     appreciates that unless the attorney manages the property prudently its value may decline; and

(g)    appreciates the possibility that the attorney could misuse the authority given to him or her.[91]

The threshold for capacity to give a POA for personal care does not apply to RDSP decision-making. However, it is illustrative of the relative stringency of the threshold for property management. It requires that an adult, 

(a)    has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and

(b)    appreciates that the person may need to have the proposed attorney make decisions for the person.[92]

The LCO received submissions that the terms to grant a POA for property under the SDA reflect the risks that an attorney might misuse his or her authority for personal financial gain, and that they are appropriate where all of an adult’s property is at stake.[93] Similar tests for continuing POAs for property management have been enacted in Nunavut, the Northwest Territories and British Columbia, and the Law Reform Commission of Nova Scotia recently recommended one for its jurisdiction.[94] 

Nevertheless, participants in our consultations acknowledged that the requirements under the SDA could be unattainable for the adults most affected by this project because of their special needs, coupled with the complexity of the RDSP as a financial investment vehicle. Consequently, beneficiaries may be unable to personally designate a plan holder, leaving an application for guardianship as their sole option to establish an RDSP. 


2.     Exigencies of Applying for Guardianship Are Disproportionate to Naming a Plan Holder

In Ontario, all adults are presumed to be capable of making decisions for themselves.[95] Guardianship is an avenue of last resort that is reserved for circumstances where adults’ informal supports cannot meet their needs, they do not have or are not capable of granting a POA, or they have a POA that is inadequate. Only adults who are found to be legally incapable of property management by prescribed professionals are subject to guardianship, and the Superior Court of Justice has found that “mental capacity exists if the [person] is able to carry out her decisions with the help of others”.[96] Indeed, the SDA prohibits courts from appointing a guardian where an “alternative course of action” meets an adult’s needs in a manner that does not require a finding of incapacity and “is less restrictive of the person’s decision-making rights”.[97] 

The target users of the streamlined process that the LCO has recommended in this project are adults who do not currently have an attorney or guardian to act as their plan holder. Many of these adults manage their finances with a degree of self-sufficiency, such as everyday banking, or benefit from supports at home and in networks of friends and service providers. For example, participants in the LCO’s focus groups included adults with disability who work with an ODSP trustee to manage their payments. Families also described private financial planning tools, such as Henson trusts. Combining such innovative mechanisms in creative ways, we were told, has meant that adults may never have encountered a situation that demanded the formal arrangement of guardianship, before attempting to access the RDSP.[98] 

The RDSP poses a dilemma for these persons. As the joint written submissions to the LCO from the Canadian Association for Community Living, Community Living Ontario and PooranLaw explain,

The impediment created by the contractual competence/legal authorization requirements for opening [an RDSP] has been frequently cited by parents as a barrier that prevents them from opening a plan for their family members with intellectual disabilities. These parents are caught between their desire to assure the future financial security of their son or daughter, and the stigma, and restriction of basic rights to liberty, they know comes with formally placing their son or daughter under a substitute decision-making or guardianship order.[99]


Determining an Adult’s Capacity

Participants expressed different reasons for their apprehensions about guardianship. The reason cited by the CACL, CLO, PooranLaw