I.        Introduction

The Ontario government has requested that the Law Commission of Ontario (LCO) undertake a review of how adults with mental disabilities might be better enabled to participate in the Registered Disability Savings Plan (RDSP). The LCO Board of Governors approved this project on Capacity of Adults with Mental Disabilities and the Federal RDSP in April 2013. The Ontario government announced its request and the LCO’s agreement to undertake the project in the 2013 Ontario Budget, A Prosperous and Fair Ontario, in May 2013. 

Persons with disabilities tend to experience a lower standard of living than other Canadians due to factors such as barriers in the labour force and unmet needs for supports. The RDSP is a savings vehicle created by the federal government to assist persons with disabilities with long-term financial security. Financial institutions offer RDSPs to eligible members of the public. Beneficiaries and their family and friends can make private contributions to an RDSP. Beneficiaries can also receive government grants to match contributions and those with a low income may be eligible for government bonds.  

The RDSP has distinctive policy objectives that include poverty alleviation, encouraging self-sufficiency and promoting the active involvement of persons with disabilities in making decisions that affect them. Under the Income Tax Act (ITA), adults can establish an RDSP for themselves and decide the plan terms as the “plan holder”. The ITA provides that where an adult is not “contractually competent to enter into a disability savings plan” with a financial institution, another “qualifying person” must act as a plan holder on his or her behalf. 

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 has diminished capacity and wish to appoint a qualifying person before approaching a financial institution. 

However, adults and their families have expressed concerns to the federal government with respect to provincial and territorial laws that govern how a qualifying person can be appointed. Many of these laws require that an adult be declared legally incapable and receive assistance from a guardian. This process can be expensive, time consuming and have significant repercussions for an adult’s well-being. In Ontario, qualifying persons include guardians and attorneys for property, who can be appointed under the Substitute Decisions Act, 1992 (SDA). 

The Government of Ontario has recognized these concerns and has requested that the LCO undertake a review of how adults with mental disabilities might be better enabled to participate in the RDSP. The LCO’s project will recommend a process to establish a legal representative for RDSP beneficiaries that creates a streamlined alternative to Ontario’s current framework. 

The purpose of this discussion paper is to synthesize the results of our preliminary research and consultations, and to identify several options for reform. Responses that we receive to this discussion paper will be considered for a Final Report with detailed recommendations. 

The discussion paper identifies nine options for reform. The options draw on our review of Ontario’s framework under the SDA as well as other laws in Canada and abroad. They incorporate elements of existing laws that could meet evaluative criteria – or benchmarks – that the LCO has developed. We propose that an effective alternative process for Ontario would meet the following benchmarks:  

  1. Responds to Individual Needs for RDSP Decision-Making
  2. Promotes Meaningful Inclusion in the Decision-Making Process
  3. Ensures that Necessary Protections for RDSP Beneficiaries are in Place
  4. Achieves Administrative Feasibility, Cost-Effectiveness and Ease of Use
  5. Provides Certainty to Legal Representatives and Third Parties

The options for reform are summarized further below in the Executive Summary. In total, we have proposed nine options that could be administered through the following overall types of processes to appoint a legal representative. We welcome comments on these types of appointment processes and the specific options for reform.

The options for reform in this discussion paper are a tailored response to the specific context of the RDSP. The LCO has reserved more comprehensive analysis of Ontario’s decision-making laws to its ongoing, multi-year project on Legal Capacity, Decision-Making and Guardianship. Our project concerning the RDSP is being delivered separately, on a priority basis, and it should not be construed as precluding any options in our larger project. For more information on the LCO’s project on Legal Capacity, Decision-Making and Guardianship, please visit the LCO’s website at www.lco-cdo.org.

 

II.      Accessing the RDSP and Issues of Capacity for Ontarians with Mental Disabilities

Chapter II provides an overview of the RDSP and explains the importance of capacity when adults seek to access it. The first section in the chapter reviews contextual information on the RDSP that is relevant to the LCO’s project (Section A, Understanding the Federal RDSP). All persons who are entitled to the Disability Tax Credit (DTC) are eligible to become an RDSP beneficiary, if they are age 59 or under and resident in Canada when the RDSP is opened. RDSP beneficiaries come from diverse circumstances and they include persons with developmental, psychosocial and cognitive disabilities in all age groups. 

The second section of Chapter II presents basic concepts and tensions that are relevant to defining capacity (Section B, The Importance of Capacity When Adults Seek to Access the RDSP). As mentioned above, opening an RDSP requires a p