A.    The LCO’s Project on Capacity of Adults with Mental Disabilities and the Federal RDSP 

The Registered Disability Savings Plan (RDSP) is a savings vehicle created by the federal government to assist persons with disabilities with long-term financial security. Similar to other registered savings plans, RDSP beneficiaries may benefit from private contributions, government grants and bonds, investment income and special tax rules. Participating financial institutions, such as banks and credit unions, offer the RSDP to eligible members of the public alongside mainstream investment services.[1]

Nevertheless, the RDSP is distinct from other registered savings plans: it was designed as a social benefit for persons with disabilities, including adults whose mental disabilities may affect their capacity for financial management. Under the Income Tax Act (ITA), parents or guardians can open an RDSP and decide the plan terms for a child.[2] Beneficiaries who have reached the age of majority may also do so themselves. However, where an adult is not “contractually competent to enter into a disability savings plan” with a financial institution, a “qualifying person” must do so on his or her behalf.[3] A “qualifying person” can be “a guardian, tutor, curator” or a person “that is legal authorized to act on behalf of the beneficiary”.[4] In Ontario, qualifying persons include substitute decision-makers, such as guardians and attorneys for property, who can be appointed under the Substitute Decisions Act, 1992 (SDA).[5] 

In 2011, the federal government undertook a review of the RDSP program. During that review, adults and their families voiced concerns to the federal government with respect to existing processes within provincial and territorial jurisdictions to designate a qualifying person for the RDSP. As the federal government reported in the Economic Action Plan 2012, many of these processes require “the individual to be declared legally incompetent and have someone else named as their legal guardian”.[6] Specific concerns included that such processes “can involve a considerable amount of time and expense” and “may have significant repercussions for the individual”.[7]   

The federal government has put in place a process to address this issue under the ITA by permitting an adult’s parent, spouse or common-law partner to act as a qualifying person where, in a financial institution’s opinion, the beneficiary’s capacity to enter into a contract to open an RDSP “is in doubt”.[8] An adult or other interested person could initiate the process to appoint a qualifying person, if he or she believes that an adult has diminished capacity to enter into a contract with a financial institution.

However, this process is only temporary and does not address related issues of how RDSP funds are managed once they have been paid out of the RDSP. In the Economic Action Plan 2012, the federal government stated that questions of legal representation for the RDSP are a matter of provincial and territorial responsibility. It suggested that the provinces and territories develop “more appropriate, long-term solutions to address RDSP legal representation issues”.[9] It also encouraged some provinces and territories, including Ontario, to “examine whether streamlined processes would be suitable for their jurisdiction”.[10]

Acknowledging this challenge, the Government of Ontario has requested that the LCO undertake a review of how adults with mental disabilities might be better enabled to participate in the RDSP.[11]  The LCO Board of Governors approved the project in April 2013. The purpose of the project is to recommend a process to establish a legal representative for RDSP beneficiaries that is an accessible alternative to Ontario’s current framework to appoint a guardian or attorney for property. 

B.    About the Discussion Paper

1.     Purpose and Next Steps

The purpose of this discussion paper is to synthesize the results of research and consultations that the LCO has completed to date, and to identify several broad options for reform. Based on the responses to this discussion paper and on the LCO’s further research, the LCO will prepare a Final Report with detailed recommendations.

The discussion paper reviews Ontario’s current framework under the Substitute Decisions Act, 1992 in light of the challenges that RDSP beneficiaries, their families and other interested parties have identified. In seeking to address those challenges, the LCO has analyzed a range of alternative processes that are available in Ontario and other jurisdictions. 

The focus is on key issues for reform that fit within the narrow scope of this project. Debates on legislative frameworks for defining capacity and on forms of legal representation are abundant. However, the RDSP involves decision-making that is issue-specific, and 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.[12] For more information on that project, you are invited to visit the LCO’s website at www.lco-cdo.org. 

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 in that process identified a number of areas for reform. In response, the federal government amended elements of the RDSP. These changes, and others that may not have been made, are still fresh in the minds of stakeholders. However, the LCO’s project cannot address all of the issues that may impede access to the RDSP, and is limited to recommending a process to establish a legal representative for beneficiaries who have diminished capacity to make decisions on the RDSP. 


2.     Terminology Used in the Discussion Paper 

For the purposes of this discussion paper, the LCO has defined certain terminology that will be commonly used throughout, as indicated below.

“Adults with Mental Disabilities:” The LCO uses the term “adults with mental disabilities” to identify the individuals most directly affected by the subject matter of the project.[13] This term is to be given a broad definition that includes adults with mental disabilities who experience significant challenges in making or executing decisions that are essential to the operation of the RDSP. Because this project concerns the establishment of a legal representative, we presume that it primarily impacts adults with mental disabilities who do not have a guardian or attorney for property management.[14]

“RDSP Beneficiary” or “Beneficiary:” Eligibility to be an RDSP beneficiary requires that a person has a “severe and prolonged impairment in physical or mental functions” as defined in the ITA.[15]  The LCO’s project focuses only on those eligible RDSP beneficiaries who have a mental disability, as defined above, and not a physical disability where it is unaccompanied by a mental disability.  This term is used to denote actual and potential beneficiaries, unless otherwise indicated.

“Legal Representative:” This term is used to denote an individual or organization that is established to act on behalf of, or to assist, a beneficiary in opening an RDSP, deciding plan terms or managing funds that have been paid out of an RDSP, or all of these activities, through a legally valid arrangement. A legal representative could be a statutory or court appointed guardian, a parent who qualifies under the ITA or a person lawfully designated by the beneficiary, among others. Depending on the source of the legal representative’s authority, he or she may be subject to different eligibility criteria, roles and responsibilities. This term is used only to denote a legal representative in the context of the RDSP. It does not include other meanings, such as legal counsel, a voting proxy or a litigation guardian.


C.    Approaches to the Project Process

1.     A Principles-Based Approach

The LCO has adopted a principles-based approach to this project in order to integrate a comprehensive understanding of access to justice into our own process. The LCO’s mandate includes recommending law reform measures to enhance the relevance, effectiveness and accessibility of the law, and to improve the administration of justice through clarification and simplification of the law. Therefore, the LCO’s mandate includes seeking to increase access to justice. 

There is no one definition of access to justice. It is often equated with access to courts and tribunals, which may be hindered by barriers of complexity, delay and costs.[16] This conception of access to justice is important and it is relevant to this project insofar as our goal is to recommend alternatives to existing court and administrative processes, which have been prohibitively cumbersome and costly. 

However, access to justice also includes “substantive conceptions of social justice” and implicates other “sites where the law is created, contested, and dispensed”.[17] Where these sites are located depends on the contextual circumstances of persons who are affected by barriers of various kinds. For example, a person with a physical disability may be impeded from taking a bus, where his or her abilities have not been taken into account in designing the vehicle’s entrance. Another person may be unable to apply for pension benefits because the information provided is not in plain language.

The LCO recognizes that “[a] more comprehensive understanding of access to justice goes beyond the legal system to encompass efforts to assess and respond to ways in which law impedes or promotes economic or social justice”.[18] In the context of this project, improving access to justice will involve articulating what we mean by the concept of justice in addition to the role of the law in creating access.[19] Not only will the options for reform address procedural efficiencies but also substantive concepts of capacity and the rights of persons with mental disabilities. 

For this purpose, the LCO has drawn on work in two prior projects in which it has released final reports, its Framework for the Law as it Affects Older Adults and its Framework for the Law as it Affects Persons with Disabilities.[20] 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.[21] The “Framework Principles” are directly relevant to issues of capacity and access to the RDSP for adults with mental disabilities. They recognize autonomy and independence and the right to live in safety, which have underpinned much of the debate in this area of the law. They also include other principles, which have significantly shaped the LCO’s analysis, including participation and inclusion, diversity in human abilities and dignity and worth. A full list of the Framework Principles is provided at Appendix B.

2.     Benchmarks for Reform

The LCO has articulated benchmarks or evaluative criteria based on objectives that the options for reform must meet to be effective. The LCO’s Framework Principles can be applied to a broad range of laws, policies and practices that affect persons with disabilities and older adults. In the course of the LCO’s preliminary consultations, we learned from RDSP beneficiaries, advocacy organizations and other interested parties that they have goals for reform that are specific to this area of the law. Additionally, there are existing sources of law and policy that are directly relevant to issues of capacity and legal representation for RDSP beneficiaries, which shape and constrain the options for reform. These include the policy objectives underlying the RDSP as well as the commitments that Ontario has made to persons with mental disabilities. Ontario’s commitments are located in government supports and services, and foundational documents, such as the Canadian Charter of Rights and Freedoms[22] and Convention on the Rights of Persons with Disabilities.[23] The benchmarks connect these sources to create an analytical framework that is tailored to the subject matter of this project. They are intended to be flexible enough to evaluate the full range of options. 

You are invited to consult the following sections in the discussion paper for more information on the sources from which the benchmarks were derived: 

  • Appendix B: The LCO’s Framework Principles
  • RDSP Policy Objectives: Poverty Alleviation, Contribution and Autonomy (Chapter II.A.2)
  • What is Capacity? Foundational Concepts and Tensions (Chapter II.B.3)
  • Goals for Reform Identified by Stakeholders (Chapter III.D), and
  • Ontario’s Commitments to Persons with Mental Disabilities (Chapter IV)

The LCO has used the benchmarks, first, as a filter through which to consider the myriad ways in which legal representatives are established in various sectors in Canada and abroad. Individuals can authorize another to interact with third parties on their behalves in many circumstances. This is quite common when government services are concerned. For instance, taxpayers can consent to the Canada Revenue Agency (CRA) dealing with another person on their behalf for income tax matters.[24] As discussed below, the Human Rights Tribunal of Ontario (HRTO) also allows claimants to consent to an applicant assisting with his or her claim. 

Despite the existence of a variety of processes, they do not always arise in contexts that are analogous to the RDSP or, on their face, they do not adequately respond to the objectives for reform. For example, a streamlined process to establish a guardian with plenary powers over an RDSP beneficiary’s finances would not respond, prima facie, to the policy objectives underlying the RDSP or the goals identified by stakeholders. Beneficiaries may not have a need for formal assistance with their finances outside of the RDSP and their self-determination in making decisions for themselves in these areas should be protected, as much as possible. Likewise, arrangements that are contingent on publicly funded support workers who provide adults with decision-making assistance in the tasks of daily living will not be considered because they are not economically viable at present in Ontario. The use of benchmarks has assisted us in differentiating alternatives that deserve attention in this discussion paper from those that do not. We also use the benchmarks to assess the options for reform that are promising. 

An effective process to establish a legal representative for RDSP beneficiaries would meet the following benchmarks:

Responds 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 a legal representative’s authority should be tailored to meet a beneficiary’s need for assistance. 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. 

Promotes 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 legal representative should be respected. 

Ensures 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 formal arrangements to assist adults with diminished capacity can also increase their vulnerability. 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. 

Achieves 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 mental 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. 

Provides Certainty to 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 a legal representative. 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. 

We welcome comments on the identification of the benchmarks and on how they are being applied. 

3.     Research and Consultations

This discussion paper was drafted following considerable research and consultations, which began in May 2013. The consultations consisted of a series of in-person and telephone interviews with individuals and organizations representing a wide range of perspectives. Research for the project has been conducted internally; however, it has benefited from the LCO’s past commissioned research papers, and may benefit from those that are ongoing in the Legal Capacity, Decision-Making and Guardianship project. A list of organizations and individuals consulted, and LCO commissioned research, is found at Appendix A, Organizations and Individuals Contributing to the Project. 

In June 2013, the LCO formed an ad hoc project Advisory Group. Advisory Group members include representatives of government from Ontario and British Columbia, from the federal government, financial institutions, the private bar, legal clinics, community advocacy organizations and a research institute. The purpose of the Advisory Group is to provide the LCO with advice on public consultations and the substance of the project. The Advisory Group has provided the LCO with expert input on the structure and content of this discussion paper. The LCO is very grateful for the Advisory Group members’ commitment. 

Public input is an essential part of this reform process. The LCO is proactively soliciting input from key stakeholders in the context of organized consultations. The LCO also encourages comments or submissions that address issues raised in the project and the options for reform. More information on how to be part of the consultation process is included in the final Chapter. 


D.   Structure of the Discussion Paper

As mentioned above, this discussion paper reviews the challenges posed by Ontario’s current framework to establish a legal representative for RDSP beneficiaries and presents options for reform. Following this Introduction, Chapters II to IV consider the challenges that Ontarians with diminished capacity have experienced in attempting to access the RDSP. Chapter II provides essential background on the history of the RDSP, and its content and administration. It considers the diversity of RDSP beneficiaries and how they come to know about, or seek access to, the RDSP through discrete entry points. Chapter II also explains how issues of capacity have acted as a barrier to RDSP uptake by exploring basic concepts of capacity. Chapter III reviews Ontario’s current legislative framework under the SDA, including the challenges and goals for reform identified by stakeholders. Chapter IV discusses Ontario’s commitments to persons with mental disabilities, which affect the need for, and recommendation of, reforms. 

Chapter V is concerned with developing options for reform. It focuses on several key issues that must be decided in developing an alternative process, such as the choice of arrangements to establish a legal representative and safeguards against financial abuse. Each of those key issues is considered through a critical review of alternative approaches adopted in Canada and abroad. Figure 2 presents the options for reform in the choice of arrangements to establish a legal representative for RDSP beneficiaries, which is the core issue for this project. We invite you to use it as a visual aid throughout the review of the discussion paper. Figure 2, Options for Reform in the Choice of Arrangements, is located at pages 90 to 91.

Finally, Chapter VI brings together all of the options for reform identified in previous discussion paper chapters. It presents a comprehensive summary of those options, including if and how different options can be combined as well as implications for implementation. 

Many of the sections contained in this discussion paper end with enumerated questions for discussion, such as the one found immediately below. A complete list of these questions is located at Appendix C, Questions for Discussion.  



1.     Do the benchmarks for reform accurately reflect the objectives that the options for reform in this project must meet to be effective?



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