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 i