Tax Fairness for Persons with Disabilities

The attendant care expenses deduction will be replaced by a disability supports deduction for the 2004 and subsequent taxation years. This Budget proposal provides for a broader deduction for disability supports incurred for purposes of employment or education. Certain costs that were eligible for the medical expense tax credit will now qualify instead for the disability supports deduction. The deduction will be based on the current limits for the attendant care deduction, except that the two-thirds factor will not be applied.

The list of eligible disability supports expenses includes sign-language interpretation services, real time captioning services, teletypewriters, electronic speech synthesizers, Braille printers and optical scanners and large-print on-screen devices to allow visually-impaired individuals to read. In addition, where the need is certified by a medical practitioner, the following services or devices will also be eligible: note-taking services for persons with mental or physical impairment; voice recognition software for those with a physical impairment; tutoring services for individuals with a learning disability or a mental impairment; talking textbooks for individuals with a perceptual disability; and attendant care services.

For 2004 and subsequent taxation years, 25% of the amounts that can be claimed as disability supports will be eligible for the refundable medical expense credit.

Caregiver Expenses

The Budget proposes to allow a credit for qualifying medical expenses incurred by an individual in respect of a minor child, without regard to the current "notch provision," which can significantly reduce the claim based on the child's net income. For medical expenses paid on behalf of other dependent relatives (a parent, grandchild, grandparent, brother or sister, uncle or aunt, and niece or nephew), the supporting individual will now be able to make a claim to the extent that they exceed the dependent's normal threshold for medical expenses. The maximum amount which can be claimed is limited to $5,000 per dependent. These proposed changes will apply to 2004 and subsequent taxation years.

Education Tax Credit

The education tax credit is presently not available to students who pursue post-secondary education which is related to their current employment. The Budget proposes to remove this restriction for 2004 and subsequent taxation years as long as the education costs are not reimbursed by the employer.

Taxpayer-Requested Adjustments

The "Fairness Package" was originally introduced in 1991, applicable to the 1985 and subsequent taxation years, to allow an individual or testamentary trust to request that the Minister of National Revenue accept a late-filed return, late-filed, amended, or revoked elections, or reassess an income tax return beyond the normal reassessment period. It also allows all taxpayers and partnerships to request the waiver or cancellation of penalties or interest. The Budget proposes to limit such requests to any such issues in the previous ten years, commencing for requests made in 2005. Consequently, any requests for taxation years more than ten years ago should be made by December 31, 2004.

Canadian Forces Personnel and Police

The Budget proposes that, for 2004 and subsequent taxation years, a deduction be available to members of the Canadian Forces or a Canadian police force for employment income earned in a high-risk military or police mission outside Canada. In order to qualify the individuals must be eligible for a risk allowance at level three or higher. This proposal will exempt such employment income from tax up to the maximum rate of pay earned by a non-commissioned officer (approximately $6,000 per month).

Mineral Exploration Tax Credit

Individuals can claim a 15% tax credit for investments in flow-through shares of companies engaged in certain mineral exploration. This tax credit has been extended for another year to the end of 2005.