Spring Economic Update Includes Changes to the Disability Tax Credit and other Tax Measures

On Tuesday, the federal government released its Spring Economic Update, and we have compiled some key proposals relevant to people with disabilities. 

Disability Tax Credit 

Changes to DTC Eligibility 

The Disability Tax Credit, currently does much more than just reduce taxes. It is the gateway to other important financial programs, like the Canada Disability Benefit (CDB), the Registered Disability Savings Plan. 

The Spring Economic Update proposes a new a streamlined application process for certain medical conditions. 

The following conditions will qualify based on diagnosis alone: 

• Alzheimer’s disease 
• Amyotrophic lateral sclerosis / Lou Gehrig disease
• Angelman syndrome
• Autism spectrum disorder, level 3
• Bilateral blindness (legally blind)
• Bilateral hearing loss (severe or profound)
• Cardiac functional class of 4/IV or an ejection fraction of 20% or less
• Cerebral palsy (severe)
• Chronic Obstructive Pulmonary Disease, stage III or higher
• Colostomy (permanent)
• Cystic fibrosis
• Dementia
• Down syndrome / Trisomy 21
• Duchenne muscular dystrophy (advanced or severe)
• Edwards syndrome / Trisomy 18
• Hemipelvectomy
• Hemophilia A (severe)
• Hip disarticulation
• Huntington disease
• Ileostomy (permanent)
• Intellectual disability (severe, profound or IQ of 70 or below)
• Lower limb amputation (leg or foot)
• Microcephaly
• Paraplegia
• Parkinson’s disease (advanced or severe)
• Patau syndrome / Trisomy 13
• Phenylketonuria
• Prader Willi syndrome
• Profound hearing loss in one ear and severe hearing loss in the other ear
• Progeria
• Quadriplegia or tetraplegia
• Relies only on lip-reading and / or use sign language to understand conversations or communicate
• Renal (kidney) failure requiring lifelong hemodialysis or peritoneal dialysis
• Requires lifelong continuous supplemental oxygen (O2)
• Schizophrenia
• Sickle cell disease (severe) requiring transfusions
• Sign language is primary means of communicating due to profound hearing loss or expressive aphasia
• Spinal muscular atrophy, type 1 and 2
• Stroke (severe) no functional recovery
• Tay-Sachs disease (infantile/juvenile)
• Total mutism
• Traumatic brain injury (severe)
• Upper limb amputations (trans carpal or higher) 

This means that medical practitioners will no longer need to add descriptive text outlining an applicant’s restrictions unless the CRA asks for more medical information.   

Expanding list of Medical Practitioners: 

The update also proposed to expand the list of practitioners that can support with the application: 

• Occupational therapists will be able to certify eliminating (using the toilet) 
• Physiotherapists can now certify feeding and dressing
• Speech Language Pathologists can now certify feeding or hearing
• Podiatrists will be able to certify walking 

Streamlined Application Process for Those Under the Care of Public Guardians and Trustees 

Provincial/Territorial public guardians, trustees, and curators will be able to certify the DTC for adults under their care for property matters if they already have a document issued by a healthcare professional stating that they do not have decision-making capacity. They will not need to have the DTC recertified by the medical practitioner unless the CRA asks. 

Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada will be able to provide similar certification for adult dependants in their care under the Indian Act. 

These measures are set to apply to DTC certifications from 2027 onwards. 

Additional changes to tax measures to note: 

Home Buyer’s Plan 

Right now, people who want to purchase or build their first home, or a home for a specified disabled person, can withdraw $60,00 from an RRSP without having to pay tax on the withdrawal. 

They will have to repay the money back to the RRSP over 15 years, but the spring update proposes a 5-year grace period before the 15-year window begins. This will be in effect for anyone who withdraws until 2028. 

Labour Mobility Deduction for Tradespeople 

From the 2026 tax year onwards, tradespeople working in the construction industry will be able to claim up to $10,000 (previously $4,000) in relocation expenses if they move at least 120 km closer to their work. 

DABC welcomes the small changes, particularly in relation to the DTC application, that will reduce administrative barriers for those living with long term health conditions, and healthcare barriers for those who struggle to access supportive health services. However, we hope these changes open the door for continued conversation around more meaningful policy reform.

The update has shown that change is possible, but this change must be centred around lived experience.