The Working Income Tax Benefit (WITB) and Registered Disability Savings Plan (RDSP):
With the Legislation unveiled, it is time to be heard
By John Stapleton
October 6, 2007

On October 2, 2007 with little fanfare, Finance Minister Jim Flaherty tabled the long expected detailed proposals to enact the Budget proposals first announced on March 19, 2007. There is a standalone set of proposals for the Registered Disability Savings Plan (RDSP) and a separate omnibus bill to enact the details of everything else in Budget 2007. Deep inside this second document (pages 72-77) , one can find the legislation to enact the Working Income Tax Benefit (WITB) and the explanation of the changes 158 pages later ( pages 235-244).

Being heard: The process

Canadians have until October 23, 2007 (nominally until October 31) to respond to each of the two documents.

Here are the coordinates re sending formal comments:
Re: The WITB

Interested parties are invited to provide comments on the draft legislative proposals by writing to: Tax Policy Branch, Department of Finance, 140 O'Connor Street, Ottawa, ON, K1A 0G5,

Re: the RDSP

The address is the same but also send a copy to the Office of Disability Issues, Human Resources and Social Development Canada, 355 North River Road, 12th Floor, Room 033, Ottawa, ON, K1A 0L1 .
Unlike the provincial government that does not consult in this way, federal legislation processes allow a 30 day period for interested parties to get their comments in. Comments can make a real difference in a minority government situation.

My understanding is that members of the committee must review the final changes and also the comments made.

See a full explanation of the legislative review process at:


The RDSP and WITB in context:

Outside of Canada’s two large constitutionally protected programs, CPP and EI, seniors and child benefits have four elements in common as they relate to federal benefits funded by tax dollars:

The introduction of the WITB and RDSP will mean that some low income working age adults will have access, for the first time, to a registered savings plan, matching contributions and income supplements. Accordingly, there is much to like in the two new plans in that they each represent important new tax measures designed to help specific populations of working age adults.


Reading the Fine Print:


Although it provides a maximum tax credit of $500 for single individuals and $1,000 for families, the credit will be reduced by 15 per cent of net income in excess of $9,500 for single individuals and $14,500 for families. It phases out completely at $12,833 for single workers and $21,167 for single parents and couples. The new omnibus bill also stipulates that the WITB will be indexed to the CPI.

But perhaps the most startling fact of all regarding the new program is that it does not provide any benefit to those who work full time at the minimum wage in most of Canada. Couples in Ontario, where both adults work 35 hours a week for minimum wages, net more than the phase-out for couples under the Whitby WITB at $21,167 a year. As a result, they do not qualify for the WITB either.

Similarly, a single person in Ontario working 40 hours a week at $8 an hour nets about $14,700 a year. At 35 hours a week, this same single person still nets more than the $12,833 yearly end point of the WITB. These full-time minimum wage workers will not see a single penny from the new WITB.

These workers are by no means in the minority. According to Statistics Canada, more than 89 per cent of minimum-wage workers are single people while almost 11 per cent are in families with either a spouse or children. So the vast majority of full-time minimum wage workers will not get a cent.

But the WITB is one program that will benefit from a new program called ‘Advantage Canada’ under Budget 2007. This is the program that takes federal surpluses and allocates them proportionally to the federal debt and the lucky program areas that are designated to benefit from the surplus.

With the recently announced projected surplus at $13.8 billion, the amount of money swelling Advantage Canada coffers is not ‘chump change’. Almost $7.0 billion dollars will be notionally allocated to the WITB and other Advantage Canada beneficiaries. The problem is that we don’t yet know the amount nor the formula that will allocate the surplus monies and therefore we cannot yet know whether the WITB will be raised to the point where it becomes anything like the program first announced by Ralph Goodale in his Economic Statement of 2005 in advance of the Martin government’s defeat.


The RDSP is a significant but very complicated tax measure that recognizes that many persons with disabilities are outliving their parents and creates a tax sheltered registered fund that allows parents to significantly contribute to the future well-being of their children throughout their adult years. It holds enormous promise.

It is a far-reaching measure that requires close study and I will not attempt to do it justice here. Rather, I would like to make a few contextual comments.

The first is that the RDSP vehicle, although intended as a way for parents and relatives to contribute to the lifelong income security of their children who have disabilities, it may be the case that governments and philanthropies may wish to assist low income parents who do not have the funds to take advantage of the RDSP vehicle. It is not immediately clear that how this alternative funding may be accommodated or encouraged.

Secondly, it appears that the RDSP, unlike the WITB, does not benefit from the Advantage Canada designation and as a result would not automatically obtain Budgetary surplus funds if further funding is required.

Third, given that the RDSP is the only registered instrument specifically designed to help assist people in the years before they become senior citizens (RRSP and RESP’s are very limited in this regard), the success of the RDSP would provide hope to those who would like to see a broader based registered instrument (and matching contributions) for low income families.



The Budget bills are important and they deserve discussion and comment. A very small window has been created to allow Canadians to respond. Download the Budget documents and the explanations. Read them carefully and make a submission by October 23, 2007. It is a unique opportunity for your voice to be heard by Members of Parliament, their staff and by the Public Service.


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