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Do not let the facts interfere with good story

DTC Tax Costs (updated with 2010 estimates by Department of Finance)

CBC and Toronto Star exaggerate facts to spin so-called scandal about Disability Tax Credit

CBC and The Star falsify tax costs for 'the story' - click for larger graph

In the rush to get a headline, both CBC and The Star have resorted to distorting the facts about companies who help Canadians with disabilities.

When the basic facts in a story are wrong, how can we rely on the rest of the story for balanced reporting?

The truth behind the Disability Tax Credit is the real scandal.

“Disability Tax Credit recipients represented only around 30 to 40 percent of the potential target group,” says the Caledon Institute.

The forms and procedures are so complex that Canada Revenue has erected a wall keeping up to 70% of the people who deserve the tax credit from receiving it.

The firms who help people get past the bureaucracy might irritate Canada Revenue but they are essential to Canadians with disabilities.

I couldn’t imagine how the Disability Tax Credit got first story billing on CBC’s National News last night but there it was – the month-old yellow journalism back for another kick at the cat.

Someday I hope to see less negative bias against Canadians with disabilities other than the media stereotypes of shirkers or “special” athletes.

One good thing – more people will know about the DTC and where to find help.

Complex rules and Canada Revenue attitude

To obtain the DTC, the person with a disability has to get the 12 page T2201 form. They have to understand the confusing and complicated tax rules on the form.

Then they need an appointment with a doctor, at their cost, and get the doctor to fill out the form properly. Some physicians refuse to fill out the form or have a bias against the DTC.

If the doctor makes a mistake, the form will be rejected by Canada Revenue and the DTC denied.

Once denied, the taxpayer will be red-flagged by Canada Revenue who will demand additional information to approve the form. Second opinions only raise more red flags.

Most people with severe disabilities don’t have the accounting and legal skills to pursue their rights and drop the claim.

CBC and The Star imply it is easy to get the DTC. “I’m not a well-educated man at all. This process of getting the disability tax credit is so simple,” John Morse told The Star.

If it’s so easy, why are 60% to 70% of people not getting the tax credit.

I’ve helped people get the DTC on a volunteer basis. The form and process is tricky, despite 1o years of professional experience advising people about Income Tax.

Exaggerating costs is bad journalism

On January 11th, 2011, CBC reported that people with disabilities and companies that help them, such as National Benefit Authority, were cheating the tax man. The cost according to CBC was $5.9 billion in 2009.

The Star reported the story the same day but had a slightly lower cost of $4.88 billion out of taxpayer’s pockets.

Those inflated numbers were wrapped around a story accusing National Benefit Authority of sending in fraudulent claims for the Disability Tax Credit.

Put two and two together and there’s a big scandal in the story.

The facts are not even close to the exaggerations in the media.

The actual cost of the DTC was $415 465 million in 2009, according to the Department of Finance published Tax Expenditures. (Revised story with 2010 estimates recently published. The 2009 number was $415 million.)

DTC Tax Costs (updated with 2010 estimates by Department of Finance)

CBC and The Star knew the facts

When the story first appeared in January, I sent CBC and The Star emails with links to the actual Department of Finance tax cost of the DTC.

Their numbers were wildly inflated. I asked them to correct their stories.

Both The Star and CBC did correct the billion $ numbers in the second pass but still inflated the tax cost by 50%.

The Star and CBC also reported taxpayer costs were going up when Finance said they went down in 2009.

“The information in the story was provided by the Canada Revenue Agency and attributed to the CRA,” replied Esther Enkins  Executive Editor CBC News in an email.

“The CRA has now clarified that information saying that the amount claimed for the disability tax credit is close to $6 billion a year. It has also said that the amount credited or refunded under the DTC is closer to $700 million a year.”

Enkins and her staff did not follow up the actual estimates published by the Department of Finance. The cost of $415 million was verified independently by Caledon Institute, acknowledged experts on social policy and research. (since writing Finance updated 2009 to $465 million.)

“I reported on the amount claimed (this does not mean refunded – the CRA stats do not distinguish how much of those credits are refunded retroactively and how much are used to reduce taxable income),” replied Star reporter Chloe Fedio.

“I did not mean to suggest that the $4.88 billion is coming out of taxpayers’ pockets. I simply meant to demonstrate the increase in claims over the past 8 years – something the CRA suggested in their audit of the Ptach Society was related to the disability tax service industry,” Fedio added.

Wrong again. The actual costs have been relatively steady despite the changes to the rules in 2005.

Canada Revenue program audit

“Those numbers came directly from the CRA,” wrote Fedio. “I’m not sure why they would have sent me incomplete figures.”

Good reporters check their sources and verify claims. If either media outlet had read the Department of Finance or Caledon Institute reports, they should have followed up on the discrepancy.

Sensationalist yellow journalism or just sloppy – you decide. Or have CBC and The Star fallen under the spell of the tax man?

Revenue Canada has it’s own reasons for attacking Canadians with disabilities. Decade long attack against people with disabilities takes new turn

Full disclosure – I have no relationship with National Benefit Authority or any firm who prepares the DTC form for a fee.

Related Stories

Toronto Star – Company cashes in on tax relief for disabled

CBC – Disability tax credit claims probed

Something strange – both stories are closed for commenting. Fedio must think working for the taxman is career enhancing: it’s on her resume. Of course, that’s the real story – journalists need sensationalism to sell papers, glue eyeballs to TV screens.

Tax Expenditures 2009

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