CAPACITY TO EXECUTE A POA
47. (1) A person is capable of giving a power of attorney for personal care if the person,
(a) has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and
(b) appreciates that the person may need to have the proposed attorney make decisions for the person.
(2) A power of attorney for personal care is valid if, at the time it was executed, the grantor was capable of giving it even if the grantor is incapable of personal care.
(3) A person is capable of revoking a power of attorney for personal care if he or she is capable of giving one.
(4) Instructions contained in a power of attorney for personal care with respect to a decision the attorney is authorized to make are valid if, at the time the power of attorney was executed, the grantor had the capacity to make the decision.
There are pitfalls here: the POA may be effective to authorize the named attorney to make decisions for the grantor, but some of the instructions in the document may not be valid if the grantor, at the time of executing it was incapable of giving those instructions. So, there are at least two tests for capacity that have to be considered.
While capacity is always presumed, it is the lawyer’s obligation to be on the alert for persons who may not be capable of executing the document or of giving the instructions contained in it. Capacity is always issue and time specific: a person may be capable at some times and incapable at others, or capable of some decisions but not others. (This also becomes important to the attorneys and health care providers involved in the grantor’s personal care, treatment and admission decisions because the POA may be effective for some decisions but not others—see below.)
The test for capacity to grant a POA is a lesser or easier test than the tests for capacity to execute a Power of Attorney for Property, to execute a will, or to make personal care or treatment decisions. This was intentional on the part of the legislature: a person incapable of making personal care or treatment decisions may nonetheless be capable of deciding who should make those decisions. It is part of the scheme set out in the SDA and The Health Care Consent Act (“HCCA”) for respecting an individual’s dignity and autonomy (as a health practitioner would put it), rights and liberties (as a lawyer would put it).
When the POA expresses wishes about personal care, treatment, admission to a care facility or a personal assistance service, it is incumbent upon the lawyer preparing it to ensure his or her client has the capacity, at the time of executing the POA, to make those decisions. It is therefore incumbent upon the practitioner to know those differing tests for capacity as well as the test for capacity to execute the document itself. The definition of capacity to make personal care decisions is in the SDA. The definition of capacity to make treatment, admission and personal assistance decisions is in the HCCA:
SDA s. 45 A person is incapable of personal care if the person is not able to understand information that is relevant to making a decision concerning his or her own health care, nutrition, shelter, clothing, hygiene or safety, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.
HCCA s. 4(1) A person is capable with respect to a treatment, admission to a care facility or a personal assistance service if the person is able to understand the information that is relevant to making a decision about the treatment, admission or personal assistance service, as the case may be, and able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.
Under HCCA, a health practitioner proposing the treatment, admission or personal assistance service, as the case may be, makes the finding of incapacity. The incapable patient has the right to be advised of the finding and the right to challenge it by application to The Consent and Capacity Board. The treatment, admission or personal assistance service may not be implemented until the Board confirms the finding.
There is virtually no case law assisting practitioners with the definition of capacity to execute a POA or the definition of capacity to make personal care decisions. On the other hand, there are about 500 applications annually to The Consent and Capacity Board to review findings of incapacity to make treatment and admission to care facility decisions, although most of the applications regarding treatment capacity deal with psychiatric inpatients. 
While both SDA and HCCA contain provisions for reviewing findings of incapacity for personal care or to manage property, for reviewing findings of incapacity to make treatment, admission and personal assistance decisions by way of application to the Consent and Capacity Board, there are no such provisions to review a determination that a person is incapable to execute a POA. Consequently, challenges to the validity of a POA based upon the Grantor’s lack of capacity go to Superior Court.
If you have any doubt about your client’s capacity to execute the POA or to include effective instructions, conditions or restrictions in it, it is wise to have an expert health practitioner assess the grantor’s capacity, or to retain a lawyer with expertise in capacity matters to take instructions for Powers of Attorney, prepare them and attend when they are signed. (When I do this for clients of questionable capacity, I always videotape the interviews—with client consent of course.)
Many of the CCB judgments, or “Reasons for Decision” are posted at www.canlii.org