By Jean Sorensen for Canadian Lawyer Magazine
The first full budget handed down by British Columbia’s New Democratic Party will provide much needed injections of funds to the province’s ailing legal community, but at the same time it draws blood from larger corporations and the real estate industry with new tax levies.
The B.C. government budget announcement provides increased investments in the justice sector for the next three years. Allocations include nearly $4.8 million in additional annual funding for legal aid, with a focus on indigenous and family law services; $3.8 million per year to fund expansion of Parents Legal Centres; $5 million more per year for sheriff services and court staff to help reduce delays in the court system; and an additional $3.3 million annually for government initiatives related to family dispute resolution services and increasing digital access to justice services.
“These are material increases in funding that will improve access to justice for many within the province, including those in indigenous, rural and remote communities,” said Bill Veenstra, president of the Canadian Bar Association, BC Branch.
However Veenstra said more funding is needed and the allocation is only one quarter of what is really required. He also expressed concern over the lack of increase to the rate paid to lawyers offering legal aid services.
“The current tariff has increased just once since 1991,” he said. “As a result, we are seeing fewer and fewer lawyers willing and financially able to perform this important work.”
Shawn Mitchell, chief executive officer for the Trial Lawyers Association of B.C., is also unhappy with the fact that the B.C. budget didn't allow for such a tariff increase.
“While the budget touched on the financial commitment to legal aid, it didn't go far enough in meeting the financial shortfall,” he says, adding it is important to have good legal representation in the system. His organization is also unhappy with the B.C. government's budget proposal which would cap payouts on minor injuries in accidents. Mitchell says the TLA would rather see higher levies imposed on drivers who cause accidents.
B.C.'s Legal Services Society is looking at almost $13 million in new budget funding for the start of its April 2018 fiscal year, says chief executive officer Mark Benton. The additional funding not only includes additional legal aid funding but also $26 million allocated for indigenous and family services that the LSS is involved with as well as the Parent Legal Centres it operates — one in Vancouver and a second newly opened in Surrey.
“This is the largest funding increase since 2002 (when government cut 40 per cent of its funding) and nearly 12 per cent [LSS] budget increase,” said Benton, although some dollars flow through the federal government. "The new funding will allow us to offer a wider range of service and more support for individuals and it is a welcomed increase that will make a difference in people’s lives."
The additional funding will allow LSS to expand its representation of individuals in criminal cases, provide more Gladue Reports, provide representation to grandparents in child protection cases and support and training for defence lawyers and elders participating in First Nations Courts.
While the LSS is not able to increase the legal aid lawyer's tariff, it is working to raise the ceiling on the hours that a lawyer can put into a file.
"We know that these lawyers are often working more hours than they are paid for," Benton says.
The Law Society of B.C. sees the allocations as enhancing access to justice.
“Appropriate legal aid funding is a significant measure, among others, that will reduce the number of people representing themselves and provide greater access to justice for families and First Nations in the province. The Law Society will continue working with the Attorney General to address adequate funding for legal aid and other measures to improve British Columbians’ access to legal services,” said Law Society of B.C. president Miriam Kresivo.
The NDP budget also takes more shots at deflating B.C.’s pumped real estate market and foreign buyers with its measures outlined in a 34-page online document entitled "Homes for B.C. A 30 Point Plan for Housing Affordability in B.C."
The BC Real Estate Association has issued a press release on the areas it sees as concerns. They include the increase of the property transfer tax from 3 per cent to 5 per cent on homes valued over $3 million, the increase of the foreign buyers tax from 15 per cent to 20 per cent, and expansion of the FBT to other parts of B.C. rather than Vancouver. New areas affected by the FBT after February 21 include the Victoria regional district, Metro Vancouver, Fraser Valley Regional District, Nanaimo Regional District and the Central Okanagan Regional District, and a speculator's tax which is being introduced this fall on all property owned by foreign and domestic entities that do not pay taxes in B.C.
B.C. real estate lawyer Tony Spagnuolo, who has 18 business offices throughout B.C. and in areas affected, says the new measures to cool the real estate market are "death by a thousand cuts."
Individually, each one would have marginal effect, but together they are cooling impacting the high-end markets, adding Vancouver has already seen a slowing in that price point.
Spagnuolo also voiced concern regarding speculation tax that will be rolled out in fall 2018 and whether it will impact vacation or secondary properties owned by other Canadians.
The NDP said it will also phase out Medical Service Plan premiums by 2020, but is imposing a new health services tax on all B.C. companies in January 2019 with a payroll over $500,000. It could be bad news for law firms depending on how they are structured.