FOR IMMEDIATE RELEASE
FEBRUARY 11, 1999

Every day, our clients pay a 7% tax on our services which was intended to pay for Legal Aid. The Government collects up to $19 million more on that tax than it puts into Legal Aid. This impacts lawyers in three ways:

• The 7% tax adds to the bottom line total that the client pays us, along with disbursements, other expenses and the GST. These costs falsely inflate the amount a client feels has been "paid" to us—and affects their perceptions about the value of our services.

• The Government made us their tax collectors—the only profession to be targeted in this way. This adds an administrative burden to our practice. We were forced to accept that role, but the Government hasn’t kept its part of the deal.

• As advocates, and in keeping with the traditions and spirit of the profession of Law, lawyers have provided pro bono and underpriced Legal Aid services for years. The underfunding of Legal Aid increases the pressure on the profession to "prop up" the existing system—even though we collect and remit more than enough tax money to ensure a good system of legal services for the poor.

For these reasons, the CBA BC Branch is asking all members to consider two simple actions:

• Tell your clients about the provincial tax they are paying and why it is on their bill. We are attaching a sheet with some suggested messages. We encourage you to communicate this to your clients in any way that is convenient for you and consistent with your firm’s culture.

• Send a letter, on letterhead, with each tax remittance to Government, saying that you are "paying under protest". If possible, fax or mail a copy to the Attorney General, the Minister of Finance and/or the Premier every time.

This is a critical issue for every lawyer in BC—each of us is affected by the 7% tax, and by the Government’s expectation that our profession will continue to "fill the gaps" if that money continues to be siphoned away from Legal Aid. It is time for the 9,000 lawyers of BC—and our clients—to be heard.

For more information, contact Mayland McKimm, Chair of the Legal Aid Committee.

Notice to Our Valued Clients
You will notice on your bill for legal services that you are being charged an additional 7 per cent provincial tax. Legal fees are the only professional fees which are subject to a provincial sales tax. This tax was introduced by then-Finance Minister Glen Clark in 1992. Below are actual quotes from Mr. Clark when he introduced the tax in the Legislature.

Last year, this tax generated $81.5 million in revenue for the BC Government, adding to the millions of federal dollars transferred to the Province for legal aid. In total, the BC Government keeps at least $9 million, and probably closer to $19 million more than they allocate to legal aid. That means that a significant portion of the tax you are charged -- introduced to "offset" the costs of legal aid -- is being diverted to other government spending.

If you have any questions about this tax, or you wish to make your views known to Government, please contact your MLA. Enquiry BC can provide you with contact information, at 660.2421 in Vancouver, 387.6121 in Victoria, and 1.800.663.7867 elsewhere in BC.

Hansard - 1st Session, 35th Parliament
From the Introduction of the Social Services Tax, 1992

The Honorable Glen Clark
I think that to the extent we can, it may be desirable to say: "We are raising this tax, and it’s going for this purpose." If people see that and think that the government is acting efficiently and is not wasting their money, and that there will be a re-establishment of support and a willingness to pay for certain services, provided they trust the government is not using their money for other nefarious purposes. . .I realize that’s a big challenge, because people can always point to waste and inefficiency in government and can point to anecdotal evidence of that... In this respect, I guess the question is: is it acceptable to link a tax to a service? I’d say yes.

The Honorable Glen Clark
We chose not to levy a tax on legal billings to actually cover the costs of legal aid. This is just a modest tax relative to the cost of legal billing....