The Seven Per Cent Solution
by Kenneth Walton

As I travel around the province in my role as President, I have become convinced that were I running for elected office, and were the voters lawyers, I would win in a landslide if I promised to eliminate the PST tax on legal fees.

Last summer the 14 largest law firms in Vancouver sent a letter to the responsible Minister pointing out the flaws in the tax including the (unprovable) thought that sophisticated clients could avoid it altogether by having B.C. legal work done in non-tax jurisdictions as Ontario or Alberta. The reply said in so many words that the government did not believe this. We know anecdotally that this happens frequently.

We are the only profession singled out to collect this tax. The tax remains despite the fact that last July the Finance Minister announced a four point one billion dollar surplus, and around the end of December oil and gas revenues were said to be one billion dollars greater than expected. Our government appears to be very well funded, if not awash in cash.

For five consecutive years CBABC presidents have appeared before the legislative committee that annually examines and makes recommendations on tax policy. The last legislative committee’s recommendation was not to eliminate the tax, but rather, to apply it to legal aid funding. The Canadian Bar Association, B.C. Branch and the Trial Lawyers Association of B.C. have both passed resolutions that the tax be eliminated regardless of the justification touted for its imposition. The CBABC position remains that legal aid funding is the responsibility of the taxpayers as a whole and not the special funding preserve of citizens who must use legal services.

My view is that on this issue our profession is regarded as a de-clawed, toothless tiger that, at best, can only give the political people a bad gumming.

So, what more can we do?

I have a suggestion. Very soon political parties will ask you for contributions, toward the May, 2009 provincial election. Lawyers are a favourite target group for such requests.

My contribution will be accompanied by a letter advising that it is seven per cent less than it would have been had the provincial sales tax on legal fees not been in existence.

I will advise my party that come 2013 election, if the provincial sales tax on legal fees still exists, my contribution will not be seven per cent less, but will be 100 per cent less.

If we all do that, it probably will not mean much in terms of reduced dollars to a particular candidate in the 2009 election. On the other hand, your candidate may become aware of this issue by that simple act (most MLAs seem unaware of it).

I intend to make sure my candidate knows the reason for my reduced contribution by speaking to the candidate. I will do that, as I am told, usually the person collecting political contributions does not pass such information on to the candidate.

It is up to our profession to keep this issue in the forefront before those good women and men we elect. It’s an important issue to most of our clients whether they realize it or not.

I wish you success in your personal and practice life.

This article was published in the February 2008 issue of BarTalk and is subject to the copyright by the British Columbia Branch of the Canadian Bar Association, 2008, all rights reserved.