FOR IMMEDIATE RELEASE
FEBRUARY 21, 2006
VICTORIA, BC – The Canadian Bar Association BC Branch (CBABC), responding to the provincial budget, expressed disappointment that the government failed to remove the 7% tax on legal services. Despite the recent ruling of the British Columbia Court of Appeal that the tax is unconstitutional in many cases, and growing evidence that the tax is a drag on the economy, the Government persists in collecting it.
The tax on legal services was introduced in 1992. Legal services are the only professional services in B.C. that are subject to a provincial tax. A recent study by respected B.C. economist Dr. Roslyn Kunin, found that the tax on legal services is “regressive” and “inefficient” for the economy as it increases the cost of doing business in B.C. relative to other jurisdictions – namely Alberta and Ontario – where no tax is applied to legal services.
A recent British Columbia Court of Appeal decision declared the tax unconstitutional with respect to legal services related to the determination of rights and obligations by courts of law or independent administrative tribunals. There is disagreement about the scope of the application of this decision, and this has resulted in increased uncertainty and confusion in the administration of the tax.
“With provincial budget surpluses projected, businesses and individuals have been anticipating that this would be the time to repeal this unfair tax,” said Ken Walton, Secretary-Treasurer of the CBABC. He added, “Maintaining the tax is inconsistent with the government’s objective of creating a more competitive business and tax environment in B.C., and ignores a finding by the courts that the tax is an impediment to accessing justice.”
“This budget is especially disappointing after recommendations to address the tax were made by the Select Standing Committee on Finance and Government Services in its 2006 budget consultations report. MLAs, economists, business groups and the courts have all said that this is a bad tax.” said Mr. Walton. “It is time for the Government of BC to respond in the interest of BC’s businesses and the public and remove the tax on legal services.”
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About the Canadian Bar Association: The Canadian Bar Association is the professional organization responsible for representing the interests of lawyers, representing more than 36,000 members across Canada and more than 6,000 lawyers in British Columbia.
For further information: please contact:
CBABC Associate Executive Director