Provincial Sales Tax Refund on Legal Fees for Low-Income Persons
In 2003, Dugald Christie, a Vancouver lawyer, challenged the constitutional validity of the provincial sales tax (PST) on legal services under the Social Service Tax Act. After two lower court rulings, the Supreme Court of Canada ruled that the Province of British Columbia has the power to impose PST on legal services. [See British Columbia (Attorney General) v Christie, 2007 SCC 21]
In October 2007, the Consumer Taxation Branch of the Ministry of Small Business and Revenue issued a Notice to Taxpayers regarding the provincial sales tax (PST) on legal services. While waiting for the Supreme Court of Canada ruling, the Province said eligible low-income individuals did not have to pay the PST on legal services. Therefore, if you paid the PST and you meet the eligibility criteria, you will be eligible for a refund.
The Consumer Taxation Branch can also be contacted directly at 604.660.4524 in Vancouver or toll-free at 1.877.388.4440, or by email at CTBTaxQuestions@gov.bc.ca.
[updated November 8, 2007]
CBA Calls on Government to Repeal Tax on Legal Services
On October 3, 2007, the Canadian Bar Association BC Branch presented a submission to the Select Standing Committee on Finance and Government Services recommending the removal of the PST tax on legal services. In the Supreme Court of Canada decision in the Christie case the Court decided that government has a constitutional right to continue to tax legal services. But it did not decide that it is fair, just or wise to do so; that is for the government to decide. Read the submission.
[updated October 24, 2007]
Access to Justice Resolution
At the CBA Canadian Legal Conference at Calgary, Alberta in August 2007, the National Council adopted a resolution put forward on behalf of the late Dugald Christie, calling on all governments in Canada to eliminate taxes on legal services. Dugald Christie, a tireless champion for pro bono legal services, was the recipient of the Branch’s Harry Rankin Q.C. Pro Bono award for 2006. He died tragically on July 31, 2006, while bicycling across Canada on his way to the 2006 Conference at St. John’s, Newfoundland, where he had intended to present his resolution to the Council.
07-01-A - Access to Justice Resolution
[updated August 27, 2007]
Let’s Turn Up the Heat on PST
by Frits Verhoeven, CBABC President, 2006/2007
“…this is one of the most discriminatory taxes we have ever seen.”
The above quote comes from the late Fred Gingell, MLA, at the time the Liberal finance critic, in response to the introduction into the House by the Finance Minister, Glen Clark, on Thursday, April 30, 1992 of amendments to the Social Services Tax Act to impose a provincial sales tax on legal services.
With the dismissal of the Christie case by the Supreme Court of Canada on May 25, 2007, the government has established that it has a constitutional right to continue to tax legal services, whether or not it is fair, just or wise to do so. For our part, the CBABC has decided to continue the campaign to fight this outrageous tax. Read the President's Column.
[Updated August 27, 2007]
CBABC Disappointed that the 2007/08 Budget Failed to Remove Punitive Tax on Legal Services
The Canadian Bar Association, British Columbia (CBABC), responding to the provincial budget released today, expressed disappointment that the government failed to remove the discriminatory 7% tax on legal services. Despite a ruling of the British Columbia Court of Appeal that the tax is unconstitutional in part and growing evidence that the tax is a drag on B.C.'s competitiveness, the Government persists in collecting it. Read the news release.
[updated May 29, 2007]
Canadian Bar Association Calls on Government to Repeal Tax on Legal Services
Responding to today’s Supreme Court of Canada decision in the Christie case, Frits Verhoeven, President of the Canadian Bar Association BC Branch issued the following statement:
“The Christie decision, while disappointing to us, does not change the position of the Canadian Bar Association that the tax on legal services is regressive, discriminatory and harmful. A constitutional right to impose taxation does not excuse bad tax policy. The tax on legal services has resulted in well over $1 billion in extra tax dollars being collected from individuals and businesses in BC who needed to access legal services. It remains an impediment to accessing justice, and to the competitiveness of BC business. Now that the Christie court case has been resolved, the government should repeal the tax immediately.”
Read the news release.
[updated May 25, 2007]
From the President - BarTalk October 2006
Dugald Christie’s Mission
The tragic death of Dugald Christie on July 31, 2006 prompts me to use my first BarTalk column as B.C. Branch President to write about Dugald’s mission in life, access to justice.
In devoting himself to access to justice, especially for the poor, Dugald Christie was truly exceptional. For his work he received CBABC’s Harry Rankin QC Pro Bono award just over a month before he died.
[updated December 12, 2006]
CBABC Calls for PST Elimination in 2007 Budget
Presenting to the Standing Committee on Finance and Government Services, CBABC President Frits Verhoeven called on government to remove the discriminatory and harmful tax on legal services in preparation for the 2007 Budget. See submission and presentation transcript.
[updated November 14, 2006]
Grits profit from the poor
With $115 million at stake, why be honourable?
by Steve Weatherbe, Business Examiner
Time was, the provincial Liberals found the very idea of levying the provincial sales on legal services abhorrent.
That time was when they were in opposition. Now firmly ensconced in government, they have apparently forgotten their earlier position; with $115 million a year collected annually from ordinary citizens using lawyers' services, the government of Gordon Campbell is fighting legal tooth and nail a BC Supreme Court ruling exempting much of those services from the PST...
"It's quite outrageous," said Frits Verhoeven, president of the Canadian Bar Association's British Columbia branch. "We are the only profession singled out for the provincial sales tax. And no one has ever come up with a sensible reason."
Read the full article, including President Verhoeven's comments in support of removing the tax.
[updated September 25, 2006]
Reasons Released in Christie Stay Application
The Court of Appeal of BC issued its Reasons for Judgment in the stay application by the Government of BC in the Christie case. Read the Reasons for Judgment and the second judgment regarding the application of the stay to low income persons. Read the Law Society Notice to the Profession and the Government’s notice.
"It's long past time for the Government to abandon this tax. It is arbitrary and discriminatory, and the courts have said that it is a barrier to access to justice. Economist research shows that it is also a barrier to economic growth. Yet the Government continues to fight to collect this revenue from people who need legal services. There is a serious issue for the court to decide about the constitutionality of the tax. The Canadian Bar Association expects to intervene when this matter goes to the Supreme Court of Canada.” Meg Shaw, Past President, CBA BC Branch
[updated September 11, 2006]
Economist Report Released – Tax on Legal Services is Bad for BC
The CBA BC Branch and BC Chamber of Commerce have jointly called on the Government of BC to eliminate the tax on legal services, in response to the release of a report by noted economist Dr. Rosalyn Kunin that details the negative impact of the tax. Read the news release and Dr. Kunin’s report. Read the President’s unedited Vancouver Sun guest editorial and the CBABC news release in response to Budget 2006.
Christie Supplementary Reasons Released
The Court of Appeal has released Supplementary Reasons in the case of Christie v. Attorney General of BC. The Reasons confirm the draft form of order proposed by counsel for the Attorney General. Read the decision and order.
It’s Time to Remove the Tax on Legal Services!
Read the Christie appeal decision and the Finance and Government Services Committee report that includes a recommendation to review the tax. Read the CBABC submission to the Committee and CBABC’s advocacy ad.
[updated May 11, 2006]
Social Services Tax Update
The current state of affairs with respect to the collection and remittance of SST is unclear. The Christie cross-appeal was successful, however a dispute has arisen with respect to the form of order. Specifically, the dispute arises from whether the decision applies to all legal services or only those services related to the determination of rights and obligations by courts of law or independent administrative tribunals. The Court of Appeal received written submissions on the form of order on January 17, 2006. A decision has not yet been released.
We recognize that there is a great deal of frustration and uncertainty for lawyers in trying to determine the best way to deal with SST billing in the interim. However, there is no clear course of action available until the order has been finalized.
The Ministry of Small Business and Revenue issued a notice on January 12. For details, click here.
The Law Society issued an update on January 13. Read the update.
With the Government of BC facing a budget surplus, the CBA is focused on getting the Social Services Tax on legal services eliminated:
- We presented a submission to the Finance and Management Services Committee in the pre-budget consultation, calling for increased legal aid funding and the elimination of the SST. Read the 2005 submission.
- SST Campaign: we are meeting with every MLA in BC to present the CBA’s position on SST, and meeting with the BC Business Council and other lobby groups to build a coalition of interests to call for removal of SST. Read the backgrounder. See the ad. See a draft letter lawyers can provide clients.
- Media release on Christie decision declaring SST unconstitutional for persons with low income, February 9. Vancouver Sun article.
- Media release in response to Government of BC Budget 2005: see release.
Want to know more? Stay tuned to your CBA Website: www.cba.org/bc.
The CBABC is monitoring this issue closely, and will ensure that members receive more information as it becomes available.
[posted January 25, 2006]