The Canadian Bar Association British Columbia

The Canadian Bar Association British Columbia

February 19, 2008 19:29 ET

Canadian Bar Association, British Columbia: Punitive Tax Remains in 2008/09 Budget

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 19, 2008) - The Canadian Bar Association, British Columbia (CBABC), responding to the provincial budget released today, expressed disappointment that the discriminatory 7% tax on legal services has not been eliminated, despite continued calls for its removal from the CBABC, business and community groups. The tax is a financial barrier to individuals and businesses and a drag on B.C.'s competitiveness, yet the Government persists in collecting it.

"Individuals and businesses in B.C. are targeted to pay extra money to gain access to justice," said Ken Walton, CBABC President. "The legal system is a key pillar of a strong society and economy, and requires adequate public funding to work well, no less than the health and education sectors. In a province with high numbers of unrepresented litigants in courts, it offensive that this financial barrier continues to exist."

"Maintaining the tax is not only regressive, it is also inconsistent with the government's objective of creating a more competitive business and tax environment in B.C. Elected and unelected officials, business groups, and social activists have all condemned the tax as a damaging anomaly in tax policy. It is time for the government to respond with tax policy that is rational and sustainable," said Walton. "This budget introduces important spending commitments in the areas of justice, but ignores the need to eliminate the damaging tax on legal services that B.C.'s businesses and families continue to pay."

A tax on legal services was introduced in 1992. Legal services are the only professional services in B.C. where a provincial tax is applied, and B.C. is the only province that targets only legal services users among all professional services. A 2005 study by respected B.C. economist Roslyn Kunin found that the PST on legal services is "regressive" and "inefficient" 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.

"Today we are eliminating the tax on financial institutions and eliminating PST on a variety of items and services. Now is the time to eliminate the tax on legal services," said Walton.

The Canadian Bar Association is the professional organization representing more than 35,000 lawyers, judges and law students in Canada, including 6,100 members in British Columbia.

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