Saturday, November 07, 2009

The HST Tax on Access to Justice

Legal services currently are exempt from Ontario's 8% provincial sales tax.

With the Province now poised to impose a whopping 13% Harmonized Sales Tax (HST) that is targeted to apply to legal fees, Slaw's Edward Prutschi considers the negative implications of this tax on access to justice in the Ontario, and eloquently asks why organizations representing the legal profession remain largely silent:
Starting in July 2010 when Ontario’s GST and PST are replaced by the new Harmonized Sales Tax, virtually everything, including legal bills, will be subject to the new 13% HST... To put it simply, legal bills are going up 8% across the board in every area of law purely to cover the tax consequences.
The implications of this tax grab are dire and far-reaching. Access to Justice is directly threatened by this substantial jump in the cost of legal services. Our courts are already struggling with the costs and burdens associated with an increasing number of self-represented litigants who have been driven to stand alone in court by the crushing burden of high legal fees and expensive court proceedings. The HST will have a direct negative impact on the capacity of individuals to have their cases heard in our Province’s courtrooms. The consequences for civil court cases, spousal support claims and child custody issues are serious indeed, but the devastating impact of this tax will be felt most acutely in my area of practice – criminal law.
...So, while lobbyists put the spit shine on their submissions to government as to why a new car, new home, or mutual fund, ought not to be subject to additional taxation, how is it that we lawyers appear to be entirely silent on a direct attack against the public’s ability to access the justice system in which we toil? Time is running out. The tax man cometh.
Ontario's governments of all stripes have always been good at talking the talk when it comes to access to justice. The HST tax, however, will add hundreds - or even thousands - of dollars to the costs of legal services borne by every Ontarian who is involved in a contested family law or civil litigation proceeding.

It is high time for the Ontario government to walk the access to justice walk.

The public cannot simply cannot afford any new tax on legal services. Period.

Legal services must be exempted from the HST. And as Mr. Prutschi suggests, our Law Society and Bar Associations need to get with that programme - fast.

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