The Power of Perspectives

The Canadian Bar Association

Justin Ling

Budget 2015: Little for rising justice costs

April 21 2015 21 April 2015

Tuesday’s federal budget has very little in store for Canada’s justice system.

The long-awaited unveiling of the Harper Government’s pre-election spending plan contains a sizeable pot of money for defence, security and the border, but very little to address the pressures being put on Canada’s courts to process the increasing number of litigants.

The budget, lacking big funding announcements of years prior, contain slights changes that could impact copyright, environmental, and criminal law matters.

But the only funding Canada’s courts will see is a new commitment of $27 million over five years to increase security at the country’s legal buildings.

“To ensure Canada’s judicial system continues to function optimally, judges, litigants, lawyers and the public must be safe and secure. That is why the Government is proposing to invest in key enhancements in physical and IT security at federal courts, including the Supreme Court of Canada, registry offices and administrative buildings across Canada,” the budget plan reads.

Victims and intelligence

The budget promises to make more use of the growing pot of money promised by the mandatory victims surcharge.

The budget plan includes new cash for Child Advocacy Centres, which “deliver community-based programs that address the needs of young victims of or witnesses to crime.” While it’s not clear how much money that will include, the plan says the cash will come from the Victims Fund, a pool of money filled by levying the mandatory victim’s surcharge on most offenders.

New money will be going to police, intelligence and border agencies to help cover the increased costs of Bill C-51, the Conservatives’ anti-terrorism legislation. While there are little details of just how that money will be appropriated, the budget also announced another $12.5 million, over five years, for the Security Intelligence Review Committee — the board tasked with requesting and reviewing CSIS’ past actions.

Very little in the budget is seeking to improve Canada’s privacy regime. The government announced that they will introduce changes to the Personal Information Protection and Electronic Documents Act (PIPEDA) that will implement new conditions on how the World Anti-Doping Agency deal with Canadians’ private data (and any similar organizations, if there are any.)

More corporate liability

The budget also announced new powers for the Minister of Transport to order vehicle recalls under the Motor Vehicle Safety Act.

“Amendments will provide the Minister of Transport with the power to order a recall, and to levy monetary penalties in the event of non-compliance with the Act,” the plan reads.

At present, the minister can enforce recall orders but cannot order them.

Canadian companies will also have to keep an eye on the new Chemicals Management Plan. The budget includes nearly $500 million over five years to renew that plan, which works to identify and mitigate the effects of thousands of dangerous chemicals that have been flagged but not fully identified as dangerous. The new money will allow the federal government to “complete the assessment of the remaining 1,700 legacy toxic substances.” That means companies dealing with those chemicals may face new legal requirements to handle such substances.

Copyright changes

The budget also introduces new copyright protections for live recordings dating back 70 years.

At present, Copyright Act protects audio recordings dating back a half century. Extending the limit by two decades, the government contends, “will ensure that performers and record labels are fairly compensated for the use of their music for an additional 20 years.”

On top of that, the budget is vowing to update the Patent Act, Trade-marks Act, and the Industrial Design Act, to provide intellectual property agents with a statutory privilege for confidential communications with clients.”

The budget plan does not go into details as to how that would change or impact Canada’s intellectual property regime, except to say that such measures are already in place in Australia, New Zealand, and the United Kingdom.

The amendments to the acts will also see changes that, the government says, will increase legal clarity.

“For example, proposed amendments would provide the Canadian Intellectual Property Office with the ability to extend key deadlines in cases of force majeure events such as floods or ice storms,” the budget plan reads.

Catching tax cheats and expanding tax breaks

Ottawa, for years, has been promising changes to close tax loopholes, go after tax havens, and catch tax cheats. In this budget, the government is promising $118 million, over five years, for the Canadian Revenue Agency to improve audit efforts to investigate the underground economy, and to create ‘Underground Economy Specialist Teams,’ with very little explanation of what that means.

Another pot of money, $25 million, will be committed to go after offshore tax havens.

The third tax-related commitment is $58 million dedicated “to address additional cases that have been identified through the enhanced risk assessment systems to further combat aggressive tax avoidance—domestically and internationally.” The program would specifically target “the largest and most complex business entities.”

The budget also unveils changes to the country’s sanction regime, though it’s not entirely clear how. The budget simply reads that Ottawa will unveil “new legislative and regulatory amendments to improve the effectiveness of Canada’s economic sanctions regime.”

New changes will also apply to how the government deals with ‘synthetic equity arrangements’, a derivative financial instrument designed to mimic risks and rewards associated with other shares or equity. The changes, in effect, will ensure that gain and profits cannot be moved to an entity that is tax-exempt under Canadian law.

But it’s not all aggressive investigations of tax fraudsters and sanctions of despots.

The government is looking to find possible changes to the Registered Disability Savings Plan (RDSP) that will help those disabled adults who might not have the legally required competency to enter into a contract.

Previously, the only option for those individuals was to be declared legally incompetent and to have a family member be declared their legal guardian, in order to claim the RDSP.

The temporary solution was to have a family member of the disabled person simply become the plan holder in their stead. Ottawa will be renewing that stopgap while the provinces—specifically, the Law Commission of Ontario—to review and improve the entire process.

Also of note for corporations are incoming changes that will “continue to modernize Canada’s legal and regulatory frameworks in the area of corporate governance.”

In news that will be well-received by charities, the budget also plans to exempt corporations from capital gains taxes if they donate the proceeds from a property or private share sale, where the profits are donated to a charity within thirty days.

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