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Surge in COVID-19 justice issues could spur Legal Aid Ontario funding crisis, lawyers warn

Thursday, August 20, 2020 @ 9:30 AM | By John Schofield


The federal government needs to step in to avert a funding crisis facing Legal Aid Ontario that could prevent access to justice for thousands of people hit hardest by the COVID-19 pandemic, say some lawyers and leaders on the front lines of legal aid.

The impact of the pandemic and interest rate cuts could leave Legal Aid Ontario (LAO) with as much as a $70-million hole in its 2020-21 budget, according to David McKillop, the organization’s vice-president, strategy and public affairs.

David McKillop, LAO vice-president, strategy and public affairs

Under the Law Society Act, LAO receives a portion of its funding every year from The Law Foundation of Ontario, which channels 75 per cent of its revenues from the interest on lawyers’ and paralegals’ mixed trust accounts to Legal Aid Ontario. But to stimulate Canada’s pandemic-depressed economy, the Bank of Canada has slashed its key rate by 1.5 percentage points to 0.25 per cent. The dramatic reversal from last year’s higher rates and strong economy means LAO’s infusion from The Law Foundation for 2020-21 could fall to between $20 million and $30 million, down from $91 million for 2019-20, McKillop told The Lawyer’s Daily.

An approximately 30 per cent decline in criminal law matters and 60 per cent reduction in refugee law cases due to the pandemic has helped delay a full-blown funding crunch, said McKillop. But it may be delaying the inevitable.

“Everyone's worried, me included, about what’s coming, and no one really knows what’s coming,” he said. “There’s this big backlog (in cases). And so that would be my future concern, is that that backlog is going to have to be dealt with and that’s going to increase demand on legal aid services and, because of our reduction in Law Foundation revenue, we may have difficulty meeting that increased level of demand.”

Dana Fisher, Local vice president for the LAO Lawyers Local of the Society of United Professionals and LAO Staff Lawyer

A 30-per-cent cut imposed last year by the Ontario government of Premier Doug Ford had already forced Legal Aid Ontario to trim its budget by $133 million. The $91-million windfall from The Law Foundation in 2019 helped cushion that blow, said McKillop — but now the cupboard is bare.

Dana Fisher, an LAO staff lawyer and vice-president of the LAO Lawyers’ Local of the Society of United Professionals, which represents about 375 LAO staff lawyers, said there is widespread concern in her ranks that the Ontario government’s Smarter and Stronger Justice Act, 2020, passed last month, will further tighten the financial screws on Legal Aid Ontario.

Among other things, she said, the legislation will require community legal aid clinics to renegotiate their funding agreements with the government. And the law will pass the bill for court-ordered counsel on to Legal Aid Ontario instead of the Ministry of the Attorney General, effectively downloading costs on to LAO. In addition, said Fisher, the language of the legislation no longer mandates Legal Aid Ontario to provide criminal law, family law and clinic services, which some legal aid advocates fear sets the table for more service cuts at the hands of the government. Among legal aid lawyers, “there’s a lot of uncertainty in terms of what's going to happen in the future,” she added.

Lenny Abramowicz, executive director of the Association of Community Legal Clinics of Ontario

While the provincial government deserves its share of the blame for LAO’s funding challenges, it didn’t create the current debacle brought on by the pandemic, said Lenny Abramowicz, executive director of the Toronto-based Association of Community Legal Clinics of Ontario.

“The decrease in (Law Foundation) funds is purely as a result of the downturn in the economy and the slashing of the Bank of Canada interest rate as a result of COVID,” he said in an e-mail to The Lawyer’s Daily. “The feds are investing money (appropriately) in many sectors to deal with the COVID-related economic fallout. They should be doing the same for legal aid services, but so far have not done so.”

Abramowicz said he fears the federal and provincial governments will turn legal aid funding into a political football. “The ones who will get caught in the middle and hurt are the clients of legal aid,” he said, “most of whom are racialized and/or struggling with disabilities and who have already been the hardest hit by COVID. Both the feds and the province should be putting these most vulnerable people first.”

A spokesperson for Attorney General Doug Downey said in an e-mailed statement that Ontario is not the only province urging Prime Minister Justin Trudeau’s Liberal government to provide emergency funding to provincial legal aid services to handle the surge in new clients expected because of COVID-19. The Smarter and Stronger Justice Act, 2020, added Jenessa Crognali, was designed to “support the attorney general’s commitment to making it easier, faster and more affordable for people in Ontario to resolve their legal issues.”

Meaghen McKenna, a spokesperson for the federal Department of Justice, noted that Ottawa has increased its share of legal aid funding for Ontario from about $62.55 million in 2017-18 to $89.76 million in 2019-20. The federal government provides funding for criminal and refugee legal aid only. Of the total federal share for Ontario, she said in an e-mail to The Lawyer’s Daily, refugee and immigration legal aid funding alone has increased from about $15.9 million in 2017-18 to about $40.9 million in 2019-20.

“The government of Canada is committed to access to justice for Canadians and legal aid is an important component of that commitment,” she added in the e-mail. “Provincial and territorial governments are responsible for the administration of justice. They operate and administer legal aid programs and make determinations as to which types of proceedings are funded and what type of legal assistance is provided for them.”

Both the federal and provincial governments are well aware of Legal Aid Ontario’s funding challenges, said McKillop. But in the midst of the pandemic, they’ve been scrambling to address more pressing emergencies. “That is just kind of the impression I get,” he added. “They say you're on our radar, but if your back isn't going to be up against the wall until the fall or the winter or something like that, then we might not get to you until then.”

When Ottawa and Queen’s Park finally sit down to solve the problem, said McKillop, Legal Aid Ontario’s most pressing need is a stable, long-term and predictable funding base. For starters, every provincial legal aid service receives some funding from its provincial law foundation, he explained. But no other legal aid organization relies as heavily on law foundation funding as Legal Aid Ontario. It now accounts for as much as 20 per cent of LAO’s budget. And, as recent experience has proven, that can fluctuate wildly.

“So here you have a government program — what is essentially part of its social safety net — relying on a variable source of income,” said McKillop. “I don't know of another government program that relies almost at all, if not that heavily, on a variable source of income.”

Ideally, he suggested, the provincial and federal governments could agree on a base level of legal aid funding for Canada’s most populous province and backstop that amount. The issue, as always, is who pays for what. The federal government, for example, argues that family law legal aid is exclusively an area of provincial jurisdiction and provides no funding for that. Ontario is now arguing, in turn, that refugee legal aid is exclusively a federal responsibility and refuses to fund that. Ontario and other provinces have also argued that the federal government should cover more of the cost of criminal legal aid.

“Obviously, the federal government is in charge of the criminal law,” said McKillop. “They set the criminal law. Under the Constitution, the province administers the criminal law. But so much of the demand and the call on legal aid comes from the level of government that sets the criminal law. And so there is this view that it should be 50/50. But the federal share certainly isn’t 50 per cent in Ontario.”

Trevor Farrow, associate dean at Osgoode Hall Law School

Trevor Farrow, associate dean at Osgoode Hall Law School at York University and the chair of the Canadian Forum on Civil Justice, a non-profit group that has studied legal aid extensively, said it may be time to consider creative solutions to the chronic underfunding of legal aid in Ontario, which he described as one of the best legal aid programs in the world.

The annual income cutoff for legal aid of $22,720 for a single person already disqualifies many Ontarians from receiving it, which has helped fuel the rise in self-represented litigants.

One possible funding solution, said Farrow, is a form of legal insurance, like provincial health insurance — perhaps on top of conventional legal aid. It could potentially be delivered through some kind of public-private partnership, he suggested. In the 1990s, for example, the Canadian Auto Workers union added legal insurance to its employee benefits.

No matter how both levels of government approach legal aid funding, said Farrow, research indicates that every dollar spent up front on legal aid provides a return of $9 to $16 in savings by helping to forestall other societal expenses.

“In my view, the question needs to be about what do we care about as a society,” he told The Lawyer's Daily. “We can continue to provide the most limited and basic of funding that is available to the most vulnerable and those on the margins of society and do our best with that.

“But if you think about value for money,” he added, “the research shows that we would be way better off to invest in justice at the front end in order to save way more on the back end. It costs us more if we don't invest.”

If you have any information, story ideas or news tips for The Lawyer’s Daily please contact John Schofield at john.schofield@lexisnexis.ca or call (905) 415-5891.