Law Times

PAGE 6 COMMENT Law Times Group Publisher ....... Karen Lorimer Editorial Director ....... Gail J. Cohen Editor ........... Gretchen Drummie Associate Editor ......... Robert Todd Staff Writer ............. Glenn Kauth Copy Editor ............. Neal Adams CaseLaw Editor ...... Jennifer Wright Art Director .......... Alicia Adamson Production Co-ordinator .. Catherine Giles Electronic Production Specialist ............. Derek Welford Advertising Sales .... Kimberlee Pascoe . . . . . . . . . . . . . . . . . . . . . . . . . . Kathy Liotta Sales Co-ordinator ......... Sandy Shutt ©Law Times Inc. 2009 All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times Inc. disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Editorial Obiter Two-timing A pparently it's time to promote "truth in sentencing." At least that's according to Jus- tice Minister Rob Nicholson who made the comment as he moved to end the tra- ditional granting of enhanced credit by judges for pretrial custody. "I believe there is widespread sup- port in this country to address this issue," Nicholson told reporters. Really? Well, not from this desk. Nicholson tabled the bill to curb the two-for-one credit practice on March 27 and it is now in first reading. Routinely judges mete out enhanced credit for so-called "dead time" in sentenc- ing. The idea is it compensates inmates who are in custody awaiting trial in jam-packed provincial facilities with no programming. And it makes up for the fact that the time one sits in jail — presumed innocent — awaiting trial doesn't count when it comes to parole. The Supreme Court of Canada has said that dead time is real time. And here's the thing: it's a discretion- ary power to hand it out. One of the stated reasons behind this push to end the scheme is it would speed up the system because inmates are clogging the wheels of justice by dragging out their pre- trial custody in order to reduce their overall sentences. Okay, show us evidence this is really happening and we may jump on the bandwagon, but so far we haven't seen it. Sure, there's probably some rube out there who has tried to manipulate the sys- tem to extend his pretrial custody; choos- ing for example to malinger in the medieval Don Jail accumulating dead time whilst get- ting seaweed wraps and daily massages. But there's no proof that droves of jail-loving inmates are the reason behind our gummed up justice system. Which brings us back to that little word "discretionary" again. Aren't the sentencing judges in the best position to determine whether that's happen- ing, and if it is, hand out straight time rather than enhanced credit? Why throw a blanket accusation and by extension further punishment across all inmates if the remedy is already in place? Don't we trust our judges to know when they're having the wool pulled over their eyes? "In fact in Ontario, and elsewhere in the country, judges do not give credit for pretrial custody if they think somebody has deliberately delayed their sentencing to get that credit," Criminal Lawyers' Association president Frank Addario told CBC news. Meanwhile, doesn't anyone else have a problem with a "truth in sentencing" that could actually promote accused people pleading guilty for a lesser sentence to avoid rotting in jail longer while awaiting trial? The real reason pretrial custody is so long, and thus deserving of enhanced credit, is because those wheels of justice are moving at a snail's pace, fuelled by a variety of factors other than clever in- mates. Some suggest that the two-for-one practice is also a means for judges to send a message that the system is too slow, so by all means let's remove that ability from the very people who are in the best posi- tion to know the "truth." Meanwhile, let's not forget, not everyone lanquishing in pretrial custody is guilty. This is an easy "tough on crime" sell to a public that won't dig below the rhetoric and it will probably pass. But it won't get those wheels moving. Is playing politics the real truth in sentencing here? — Gretchen Drummie Go to www.lawtimesnews.com for an audio version. I really enjoy this small luxury and I am used to paying Ed $12 per haircut. Thanks to the newly harmonized sales tax in Ontario's latest budget, after July 2010, I will have to pay 8-per-cent (96 cents to be precise) more for each of my haircuts. Before har- monization, haircuts were PST exempt. After harmonization, Ed will have to collect a 13-per- cent harmonized sales tax (the HST) for the government. The increased 96 cents for I my haircuts will be annoying, but will not ultimately affect my haircutting behaviour. Other in- cidences of this sales tax harmo- nization, especially for the new home construction industry, will be far more onerous. According to a report on the subject com- missioned by the Building In- dustry and Land Development Association (the BILD report), the present combined GST and PST tax exigible on the pur- chase of a typical single family detached home in the City of get a haircut from Ed, the barber (a barber, not a hair- stylist), every other week. Tax harmonization a double whammy The Toronto ranges between 5.3 per cent and 6.9 per cent of the me- dian price of such a new home — a combined sales tax load of just short of $50,000. After harmonization, how- ever, the total price of the same City of Toronto single family de- tached home will attract just over $96,000 in HST, a whopping $46,000 increase in the cost of Toronto home ownership. Admit- tedly, the increased sales tax hit is higher in more expensive housing municipalities like Toronto, Ot- tawa, and London, where many homes are priced high enough to eliminate the benefits of the GST rebate (a similar rebate is available under the new HST for the PST component of the tax). That said, even on homes below $400,000, all of which would qualify for the maximum HST rebate, the net sales tax burden will still not be entirely revenue neutral and homebuyers will still face an in- creased net sales tax burden in the HST. Ontario's homebuyers are also going to have to grapple with increased incidental costs as Dirt By Jeffrey W. Lem a direct result of harmonization. After harmonization, legal fees, long since exempt from PST, will become subject to the 13- per-cent HST. Similarly, there will be corresponding increases in surveyors' fees, appraisal and home inspection fees, title insur- ance premiums, and real estate commissions, all of which, like legal fees, used to be exempt from PST. Although commer- cial real estate and resale homes will be spared much of the direct impact of the tax harmoniza- tion, all real estate deals will still suffer indirectly because of these increased ancillary costs. Toronto homebuyers are fac- ing a veritable double whammy with sales tax harmonization, given the effective doubling of the land transfer tax last year after the implementation of Toronto's www.lawtimesnews.com own municipal land transfer tax. Once harmonization is fully implemented, the total tax load payable on the closing of a typi- cal Toronto new home purchase will be a stunning 17 per cent (13 per cent in HST and 4 per cent in combined land transfer taxes). The transitional burden of the harmonization will fall heavily on those builders with existing com- mitted projects almost ready for market. There are no transitional grandfathering provisions in the budget to protect such builders with committed projects already in the pipeline. What's worse, it is not clear in the budget what happens to contracts that may have already entered into prior to the budget, but with closing dates set to occur after the imple- mentation of harmonization in July 2010 (typically in condo- minium projects with long lead times). Where the purchase price on these existing contracts is ex- pressed as "GST included," as they typically are, and presuming that this is subsequently inter- preted as meaning "HST includ- ed," as they very well might be, April 6/13, 2009 • lAw Times Law Times Inc. 240 Edward Street, Aurora, ON • L4G 3S9 Tel: 905-841-6481 • Fax: 905-727-0017 www.lawtimesnews.com President: Stuart J. Morrison Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Law Times Inc. 240 Edward St., Aurora, Ont. L4G 3S9 • 905-841-6481. lawtimes@clbmedia.ca CIRCULATIONS & SUBSCRIPTIONS $141.75 per year in Canada (GST incl., GST Reg. #R121351134) and US$266.25 for foreign addresses. Single copies are $3.55 Circulation inquiries, postal returns and address changes should include a copy of the mailing label(s) and should be sent to Law Times Inc. 240 Edward St., Aurora, Ont. L4G 3S9. Return postage guaranteed. Contact Kristen Schulz-Lacey at: kschulz-lacey@clbmedia.ca or Tel: 905-713-4355 • Toll free: 1-888-743-3551 or Fax: 905-841-4357. ADVERTISING Advertising inquiries and materials should be directed to Sales, Law Times, 240 Edward St., Aurora, Ont. L4G 3S9 or call Karen Lorimer at 905-713-4339 klorimer@clbme- dia.ca, Kimberlee Pascoe at 905-713-4342 kpascoe@clbmedia.ca, or Kathy Liotta at 905- 713- 4340 kliotta@clbmedia.ca or Sandy Shutt at 905-713-4337 sshutt@clbmedia.ca Law Times is printed on newsprint containing 25-30 per cent post-consumer recycled materials. Please recycle this newspaper. it is the builder, not the buyers, who will be eating the increased sales tax. Of course, even if some transitional grandfathering pro- visions are ultimately included in the implementing bill, such limited grandfathering is unlikely to provide much of a salve in the long run. As leading building industry lawyer, Harry Herskowitz, se- nior counsel at DelZotto Zorzi LLP, succinctly and eloquently concludes: "The government should be severely criticized for introducing harmonization in a way which was not tax rev- enue neutral on new homes and condominiums. Obviously, the additional tax burden that arises from harmonization and which will be applicable to all new homes and condominiums (especially those priced above $500,000) will have a nega- tive (if not devastating) impact on builders in the GTA, and in other large urban centres in Ontario." LT Jeffrey W. Lem is a partner in the real estate group at Davies Ward Phillips

• Cover
• Family Court Warning
• The Dirt
• Focus On Class Actions