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PAGE 8 COMMENT February 2, 2009 • Law Times able online at: http://www.budget. gc.ca/2009/index.html. In the lead up to the budget, Imagine Can- ada (a national umbrella charity that engages in research and ini- tiatives to assist and promote the work of charities and non-profit organizations in Canada) submit- ted a brief dated Jan. 15, entitled, Short-Term Stimulus Measures for Assisting Canadians and Communities during the Eco- nomic Downturn to Prime Min- ister Stephen Harper and Finance Minister Jim Flaherty. The brief was the culmina- O No new tax incentive for charitable giving Budget n Jan. 27, Canada's fed- eral government released its annual budget, avail- may indirectly have the effect of encouraging charitable donations is the mineral exploration tax credit, which has been extended for anoth- er year until March 31, 2010. This credit is part of the in- One stimulus in the budget that Eye On The centives that encourage gifts of flow-through shares (tax-based fi- nancing incentives available to the oil and gas, as well as mining sec- tors). The current rules effectively permit corporations to renounce or "flow-through" income tax de- ductions associated with certain activities to shareholders in ex- change for the sale of their shares. The impact of the elimina- tion of consultations with a task force struck by Imagine Canada in early January to provide ad- ditional detail to the measures called for in an open letter to the prime minister published in newspapers on Nov. 21, 2008. The brief put forward the fol- lowing three key simulative mea- sures to assist Canada's vulnerable populations and the charitable and non-profit sector that sup- ports them: 1) maintain direct funding through federal grants and contributions agreements; 2) earmark federal infrastructure funding for community and social services, arts and culture, sports and recreation, and green retrofit initiatives; and 3) provide a time- limited enhanced tax credit mea- sure to stimulate giving. Although the budget address- es funding concerns through various grants, contributions, and earmarks, unfortunately it does not provide any direct mechanism to encourage chari- table donations through en- hanced tax measures, such as a three-year enhancement of the charitable tax credit as recom- mended by Imagine Canada. tion of the tax on capital gains accruing on donations of public- ly traded securities to registered charities in previous budgets, when coupled with tax incentives on flow-through shares issued by companies in the resource sector, has generally garnered interest and planning opportunities for investors in the charitable sector. However, this one indirect tax incentive directed at the mining sector is hardly enough to make any significant difference to en- courage giving in Canada. In relation to the almost $30 billion announced to support the economy this year, the budget pro- vides for various grants, contribu- tions, and earmarks that the federal government claims acknowledges the importance of charities and non-profits in Canada's economy. Specifically, the budget pro- vides a targeted, two-year fund of $60 million to support infrastruc- ture-related costs for local and community cultural and heritage institutions, such as local theatres, small museums, and libraries. Ex- amples include: the Toronto Pub- lic Library revitalization project; Toronto's Famous PEOPLE Play- ers; la Maison du Festival de Jazz By Terrance S. Carter and Karen J. Cooper in Montreal; and the Confedera- tion Centre of the Arts in Char- lottetown, P.E.I. This support will be provided through Canadian Heritage programming. Another infrastructure-related budget initiative that purports to as- sist charities and non-profits to con- tribute to Canada's economy, is the announced $1 billion earmarked over five years for a new Southern Ontario Development Agency. The budget claims that its programs will support economic and community development, innovation, and economic di- versification, with contributions to communities, businesses, as well as non-profit organizations to help workers and communi- ties in southern Ontario. With respect to grants, the fed- eral government describes Canada's Youth Employment Strategy as its key program to help young people support non-profit organizations. The government anticipates that the current labour market disruptions may mean that young Canadians, in particular, may find it harder to find summer jobs. To improve their prospects, the budget will provide two-year targeted funding of $20 million delivered through the Canada Summer Jobs program to enable more employers in the non-profit sector to hire summer students. In addition, the government will provide a one-time grant of $15 million to the YMCA and YWCA to place youth in internships in non-profit and community service organizations, with a focus on environmental projects. While the grants, contribu- tions, and earmarks provided for in the budget are certainly wel- come, they are only temporary stimuli and as such, do not reflect a serious commitment by the federal government to assist charities and non-profit organizations to fulfil their role in Canada's economy. The voluntary sector was looking for much more from the federal government, particular given the broad support that the sector gave to the Imagine Cana- da recommendation of enhanced tax credit measures to stimulate charitable giving. We will now presumably have to wait until the 2010 budget to hopefully see any real progress in the area of tax incentives for charitable giving. LT Terrance S. Carter is managing partner at Carters Professional Corporation and counsel to Fasken Martineau DuMoulin LLP on charitable matters. His e-mail ad- dress is tcarter@carters.ca. Karen J. Cooper is a partner at Carters Pro- fessional Corporation. Her e-mail address is kcooper@carters.ca. More reasonable story usually wins Continued from page 7 launch a discovery war that makes the costs of continuing to pay legal fees during the discovery phase so substantial that the prospect of paying an exorbitant amount to settle the dispute becomes more attractive, even though the amount demanded cannot be justified based on the merits of the case. The key to avoiding falling prey to this tactic is to under- stand how important pretrial discovery is to litigation strategy and making a plan early on that will control costs and mini- mize business disruption while meeting the legal demands of the discovery process. Tip 4 – Don't Be Afraid Of A Jury Trial: One of the most common perceptions of the U.S. judicial system is of an angry jury awarding hundreds of millions of dollars in damages to a plaintiff to punish an impersonal corporate defendant. The fear of being subject to an apparently whimsical jury is often enough to convince a corporate defendant to pay what it must to avoid a trial. However, when deciding whether to settle a dispute or go to trial, the important thing to remember is that jurors typically try to reach the result they feel is the most fair under the circumstances. In other words, rather than try to determine the "truth" or focus on narrow legal distinctions, in most instances ju- ries merely pick a side in a dispute. As a result, one of the keys to trying a case to a jury is to focus on presenting a reasonable, believable story that is supported by the facts and that is logically consistent and coherent. The party with the more reasonable story often wins. Accordingly, when faced with the prospect of having to submit Law Times congratulates the 79 new members of the Law Society of Upper Canada who were called to the bar at a ceremony held at Osgoode Hall in Convocation Hall on Jan. 28. Saba Ahmad Harold Siegmar Albrecht Parimal Ananth Brian George Bell Natalie Leora Berens Arkadi Bouchelev Samantha Elizabeth Burton Edith Cynthia Cameron Kimberlea Marie Margaret Cartwright Amanda Marie Chapman George Christakos Ava-Gaye Monique Colquhoun James Leland Cooper Delia Cristea Patrick Amico D'Aloisio Marjorie Alexandra Dérisier Chaitali Harshal Desai Emélie Anne Desjardins John Bernard Doran Aleksander Ejsmont Pauline El-tenn James Paul Evans Charles David Feldman Daniel Robert Finestone Cameron Robert Bruce Fiske Stephen Jonathan Gilding Catherine Grace Gribbin Ziad Haddad Tyler Albert Christopher Hargreaves Andrew John Arndt Hastings Carinne Marguerite Hébert- Sabourin Aaron Joseph Hershtal Theresa Mary Hinz Tamara Sue Hisko Douglas Christopher Shawn Holt John Stanley Hooper Daljit Singh Jammu Mary Keyork Colina King Emily Alexandra Kirkpatrick Faye Bina Kravetz Tan Loc Le Chi Yan Grace Leung Sheila Jane Lynn Anastasia Mamay Shane William Charles Markle Morgan Andrew Sarsfield Martin Judy Mathew Mélissa Isabelle Marie Mathieu Eduarda Maria Dias Oliveira Matos Jeffrey Franklin Mazin Michael Carmine Mazzuca Amanda Jennifer Heather McBride Jesse Christopher McCormick Allison Tracy McLure Sonja June Mills Wade Russell Mills Kamal Monga Natalie Anne Munroe Ghulam Murtaza Paul Chidi Omeziri Victor Pilnitz Loredana Porcelli Salama Muhammed Abdulla Rajab Wade Jason Rogers Leah Schlesinger Paula Chantel Seymour Kevin Michael Shnier Sheeba Sibal William Patrick Sloan Matthew Jordan Solomon Ian Michael Speers Eric Avi Spindel Lissette de Maria Torres Peraza Michael Joseph Venturi Julia Rosa Vera-Calderon Nnamdi Sunny-Venn Vincent Jennifer Christine Wiens Philip James Worthington a dispute to a trial by jury, care should be taken from the earliest stages to develop and maintain a reasonable, believable, coherent story. Tip 5 – Don't Expect To Recover Your Attorney's Fees: In the Canadian system, the losing party in a lawsuit normally pays the legal fees incurred by the prevailing party. This cost- shifting approach is an important factor that litigants must take into account when developing their litigation strategy. In the U.S. system, attorney fees are recoverable only in limited cir- cumstances. As a result, costly pretrial wrangling is a common tactic used to exhaust the resources of an opponent and wear them down into accepting an advantageous settlement. As such, even a relatively simple dispute can cost hundreds of thou- sands of dollars in legal fees and expenses. Conclusion: Litigation can be a frightening, aggravating, and expensive process. Even more so, being forced to litigate in an unfa- miliar and far-away venue can make the fear, aggravation, and expense of litigation exponentially greater. However, knowing what the road ahead has in store and making a competent plan at the earliest stage possible will go a long way in reducing the fear, aggravation, and expense of litigation in the modern world. LT Stephen Maddex is an associate in the Commercial Litiga- tion Group in Ottawa. Before joining Lang Michener LLP, he practised for more than eight years with two large law firms in Houston, Texas, where he gained significant trial experience and appeared in courts all over Texas, as well as the Texas Court of Appeals. His practice focuses on U.S./Canada Cross-Border Litigation. Contact him directly at 613-232-7171 ext. 108 or smaddex@langmichener.ca. www.lawtimesnews.com