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Law Times • February 9/16, 2009 Play HST card carefully Mr. Premier H ow things change when you're suddenly a have-not province in Confederation. The traditional have-not Atlantic provinces had to kowtow to the feds and harmonize their sales taxes with the GST in order to maintain favour with the feds, but Ontario and others stood resolute in their refusal. Now, the tide is turning and it is Ontario's turn to go cap in hand to the Hill. Interestingly, Premier Dal- ton McGuinty let slip what price that largesse carried when he recently said he would consider harmonizing the eight-per-cent Ontario provincial sales tax with the GST. In the spate of doom and gloom headlines around the recession and an- ticipation of what might be in the fed- eral package, it almost went unnoticed, such is the nature of politics where the media pit bull pack fall upon and de- vour the nearest and juiciest bone. Depending on your outlook this is either a political opportunity or a disaster in the making. Certainly, it's a political opportunity for Premier "no new taxes" McGuinty to slip another level of tax onto busi- nesses and consumers since a harmo- nized tax or HST will bring in far more than the current two-tier system. When Nova Scotia harmonized, some $84 million more in taxes were siphoned from the economy; now, overlay that over Ontario's dispro- portionately larger economy and the numbers are enough to make a bureaucrat drool. It means more tax revenue but it also means an unhappy populace and another incentive for the underground economy, especially in a recession when cash is being restored to the throne. This is in part why the NDP under Roy Romanow rode to a massive vic- tory at the polls on the simple prom- ise of undoing the harmonization in the early 1990s. Interestingly, though, once elected and "deharmonized," they ended up expanding the range of goods and services subject to PST, so voters did get a bit of a hosing. This too is the nature of politics. Like dope to a junkie, money streams are too hard for government to give up once they're hooked into it. So for McGuinty, it's a way of rais- ing taxes in tight times while push- ing off the blame to the feds. It's not that the rate will increase — fi ve-per- cent GST and eight-per-cent PST still means 13 per cent in combined sales taxes — it's just that the range of goods and services subject to tax increases exponentially. Children's clothes and shoes and professional services become taxable under HST and that includes legal fees not currently subject to PST. Inside Queen's Park By Ian Harvey So suddenly, in addition to the GST on billable hours charged, there's anoth- er eight-per-cent levy. It may not seem much to businesses since they'll pass the cost on to their customers — many of whom of course are consumers. And for Joe Average going through a divorce, here's another deterrent to hiring a family lawyer. Why not represent yourself? Of course, we've seen what that does to the backlog in family courts. Law fi rms too must now collect the new tax and remit it, adding a little more to their administrative burden, though arguably some say it's actually not more work since instead of collect- ing fi ve-per-cent GST they now collect 13-per-cent HST and deduct their in- put costs accordingly. Still, it's another point of pain. Perhaps, though, there is another opportunity here and that's to use the entry of the nation's largest economy and most populous province to reassess some of the GST rules around what is taxable and what isn't, and at what level the tax rates cut in. Those earn- ing $30,000 or less in self-employed income are exempt, but that threshold hasn't been changed in years. And children's clothes? What politi- cian wants to come over to Wal-Mart with me this Saturday and get up on a soapbox and justify a tax on kiddy clothes to the throngs of shoppers there? Thought so. Maybe we could lower the PST a point to offset any ap- pearance of a tax hike? Or maybe, says Kevin Gaudet of the Canadian Taxpayers Federation, McGuinty would repeal the Health Tax as a trade off. Sorry, should have said levy, because it isn't "offi cially" a tax. Otherwise it is a disaster in the mak- ing, taking money out of circulation at a time when the economy is desperate for every dime. The premier would be well advised to play his HST card carefully; unless he extracts concessions well beyond the temporary fi nancing of the stimulus package, we'll all be a lot poorer both in terms of resources and cash. LT Ian Harvey has been a journalist for 32 years writing about a diverse range of is- sues including legal and political affairs. His e-mail address is ianharvey@rogers. com. 10% COMMENT PAGE 7 The meaning of media A BY JACOB TUMMON For Law Times signifi cant change to Canadian def- amation law was made in Cusson v. Quan recently followed in Grant v. Torstar Corp. Cusson found a public interest defence for responsible journalism which means that "where a media defendant can show that it acted in accordance with the stan- dards of responsible journalism in pub- lishing a story that the public was en- titled to hear, it has a defence even if it got some of its facts wrong." Grant adds, "both substantively and procedurally, courts must be able to be fl exible when dealing with the responsible journalism defence." This defence is a de- parture from an earlier line of cases that re- fused to apply differing standards between media and ordinary citizens. The purpose of the responsible jour- nalism defence is to provide broader ac- commodation to the value of freedom of expression by relaxing traditional common law no-fault liability as applied to respon- sible journalism, while continuing to value protection of reputation by not going so far as to extend qualifi ed privilege (which requires proof of malice to be defeated). An appeal of Cusson will be heard by the Supreme Court of Canada on Feb. 17. In de- ciding whether to affi rm this change, Canada's highest court should refl ect on what "media" actually means, because its meaning has a direct effect on the change achieving, and re- maining limited to, its stated purpose. Cusson undertook a thorough canvass- ing of the development of defamation law in other common law jurisdictions, fi nding they had all shifted away from protection of reputation. It adopted a list of 10 fac- tors from Reynolds v. Times Newspapers Ltd. as indicia of whether the media conducted itself in accordance with the standards of re- sponsible journalism, and were truly acting in the public interest in the circumstances. Cusson did not comment on what en- tities, following the stated indicia, could avail themselves of the defence. Put another way, Cusson did not com- ment on what constituted "media." This omission is reminiscent of early Charter jurisprudence that overlooked the scope of the Charter's application, i.e. confi ned to government. What does the meaning of media mat- ter? Actually a great deal, for the media landscape has evolved strikingly due to the Internet. If media is not carefully defi ned, then the new defence articulated in Cus- son could, over time, be a widely accessed defence for libel. If a person, not neces- sarily with any journalistic experience, follows the Reynolds factors and publishes something on the Internet, yet turns out Speaker's Corner to have some facts wrong, should they be precluded from a successful responsible journalism defence? There is a fl uid relationship between tra- ditional media and emerging online forms. Many Canadian newspapers and maga- zines have online incarnations that consist of blogging sections unavailable in their print editions. Bill Tieleman (billtieleman. blogspot.com) is but one of many examples of journalists who publish credible work both on their own blogs and in print media. Small market and niche print publica- tions, while tradi- tional in form, may be less sophisticated and journalistically rigorous than a purely online entity. There are news sites com- prised entirely of citizen-generated news, such as NowPublic.com and Wikinews.org. Moreover, in some circumstances media reporting by ordinary citizens may provide a valuable source of information. For instance, local events, such as mu- nicipal elections, may be very much in the public interest and covered extensively by blogs, but because of their relative unim- portance not receive much scrutiny by traditional media. However, the value of original news re- porting by blogs is by no means restricted to events of only local import. During the 2008 Canadian federal election, blogger Steve Janke broke a story about then-incumbent MP Garth Turner not disclosing to a TV camera crew fi lm- ing him door knocking, that while being fi lmed he knocked on the door of some- one tied to his campaign. Suffi ce it to say, that particular door knocking depicted a rosy interaction with a constituent, and the fallout from the story did not help re-elect Mr. Turner. Citizen journalism may be invaluable in recording and disseminating informa- tion on breaking news stories. For ex- ample, fi rst-hand accounts of the 2008 terrorist attack in Mumbai were posted in real time on twitter.com. The bottom line is: a discrete distinc- tion between traditional media and media on the Internet, some of which may be generated by ordinary citizens, likely does not exist. If the Supreme Court is, therefore, to af- fi rm the responsible journalism defence, it should consider and deliberate this fact. Some indicia of media may be: how longstanding an entity has engaged in news reporting, and the presence of editors or oversight. Such indicia may provide guidance but not be determinative as to whether an en- tity is media for the purposes of the de- fence if the dominant consideration is the public interest. LT Jacob Tummon is a civil litigator in Victo- ria, B.C. His e-mail address is jtummon@ gmail.com. Purchase 5 or more subscriptions for your law fi rm to Law Times or Canadian Lawyer and save 15% Purchase 20 or more and save 1 year $135.00 + gst, go online at www.lawtimesnews.com or call 1-888-743-3551 Special rates for students and international subscribers. 1 Year = $65.00 + gst • 2 Year = $105.00 + gst go online at www.canadianlawyermag.com www.lawtimesnews.com FIRM UP! Digital Editons FREE with each paid subscription Receive the BONUS