LAO seeks funding to fill budget gap

Ontario lawyers say they are concerned more cuts could be on the horizon for Legal Aid Ontario if it does not get further funding from the federal government to plug its deficit.

The provincial government recently released a review, conducted by Deloitte, which found that while LAO had made progress to deal with its budgetary woes, the federal government has pledged just $1.7 million of the $15 million the agency had requested.

The agency, which operates at arm’s-length of the provincial government, announced in December that it was facing a $26-million deficit, spurring the review.

The report found that in order to deal with the shortfall, LAO management has recognized more work is needed to “develop a suite of mitigation strategies” to bring its books to balance.

James Morton, a lawyer with Morton Barristers and past president of the Ontario Bar Association, says he would be surprised if LAO gets the funding it needs from the government and that the remaining shortfall will likely result in a further reduction of services.

“The net result is going to have to be some type of change in the way it operates, whether that means further cutbacks on certificates or conceivably changing their delivery structure, which has been mooted for a long time and a big concern for the defence bar,” Morton says.

In December, LAO announced a number of measures it was taking to curb the deficit, one of which was to scale back certificates issued for accused people who do not face a risk of incarceration.

While lawyers say they believe more cuts could be on the way, David Field, CEO of LAO, says the agency has no plan to implement further cuts on top of what has already been announced.

“The report basically indicated that the only area that is kind of a question mark is refugees and that’s something we’re going to have to work with the federal government on addressing,” he says.

“We’re not anticipating any other changes to our other programs and services.”

An increase in demand for refugee services over the last two years was a big part of what caused some of LAO’s budget deficit, Field says.

He says he is confident the federal government will come through with the funding.

“If you look at the global situation, it’s not likely to go down. So that’s why we really want to engage the federal government on this particular issue,” he says.

LAO officials have batted away the suggestion that the scaling back of certificates for those who do not face incarceration will lead to more self-represented litigants, saying duty counsel continue to offer those services.

Field says this has resulted in more work for duty counsel, but he adds that it has not overwhelmed them so far.

LAO has said that those certificates will be reinstated in 2019/2020.

The report said that since implementing measures to try to deal with the deficit, LAO was still issuing more criminal certificates than it had targeted in February. Field says that LAO is now hitting its targets and that it just took some time for the changes to take effect.

The review said that LAO’s budgetary woes are the cumulative impact of a number of issues, including increases in demand, expanded eligibility and changes to the tariffs LAO pays private bar lawyers.

It also identified a number of risks that LAO will likely face going forward that could affect its financial situation. These included the fact that LAO is in the middle of a collective bargaining process with its staff lawyers.

The report also said that the level of savings LAO was receiving through vacancies “may not be sustainable for a second year without impacting service delivery levels.”

LAO also faces the fact that eligibility was expanded again in April by an additional six per cent. The first of a number of six-per-cent increases was in 2014.

Some lawyers were disappointed by the scope of the review, which did not cover the operational effectiveness of LAO.

“That was an unfortunate decision as it limits the impact of the review. It makes the review very narrow in what it has to say,” says Lenny Abramowicz, executive director of the Association of Community Legal Clinics of Ontario.

“I would have much preferred it to have been a more comprehensive review that looks at LAO’s operations and structures.”

Abramowicz says it would have been more helpful to have a comprehensive review that analyzed issues such as whether LAO is top heavy with management. He says LAO has built up its management in recent years to a significant extent that likely diverts resources from service delivery.

Abramowicz says now that the review is done, it is time for LAO to sit down with stakeholders to ensure services are not going to be impacted further.

Morton says the review was helpful in that it made it clear that LAO had not done anything wrong or spent any money in a frivolous fashion.

“Certainly, when the shortfall became public, there was a lot of muttering . . . about [how] legal aid had wasted its money on too much administration or things like that,” Morton says.
“Reading the review, it’s pretty clear that there was no significant criticism of the way legal aid was operating.”

Anthony Moustacalis, president of the Criminal Lawyers Association, says that while the review did not find any financial improprieties in the decisions the board made, the CLA believes poor policy choices of the past contributed to the shortfall.

LAO has faced criticism from the private bar that it has hired too many managers and staff lawyers, which has led to a bloated bureaucracy.

Moustacalis says LAO hired a significant increase in staff lawyers over the last six years arguably in anticipation of a potential job action by the private bar.

“They’re going to be spending more money on salary and benefits such that they’re anticipating a future deficit position,” he says.

“Our position is that that is unnecessary because they don’t need all the lawyers and managers that they have.”

The number of staff lawyers employed by the agency has risen to 294 in 2016 from 206 in 2012, according to LAO. LAO says the majority of its current staff lawyers are duty counsel who provide direct services and that less than 15 are senior counsel.

“When we hired many of these lawyers, we were looking at situations where it was cheaper to have staff lawyers to deliver services than per diems for example in duty counsel,” Field says. “We don’t have a bloated bureaucracy in this organization and I’m pretty confident in that.”

LAO is anticipating an $11-million deficit for 2017-18, a surplus for the following year, but then a $7-million deficit for 2019-2020. In an emailed statement, Attorney General Yasir Naqvi said LAO has a feasible plan to balance its budget by 2019.

“As the reviewers have pointed out, LAO continues to face a challenging financial situation, in part due to a significant increase in demand for refugee law services,” he said. “I will continue to work with LAO as the organization moves to implement the reviewers’ recommendations, working towards our shared goal of building up Ontario’s legal aid system.”

This story has been updated to clarify that certificates will be reinstated in 2019/2020.

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