Thank you very much, Mr. Chairman and members.
Thank you for inviting me once again. As I expressed to Madame Diotte, I am very grateful that you have come halfway, to the Toronto airport, as last time I had to go the whole way to Ottawa.
Of course, we at LAO don't take a formal position on the merits or otherwise of the proposed legislation. I'm here to respond to the committee's two questions from Mr. MacKay, as I understood them. First is to talk about the anticipated effects on legal aid costs if this bill were passed and implemented. Second is to offer some brief high-level remarks about LAO's general financial situation. The timing is opportune, as we have been in the press this week.
I have been here most of the day, and I heard Chief Blair and the Attorney General this morning. I want to start by recommending to you two of the comments they made this morning.
Chief Blair spoke at length about the guns and gangs prosecutions, the other projects, and the effects they're having in the city of Toronto. He stressed that these prosecutions are having an impact on every part of the justice system. He mentioned that they're imposing tremendous strain on Legal Aid Ontario, and I want to confirm the truth of that statement.
Secondly, when the minister was speaking he supported this bill and said on two occasions that we have to do everything. Legal Aid Ontario supports that statement. We believe that doing everything includes ensuring the defence of these charges, which of course is the statutory right and charter right of the poor accused person facing these charges. I want to support the minister's statement that the defence of these charges is adequately funded.
What we find at Legal Aid is that all justice initiatives create new pressures for more police officers, more jail sentences, longer jail sentences, more wiretap investigations, and more mandatory minimum sentences, which all drive up costs for Legal Aid Ontario, and indeed for all legal aid plans in the country.
When this legislation was first introduced, we in Legal Aid Ontario, working with officials in the Ministry of the Attorney General, tried to calculate what the likely effects on our costs would be. Our best estimate is that this bill will increase costs at Legal Aid Ontario in the range of about $382,000 per year. This is based on hard data and professional analysis. The consensus of Legal Aid and ministry officials is that increased penalties, and especially mandatory minimum penalties, will lead to more trials.
In 2005-06, there were 2,346 firearms charges brought before the courts of Ontario, and particularly before the Ontario Court of Justice--the provincial court that is the level at which all criminal proceedings start. Interestingly, these firearms charges already have a very high trial rate, in that only 17% of accused persons facing these charges actually plead guilty to them. That means in 2005-06 there were approximately 400 pleas of guilty. It's our consensus view that about three-quarters of these cases will likely go to trial as a result of facing mandatory minimum penalties. Additionally, between 2004-05 and 2005-06, we observed that firearms charges increased by about 19% in the Ontario court system.
So in these calculations we assumed there'd be a further 19% increase in 2006-07, which would mean that if the legislation were in effect, there would be 356 extra charges going to trial per year in Ontario. That means 178 new trials, because, on average, in the court system each individual faces two charges, so you take the number of charges and divide it by half to produce the number of individuals who will be going to trial.
For these kinds of offences, approximately 94% of the accused receive a legal aid certificate. For these 178 persons facing these charges, 167 of them are likely to be on legal aid. Looking at our cost data and court data, on average we expect that there will be four days of trial per each case at four hours per day, plus seven hours of preparation time, and therefore a total of 25 extra hours per case.
In total, it's 25 hours times 167 trials times $83.10 per hour, the middle Legal Aid rate, for a total estimated cost of $346,900. In these calculations it's normal to add a factor for administration. Legal Aid Ontario's administration factor is 10%. That produces a total of a little under $382,000. We hope the Minister of Justice will keep that figure in mind when it comes time to renew the federal-provincial criminal legal aid cost-sharing agreement, because that kind of number will be repeated across the country.
The other topic I was asked to comment on was the financial pressures facing Legal Aid Ontario. I know from speaking to colleagues across the country that all legal aid plans are facing financial pressures, but particularly Legal Aid Ontario feels very severe pressure at the present time.
In the short term, you may have been aware of press releases to the effect that as of the end of the first six months of the year, Legal Aid Ontario is $10 million over budget in the certificate program. That is the program that includes criminal coverage. I can tell you that our analysis of that indicates that it is caused significantly by the pressures of the guns and gangs and project prosecutions that you have been hearing about this morning. In fact, we anticipate that without action the cost to Legal Aid could be as much $10 million higher than budgeted for, for the big-case part of our certificate program.
Our budget for that program for this year is about $19 million. At the moment, it looks as if we will be spending $25 million, and if we had taken no action in relation to these charges, we expect we could well be spending as much as $29 million or $30 million this year. In itself, it's a $10 million pressure in this year. That's the short term.
On the longer term, we face ongoing criminal pressures from criminal and family caseloads. Our demand is driven by the number of people coming into the court system. The levels of criminal court activity are rising generally throughout the province.
New court criminal proceedings have risen from 540,000 new charges in 2003-04 to 580,000 in 2005-06, and the increase continues this year, one of the main reasons being the hiring of 1,000 new police officers throughout the province. This means that criminal certificates have risen from under 61,000 two years ago to 65,500 in the same timeframe last year, and that pressure continues intensely.
We operate within a limited budget. We have a targeted number of certificates that we are permitted to issue each year. The increases and the pressures in criminal law are constraining our ability to meet demands in other areas of certificate law, in particular family law.
Family court proceedings are increasing and have risen, for example, by 6% between 2004-05 and 2005-06. This puts increased pressure on the certificate program. In order to manage this, our family law refusal rates--the percentage of people applying for legal aid for family matters--are now at 35% of applicants.
In addition, we face variable revenue levels, and next year we anticipate a reduction in revenue from the law foundation as a result of changes in interest rates and economic activity. We expect there will be a decrease in the realm of $8 million to $10 million.
In recent years, LAO has not had an increase in its core funding. We have absorbed $44 million in inflation and salary increase costs within the same core funding. However, as the Attorney General said this morning, LAO has received an increase of $25 million in its budget in the last four years, but this is in fact funding tied to specific increases in the duty counsel program to fund the creation of the criminal law staff offices and to fund the tariff increases that were passed in 2002 and 2003.
LAO has no reserves or savings left, so we are facing quite a steep precipice immediately driven by guns and gangs and other project cases. This bill will add to the financial pressures we face, and we hope that Parliament will recognize that and approve increased funding for the federal-provincial criminal cost-sharing agreements.
So just to repeat, we face short-term pressures, long-term demand pressures, no increase in core funding, and variable revenues. It's a difficult situation.
Thank you.