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Chair's Report 2007
FINANCIAL HIGHLIGHTS
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2007 |
2006 |
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| Revenue |
$ 55,817,407 |
$ 22,220,714 |
| Grant allocations / Adjustments |
13,841,614 |
8,739,445 |
| Legal Aid Society |
13,374,431 |
5,536,939 |
| Administration |
430,032 |
353,566 |
| Excess (deficiency) |
$ 28,171,330 |
$ 7,590,764 |
At fiscal year end the Directors elected to transfer additional
funds from unrestricted net assets to the Grant Stabilization Fund. The restricted asset account has been established
in order to allow funding stability for ongoing programs that
otherwise could be adversely affected by volatile fluctuations
in both the prime rate and the average balances in lawyers’
general trust accounts. The Foundation was able to top up
the Grant Stabilization Fund to the full extent of our
internal reserve policy. In addition, for the first time, the Directors were able to set aside an amount of $20,000,000 in a long-term Strategic Reserve. This left a remaining unrestricted net asset balance
of $4.5 million at year end, which includes the recognition of $6.4 million in accrued interest revenues.
The Board reviewed 115 regular applications for funding (87
last year) of which 98 were approved (73 last year). In addition,
the Board reviewed 23 Special Project Fund applications (17 last year), of
which 15 were approved (12 last year).
In accordance with the Insurance Act, the Foundation’s funds are kept invested in short-term money market instruments and low-risk marketable securities. Income from investments for 2006-07 was $2,226,304 an increase from last year's investment income of $1,236,740.
Lawyers' general trust account interest earned in 2006-07 totalled $53,497,726, which is a significant increase from last year's receipts partly due to the higher average prime rate through the entire fiscal year. The greatest impact was due to higher average balances in the lawyers’ general trust accounts, owing to the continuing robust provincial economy. These balances are expected to remain high for the balance of this year. In response, the Directors were able to increase overall grant approvals by approximately 56% over the prior year, in addition to completing grant approvals under the $1.5 million Special Project Fund established in 2006. The availability of a substantial reserve will now permit consideration for a comprehensive survey and needs assessment in the province related to both public legal education and legal service delivery. A better general understanding of the landscape within the broad concept of “Access to Justice” is intended not only to allow the Directors to better understand the needs and priorities that fall within the Foundation’s legislated objectives, but also to consider what organizational or agency models, or provincial infrastructure, would support the addressing of those needs and priorities on an effective, efficient and long-term sustainable basis. In that regard the expectation is to work closely with the other major stakeholders in this area, including the staff of Alberta Justice and Legal Aid. The Directors recognize the need to prudently manage expectations related to this recent significant rise in revenues, with a view to ensuring the solid merit and sustainability of any new grant funding initiatives.
General Comments
As noted above, revenue from lawyers' general trust accounts for the fiscal year ending March 31, 2007 was $53.5 million. 25% of this revenue source is due to the Legal Aid Society of Alberta. In the latest fiscal year the payment due to Legal Aid amounted to $13.37 million.
The Directors of the Foundation have now established financial reserves in the Grant Stabilization Fund sufficient to allow approximately three years of stable funding for core grant recipients, thus enabling them to better plan for the future. During 2007-08, it is expected that once again some core grantees will merit further strategic increases in their existing core program capabilities, and in some cases to also undertake new program initiatives. Project grant applications will continue to be given due consideration. Because it is difficult to predict interest rate trends and other economic factors, the Foundation reviews annually its core funding budget and other funding initiatives.
The Foundation continues to take seriously its stewardship role in relation to the total trust deposits held in general trust accounts at the various financial institutions. In March 2007, the consolidated average balances in the Province of Alberta exceeded $1.7 billion. The Foundation believes these deposits should receive fair market-based interest compensation, and endeavours to negotiate competitive banking arrangements with all the financial institutions.
I am very pleased to recognize Canadian Western Bank and Scotiabank for a notable recent improvement to their banking arrangements for lawyers’ general trust accounts. The only institution to steadfastly refuse to pay a reasonable interest rate continues to be the National Bank of Canada, with the result that the shortfall in annual interest revenue to the Foundation amounts to well over a million dollars per year. The Foundation and its many funded community agencies are most appreciative of the leadership and support of the cooperative financial institutions.
I would like to express my appreciation to the Foundation's
Board of Directors and to the staff, David Aucoin and Diana
Porter, for their guidance of the Foundation over the past
year.
All of which is respectfully submitted.
Steve Raby, Q.C.
Chair
Alberta Law Foundation
July 2007
Archived Reports
Page Updated: July 2007
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