What is Alberta Law Foundation and why was it created?

The Alberta Law Foundation (the Foundation) was created in 1973 by the Legal Profession Act (the Act). The Foundation was established with a clear purpose: to manage the interest earned on lawyers' pooled trust accounts. This money belongs to any Albertan that has ever paid money into a lawyer’s trust account – for example, for the purchase of their home. Rather than letting these funds benefit financial institutions or disappear into general revenue, the Foundation ensures they serve a higher purpose - improving access to justice for all Albertans.

How does the Foundation receive its revenues?

The Foundation's revenue comes from interest earned on lawyers' pooled trust accounts (IOLTA), making it subject to Canada's prime interest rate and, therefore, highly volatile.

What does the Foundation do with the revenue it receives?

The Foundation is the primary funder of access to justice initiatives across the Province, providing grants to over 65 community-based organizations that support everyday Albertans and vulnerable populations accessing, or involved with, the legal system. The Act sets out the following objects of the Foundation:

• Legal research and law reform
• Law libraries
• Public legal education
• Indigenous people's legal programs, student legal aid programs and programs of like nature
• Contributing to the costs of Legal Aid Alberta

Why were the Foundation’s objects not originally drafted to include Legal Aid?

Foundation funds are to be used broadly to improve legal processes and access to justice, not as a substitute for government obligations to fund Legal Aid Alberta (LAA) nor to otherwise make up for government funding shortfalls. The legislative history makes clear that LAA was intended to be funded through the Province's general revenue and supplemented by federal contributions. The legal profession wanted to avoid perceptions of financial self-interest if funds were directed back to lawyers through LAA.

What is the Foundation’s role in funding Legal Aid Alberta now?

As detailed above, the Foundation’s objects were not originally drafted to include Legal Aid. However, in 1991, in response to a similar funding shortfall faced by the government at the time, the Act was amended to require 25% of the IOLTA revenue the Foundation receives to be paid to LAA.
The current 2024-2029 Governance Agreement Respecting Legal Aid Alberta states that Foundation contributions are intended to be paid into LAA's contingent reserve. The Foundation contributions are not intended to be allocated to LAA's operations because of the volatility of the Foundation's annual revenue and because, in most years, these contributions are relatively modest.

How much funding has the Foundation contributed to Legal Aid Alberta?

Since 1991, the Foundation has contributed over $240M to LAA through statutory and special contributions, with over $90M of this total contributed since 2020

The chart shows the historical anomalies of the 2023 (~$22.6M) and 2024 (~$39M) contributions due to the sustained record high of the prime interest rate in effect at the time. The average of the other 32 years, from 1991 to 2022, shows an average annual contribution of less than $4.2M.

Isn’t increased funding for Legal Aid a good thing?

The Foundation believes in the value of an independent and effective legal aid program to ensure that the most vulnerable Albertans have access to the legal supports they need. However, an increase in the Foundation's statutory contribution does not lead to a commensurate increase in LAA's budget nor enhancement of its services; it merely reduces the government's contribution, ultimately leading to an overall net decrease in resources to the justice sector.
As shown above, the Foundation's modest average annual statutory contribution, even if it were to be doubled, renders it an especially unattractive and inadequate source of revenue for LAA. Without addressing systemic challenges in LAA funding, the burden will eventually fall back on the Provincial government, exacerbating fiscal pressures and likely leading to budgetary shortfalls for LAA in the future.

What other types of initiatives does the Foundation fund?

For a full list of the programs that the Foundation currently funds, please see our grants awarded page.

How does this proposed increase to the statutory contribution affect the rest of the access to justice sector?

While increasing the Foundation's statutory contribution may offer short-term relief to the provincial government, it will have severe long-term consequences. The Foundation has already committed to significantly increase its funding to community legal initiatives in the current fiscal year:

• $45 million in funding has been committed halfway through fiscal year 2024-2025
• An additional $20-25 million in commitments is projected before the year's end, bringing total planned grants to $65-70 million – more than three times the amount granted in the previous fiscal year

These commitments support programs and services that are not covered under LAA's 27 enumerated services, such as community and student legal assistance, legal research and law reform, Indigenous legal initiatives, restorative justice and public legal education and information. Without this funding, many organizations providing essential services and resources will be forced to reduce or eliminate programs, leaving gaps in critical legal supports across the Province – including rural regions. An increased statutory contribution to LAA will divert funds away from these programs, which would disproportionately impact vulnerable communities, including newcomers, low-income Albertans, and victims of sexual assault and domestic violence.
If the Foundation's funds are diverted to LAA, these organizations will face uncertainty and potential closure, leading to widespread instability in Alberta's justice sector. The resulting service gaps will likely create increased pressure on the provincial government to fund and manage programs that are currently sustained through the Foundation. Over time, this will result in additional financial burdens on the Province, as government resources will need to be reallocated to address unmet needs.

The Foundation appears to have robust reserves. Why can’t it withstand an increase in funding to LAA without impacting the rest of the sector?

Irrespective of the size of the Foundation’s reserves, these funds do not belong to the government and are not for the government to take.
The Foundation is subject to extreme volatility in its annual revenue. To illustrate, in 2020-2021, the Foundation received IOLTA revenue of $6.9M. In 2023-2024, IOLTA revenue was nearly $156M. Because of this volatility, the Foundation is required to bank surpluses when interest rates are high to stabilize funding in years when interest rates are low. The Foundation has four reserves:

• Grant Stabilization Reserve – ensures the stability of current grantees' funding levels in future years when net revenues are inadequate and is set at four times the closing year's allocated operating grants.
• Strategic Reserve – represents amounts which are reserved for long-term strategic purposes.
• Large Projects Reserve – represents amounts which are reserved for one-time, multi-million dollar projects or initiatives that are outside of the Foundation's regular granting processes.
• Future Year Grants Reserve – represents the amount of grants committed to be funded in future years.

With the record high revenues received in 2023-2024, the Foundation responded swiftly to mobilize more granting into the community. The result, halfway through 2024-2025, is a record $45M in granting made, with a projected additional $20-25M to follow in the latter half of the year, representing more than three times the total amount granted in the previous fiscal year. This significant increase in total granting will necessitate a commensurate increase to the Foundation's Grant Stabilization Reserve.
The Foundation is nearing the final approval of a transformative project, whereby up to $100M has been earmarked in 2025 for the construction and endowment of an Indigenous Law Centre.
This comes on the heels of the University of Calgary announcing a $26.8M gift from the Foundation to fund the Centre for Transformation at the University of Calgary and two new research chairs to transform the family justice system. Learn More.
The Foundation's ability to enter into partnerships and fund initiatives of this magnitude, with the potential for real transformation, is only possible because of the reserves that the Foundation has built up over time.

How is Legal Aid funded in other Canadian jurisdictions?

Aside from Alberta, only three other Canadian jurisdictions have a required statutory contribution from their law foundation to their legal aid entity – Manitoba (50%), Ontario (75%) and Newfoundland & Labrador (66.67%). The primary difference between these jurisdictions and Alberta is that, with these contributions, these legal aid entities also fund the network of their province's community, specialized and student legal clinic organizations. In Alberta, the Foundation is the sole or primary funder of these legal clinics – Calgary Legal Guidance, Community Legal Clinic – Central Alberta, Edmonton Community Legal Clinic, Lethbridge Legal Guidance, Student Legal Assistance (University of Calgary), and Student Legal Services (University of Alberta).
More than two-thirds of Canadian jurisdictions fund legal aid entirely through government revenues, without any reliance on law foundation contributions for core operational funding. Alberta's current structure already places a disproportionate burden on the Foundation, making further increases both unusual and unjustified.