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Ontario Court of Appeal confirms employers must prove availability of comparable employment, not merely criticizing the Plaintiff’s job search efforts.
In the recently decided case of Williamson v. Brandt Tractor Inc., 2026 ONCA 272, the Ontario Court of Appeal reinforces a critical limit on the “failure to mitigate” defence in wrongful dismissal cases: employers must do more than criticize an employee’s job search and failure to mitigate their damages; they must prove that comparable employment actually existed.
In this case, the employer argued the employee failed to mitigate by not pursuing similar sales roles. The Court rejected that argument outright. It confirmed that an employer bears a two-part burden:
the employee failed to take reasonable steps to seek comparable work; and
comparable employment was available such that the employee could likely have secured it.
On the facts, neither party provided evidence of available comparable positions that existed during the claimed notice period. That gap was fatal to this argument by the employer. The employee’s decision not to pursue sales roles did not relieve the employer of its burden.
What this Means in Practice
The duty to mitigate remains a cornerstone of wrongful dismissal law. Employees must take reasonable steps to find new, comparable employment to mitigate their damages following dismissal. However, Williamson underscores that mitigation is not judged in a vacuum:
Employees only need to pursue employment opportunities that are truly comparable.
Employers must support their own lack of mitigation argument with evidence that comparable alternative employment existed (e.g., job postings, market data).
The Court may not accept speculative claims about what “might have been available.”
Why it matters for Alberta Employers
Although this is an Ontario Court of Appeal decision and not binding in Alberta, it is likely to be persuasive. Going forward, Alberta courts may adopt this same evidence-driven approach and employers engaged in wrongful dismissal litigation should operate cautiously by collecting and producing evidence of alternative comparable employment in case this same approach is adopted in Alberta.
It can be easy to delay estate planning, including the preparation of a Will, Personal Directive and Power of Attorney. Given the complexities of business assets, Albertans with private businesses can face greater challenges to put their estate affairs in order.
What are the key estate planning documents?
The main estate planning documents are the Will, Personal Directive and Power of Attorney, which are described in greater detail below:
Will – a testamentary document appointing a “personal representative” to pay off debts and distribute property on death. It can include the appointment of guardians for minor children and testamentary trusts for children, dependent adults, or beneficiaries.
Personal Directive – an incapacity document appointing an “agent” to make decisions about matters related to health care, living arrangements, social involvement, and end-of-life matters.
Power of Attorney – an incapacity document appointing an “attorney” to make decisions about matters related to personal and real property, including dealing with Alberta Land Titles, investment decisions, tax filings, and funding for family or personal care.
What happens if I pass with a business?
If you could die while owning a business, a number of questions should be answered when preparing your estate planning documents:
1. What is my transition plan?
Owners may or may not have a detailed transition plan for their business on death. You may wish to transition to a key employee, family member or conduct a third-party sale. Having properly drafted estate and corporate documents are a must.
If you pass with a business in your estate, your Will should address bequests of business assets, including depreciable property, inventory, real property, partnership interests or corporate shares. If you have a family member involved in the business, you may contemplate a specific distribution of assets to your successor.
If the plan involves a corporation with multiple shareholders, a properly drafted unanimous shareholder agreement (“USA”) with detailed buy-sell provisions can ensure a smooth transition between current and future owners. An “estate freeze” can also be a useful tool to bring in a key employee or family member, providing fixed value equity for existing shareholders and growth to new entrants.
Family circumstances like maintenance and support (or property) obligations to a spouse, adult interdependent partner (AIP), or dependent child should be clearly identified and fit within the broader plan.
2. Should the business be sold?
In some cases, business owners will not have a transition plan for an employee or family member. In these situations, a sale of the business to a third party can be a prudent option. Alternatively, a reorganization of the business to isolate “active” operating assets from “passive” investment assets to enhance flexibility can be useful. Proper planning is required in both contexts.
Given the complexities of a business sale or reorganization, it may be advisable to arrange a transaction(s) during the lifetime of the owner to allow the owner to maintain control over the process. If an estate sale or reorganization is contemplated, appointing an institution (trust company) or sophisticated personal representative to handle the transaction(s) can ease the administrative burden on family members.
3. What are the tax implications?
There are many tax considerations to keep in mind when Albertans pass with a business.
Firstly, all capital property (including depreciable capital property) of the taxpayer is deemed to be disposed of at death at fair market value (subject to certain exceptions).[1] In the case of Albertans owning private corporations, capital gains and dividend taxation can create the potential for double tax (see our article on this topic, here).
Other rules related to business assets include, but are not limited to:
Application of capital gains “rollovers”, including the spousal (and spousal trust) rollover and family farm rollover to defer any capital gains tax.[2]
Rollover of class 14.1 depreciable property (goodwill) to defer capital gains on business with “going concern” value.[3]
Use of “rights or things” election on certain items (which if realized or disposed of would have been included in income of the taxpayer) including declared but unpaid dividends, unpaid salary or commission, and cash basis farming inventory.[4]
If a partnership is involved, review any tax implications including potential wind-up of the partnership, allocation of income, and disposition of interests on the death of a partner.
Tax planning opportunities involving corporate USA buy-sell provisions, including the use of corporate owned life insurance to fund the buyout of the deceased partner.
Finally, certain tax exemptions or credits can be applied in an estate context. Eligibility for the lifetime capital gains exemption on qualified small business corporation shares or shares in a family farm corporation or an interest in family farm partnership should be considered.[5] Further, the use of donation tax credits can be considered to defray income and capital gains in the estate.[6]
In all cases, advice should be sought to determine tax implications and to develop a proactive contingency plan.
Conclusion
Owning a business is complex and multifaceted. When planning for your estate with business assets, proper planning should be contemplated and advice sought. You’ve spent years building your business; spending the requisite time to plan your transition and estate plan will be well worth the time.
For more information, please contact Eric Dalke at edalke@walshlaw.ca / 403-267-8454 or any member of our Walsh Tax & Estates team and we would be happy to answer your questions.
Note: This article is of a general nature only. Laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
[1] Subsection 70(5), Income Tax Act, RSC 1985, c 1 (5th Supp) (“ITA”).
[2] Subsection 70(6); Subsection 70(9) and (9.2), ITA.
For years, ESG (Environmental, Social, and Governance) was pitched as the inevitable future of corporate governance, promising to reshape how companies operate, disclose, and allocate capital. Today, that narrative is less certain. In the United States, ESG has become overtly political. In Canada, the shift is quieter, but notable: regulators appear to be cautious, progress is incremental, and investor enthusiasm measured.
This tension is especially visible in Canada’s energy sector, as new pipeline developments, Arctic and Northern projects under federal review, and ongoing resource expansion highlight the challenge of aligning ESG ambitions with economic realities.
I. Canada’s Incremental Approach
Canada has avoided the US-level of ideological polarization surrounding ESG, but it has also avoided fully committing to ESG as a unified legal regime.
Instead, ESG has been integrated, rather unevenly, into existing structures:
Canadian Securities Administrators have proposed climate-related disclosure requirements;
The Office of the Superintendent of Financial Institutions has introduced climate risk expectations through Guideline B-15; and
Regulators continue to align with the Task Force on Climate-related Financial Disclosures.
At the same time, the Competition Bureau has signaled increased scrutiny of environmental claims, reinforcing that ESG-related disclosures must meet traditional standards of accuracy and verifiability.
This approach reflects a preference for incrementalism over transformation. ESG is not being imposed as a distinct legal category, but rather folded into disclosure, governance, and risk oversight frameworks that already exist.
The result is pragmatic, yes, but also somewhat indeterminate. ESG in Canada lacks the coherence of a single regulatory regime, raising questions about whether it meaningfully changes legal obligations or simply reframes them.
II. The Energy Sector and Structural Tension
The Canadian energy sector provides a useful lens through which to assess ESG’s practical limits.
Canada remains economically dependent on oil and gas, even as ESG frameworks emphasize decarbonization and transition risk. This creates a persistent tension between market reality and regulatory direction.
Energy companies must now assess asset viability, disclose transition risks, and detail governance processes around climate issues. On one hand, enhanced disclosure may improve transparency and allow markets to price risk more effectively. On the other, it introduces challenges including forward-looking assumptions about regulatory and technological change, uncertainty in asset valuation, and potential constraints on capital formation in emissions-intensive sectors.
From an energy law perspective, ESG does not resolve these tensions so much as surface them more explicitly, often without offering clear guidance on how they should be reconciled.
III. The Question of Legal Novelty
One of the more underexplored aspects of ESG is how much of it is genuinely new.
Canadian corporate law has long allowed for consideration of stakeholder interests. In BCE Inc v 1976 Debentureholders, the Supreme Court of Canada confirmed that directors may consider a range of factors, including environmental considerations, when acting in the best interests of the corporation.
Many ESG-related risks are already addressed through disclosure, misrepresentation, and competition laws. For instance, the increasing attention from the Competition Bureau to potential “greenwashing” reinforces this point. The issue is not the absence of legal tools, but the application of existing ones to new forms of disclosure.
This raises a legitimate question: does ESG meaningfully expand legal obligations, or does it largely repackage established principles under a new label?
IV. Rebranding ESG as Risk
Recent developments suggest that the latter may be closer to the mark.
The terminology of ESG is gradually giving way to more familiar legal and financial concepts:
ESG strategy becomes risk management;
sustainability commitments become disclosure considerations; and
This shift may reflect a recognition that ESG, as a broad and sometimes ambiguous framework, is difficult to operationalize within legal systems that prioritize clarity and enforceability.
By contrast, concepts like risk, disclosure, and fiduciary duty are well understood. Reframing ESG in these terms does not eliminate its substance, but it does anchor it more firmly within existing doctrine.
At the same time, this rebranding arguably narrows ESG’s scope. What began as a wide-ranging framework encompassing environmental, social, and governance concerns is increasingly filtered through the lens of financial materiality and investor protection.
Conclusion
In Canada, ESG in the energy sector illustrates tensions it cannot fully resolve, between competing priorities such as competing decarbonization goals and market dependence, and between disclosure requirements and uncertainty.
ESG may ultimately prove less transformative in practice than what it hoped to achieve ideologically, but that does not render it irrelevant. Rather, it suggests that its influence will be more incremental, operating within, rather than fundamentally altering, the existing architecture of corporate and energy law.
Whether this practical reality represents a maturation of ESG or a limitation of its ambitions remains an open question.
Contact Us for Assistance
Walsh remains well positioned to assist clients in navigating this evolving landscape. As ESG considerations continue to be integrated into existing legal frameworks, we advise on climate-related disclosures, risk management, governance practices, and regulatory compliance, including in the energy sector. Our approach is practical and business-minded: helping clients meet emerging expectations while managing legal risk and maintaining operational flexibility in an increasingly complex environment.
Article | Carmelle Hunka | December 23, 2025
Alberta Extends Long Term Illness and Injury Leave
Effective January 1, 2026, employers must provide a longer period of long term illness and injury leave to their employees.
The Alberta government has made a substantial change to the Employment Standards Code, increasing the maximum period of long term illness and injury leave from 16 weeks to 27 weeks per calendar year. This change brings the length of this job- protected leave into alignment with other Canadian provinces, including British Columbia, Ontario and Saskatchewan.
To qualify for long term illness and injury leave, employees must have completed at least 90 days of employment with the same employer and must provide a medical certificate confirming the need for the leave due to illness or injury. Employers are not obligated to pay employees during this leave but are obligated to reinstate employees to their previous position or an equivalent one after the leave.
As a result of this extension of the period of long term illness and injury leave, employers are encouraged to review their policies and procedures to ensure compliance with this new legislative requirement. The Employment Law team at Walsh LLP is ready and available to assist.
Employment Team
Carmelle Hunka and Brody Sikstrom
Article | admin | December 2, 2025
Cost Series: Settlement Practices in Alberta: Understanding the Cost Consequences (Part 5)
Settlement offers play a crucial role in civil litigation by enabling parties to resolve disputes without resorting to trial. In Alberta, settlement offers can be made under the common law via Calderbank offers or as formal offers governed by the Alberta Rules of Court, Alta. Reg. 124/2010 (“ARC”). While both avenues are designed to encourage early resolution, they diverge significantly with respect to procedural formalities, legal effect, and cost consequences.
Common Law – Calderbank Offers
Originating from the decision of the English Court of Appeal in Calderbank v. Calderbank, [1976] Fam. 93 (Eng. C.A.)[“Calderbank”], a Calderbank offer is term used to describe a settlement proposal made pursuant to the common law. While historically framed as an offer made “with prejudice as to costs,” the modern articulation of this phrase has evolved to the current formulation ,which settlement offers are tendered on a “without prejudice except as to costs” basis.
The purpose of a Calderbank offer is to promote settlement while preserving the offering party’s ability to rely on the offer in support of a subsequent costs award, should the matter proceed to trial or adjudication.
While Calderbank offers are not governed by the ARC, they remain influential in the Court’s exercise of its broad discretion regarding costs. A party who unreasonably rejects a Calderbank offer, where the offer was objectively reasonable and its rejection resulted in unnecessary litigation, may be subject to adverse cost consequences.
Calderbank offers are a well-established and effective mechanism for preserving a party’s entitlement to enhanced costs in circumstances where a Rule 4.24 Formal Offer is either impractical or procedurally inappropriate.
The salient features of Calderbank offers include the following:
Absence of Automatic Cost Consequences: Unlike formal offers under the ARC, Calderbank offers do not trigger the cost-shifting presumptions codified in Rule 4.29.
Application of Traditional Contract Principles: Counteroffers operate to extinguish the original offer, and an offer may be revoked at any time prior to acceptance unless consideration is provided to keep it open.
Flexible Form of Communication: Offers can be made through letters, emails, or informal discussions.
Strategic Utility: Time-limited offers can create pressure for settlement.
Utilizing the Alberta Rules of Court to Settle
Relying on the ARC, Formal Offers are governed by Rule 4.24 of the ARC and engage the cost consequences delineated in Rule 4.29. These rules establish a more structured framework that incentivizes early resolution by attaching specific cost implications to the rejection of reasonable offers. The essential features of formal offers under the ARC include:
Formal Requirements of Form and Service:
Offers must be made in accordance with Form 22 and properly served on the opposing party; and
The offer must remain open for acceptance for at least two months or until the commencement of the hearing, whichever occurs earlier.
Restriction on Withdrawal:
Unlike Calderbank offers, formal offers may not be withdrawn unilaterally. Court approval is required to withdraw a formal offer once it has been served.
Cost Consequences Pursuant to Rule 4.29:
Plaintiff’s Offer: Where a plaintiff’s offer is rejected, and the plaintiff subsequently obtains a judgment equal to or more favourable than the offer, the court may award the plaintiff double costs from the date of the offer onward; and
Defendant’s Offer: Where a defendant’s offer is rejected and the plaintiff obtains a judgment less favourable than the offer, the defendant may be entitled to costs from the date of the offer forward.
Strategic Advantages:
Formal offers encourage parties to engage in meaningful negotiations at an early stage, and deter unreasonable litigation conduct through the threat of adverse cost consequences; and
The court retains discretion to decline enforcement of cost penalties where the offer was not a genuine compromise or was otherwise unreasonable in the circumstances.
Court Retains Discretion
When parties exchange settlement offers, whether as formal offers pursuant to Rule 4.29 of the ARC or as Calderbank offers, the courts retain discretion to consider these offers in the assessment of costs. A formal offer to settle that is not accepted, and is ultimately more favourable than the judgment obtained, may entitle the offering party to “double costs” under Rule 4.29 of the ARC, subject to judicial discretion. Although not automatic, this rule creates a rebuttable presumption in favour of such an award, thereby encouraging litigants to make reasonable settlement proposals and to seriously consider those received.
Comparative Analysis
Feature
Calderbank Offers
Formal Offers (Rule 4.24)
Authority
Common law – contract
Alberta Rules of Court
Cost Consequences
Discretionary (via Calderbank principles)
Defined and presumptive under Rule 4.29
Withdrawal
May be revoked at any time before acceptance
Requires court permission to withdraw
Effect of Counteroffer
Terminates original offer
Does not terminate original offer
Flexibility
Highly: oral or written
Must be in writing using prescribed form
Court Consideration
Considered as part of litigation strategy
Engages presumptive costs consequences
Conclusion
Settlement offers, whether made at common law or pursuant to the formal structure under the ARC, constitute powerful instruments within the litigation process. Common law offers offer flexibility and strategic value, particularly where informality is preferred or formal compliance is impractical. By contrast, formal offers create a defined procedural regime with the potential for substantial cost consequences, thereby incentivizing parties to assess the risks of continued litigation.
In determining which approach to adopt, litigants and counsel must consider a range of factors including procedural posture, litigation strategy, risk tolerance, and the likelihood of success at trial. Above all, parties must remain cognizant of the cost implications that may arise from either making or rejecting a settlement offer, particularly where such offers are objectively reasonable and consistent with the principle of proportionality.
You’re reading Part 5 of our Costs series. Continue below:
Over the past several decades, successful litigants have routinely argued that Schedule C of the Alberta Rules of Court does not adequately reflect the true costs of litigation and have sought enhanced costs awards as a result.
As discussed in our prior publications on costs (see Parts 1, 2, and 3 of our Costs Series), the Court retains broad discretion in determining an appropriate costs award following a trial or application. While Schedule C provides a standardized framework for partial indemnification of legal fees and disbursements, it often fails to capture the full financial burden borne by a litigant engaged in contested proceedings.
Historically, Alberta courts applied Schedule C in a relatively rigid fashion. However, the Alberta Court of Appeal’s decision in McAllister v Calgary (City), 2021 ABCA 25 (“McAllister”), marked a significant shift from that approach.
In McAllister, the trial judge declined the plaintiff’s request for an award representing 40-50% of his actual legal fees and instead awarded costs under Column 3 of Schedule C in the amount of $70,294.70. This figure stood in sharp contrast to the plaintiff’s total legal fees of $389,711.78. On appeal, the Court of Appeal held that Schedule C is only one of several methods available for assessing costs and cautioned against its routine and uncritical application. The Court confirmed that trial judges may, in the exercise of their discretion, award 40-50% of reasonably incurred legal fees, provided that the fees were properly incurred and no aggravating or mitigating factors are present.
The rationale underlying the Court’s departure from Schedule C in McAllister was its conclusion that Schedule C did not adequately reflect the reasonable and necessary costs incurred by Mr. McAllister in the litigation. The Court reaffirmed that the central consideration in deciding whether to depart from Schedule C remains whether the costs claimed by the successful party constitute “reasonable costs, reasonably incurred.” A departure from Schedule C must therefore be justified by exceptional circumstances, such as the complexity of the matter or misconduct by one of the parties during the litigation process.
Two years later, following in the wake of McAllister, the Alberta Court of Appeal further refined this analytical framework in Barkwell v McDonald, 2023 ABCA 87 (“Barkwell”). Building upon the principles articulated in McAllister, the Court reaffirmed that judges retain broad discretion to award “reasonable and proper costs,” which may be calculated under Schedule C, as a lump sum, or as a percentage of the legal fees incurred. The decision in Barkwell provided additional clarity for litigants regarding the framework governing lump sum and percentage-based costs awards.
Importantly, the Court in Barkwell clarified that the frequently cited 40-50% guideline is not necessarily tied to the actual legal fees paid by the client. Rather, it reflects what legal costs would have been reasonably incurred in the circumstances of the case. Although the Court acknowledged that the prevailing “rule of thumb” suggests that an award of costs should typically fall within 40-50% of the legal fees incurred by the successful party, it emphasized that this benchmark must rest on an objective assessment of what fees were reasonable, rather than what amounts happened to be paid.
The Court also emphasized that proportionality remains the overarching consideration in any costs award. A party seeking a lump sum or percentage-based award must demonstrate that the costs claimed are both reasonable and proportionate, having regard to the circumstances of the case. This assessment must be guided by the factors enumerated in Rules 10.2 and 10.33 of the Alberta Rules of Court, including the importance and complexity of the issues, the nature and extent of the legal services provided, the conduct of the parties, counsel’s rates, and the manner in which the legal work was performed. The Court reiterated that success in litigation, while relevant, cannot justify an excessive or disproportionate award of costs: “success is not a justification for disproportionate litigation.”
The decision in Barkwell further reinforced the procedural expectation that a draft Bill of Costs based on Schedule C should be provided, even when a party seeks an elevated or percentage- based award. Schedule C continues to serve as a foundational reference point that enables the Court to assess whether the quantum of costs claimed is both reasonable and proportionate. In Barkwell, the trial judge erred by awarding 50% of the respondent’s legal fees without undertaking a sufficiently rigorous inquiry into the reasonableness of those fees or engaging with Schedule C. The Court of Appeal stressed that McAllister does not authorize percentage- based awards in the absence of a principled and analytical framework.
Conclusion The decisions in McAllister and Barkwell represent a meaningful evolution in the jurisprudence governing costs awards in Alberta. While Schedule C remains the starting point for assessing costs, the courts have shown a growing willingness to depart from its strict parameters where circumstances justify enhanced compensation. McAllister confirmed the availability of costs awards representing 40-50% of reasonably incurred legal fees as a general guideline, while Barkwell clarified the evidentiary and procedural foundations required to support such awards.
Going forward, counsel seeking elevated costs must ensure that their submissions rest on compelling arguments supported by a proper evidentiary foundation, as articulated by the Court of Appeal. Absent adherence to these principles, efforts to obtain enhanced costs are unlikely to succeed.
For further details or specific inquiries please contact:
The transition from a developer-controlled board of directors to an owner-controlled board of directors is one of the most important milestones in a condominium project. In Alberta, this “turnover” process is governed by the Condominium Property Act, RSA 2000, c C-22 (the “Act”) and the Condominium Property Regulation, AR 168/2000 (the “Regulation”). Developers, owners, lenders, and condo boards all have a stake in ensuring that the first annual general meeting (the “AGM”) is conducted properly and in accordance with the Act and Regulation, as failure to comply can lead to costly disputes.
The Act requires that when a developer registers a condominium plan, the developer shall, within 90 days from the day that the certificates of title to units representing 50% of unit factors have been issued in the name of the purchasers, convene a meeting of the condominium corporation at which a board must be elected. This is referred to as the “Turnover Meeting”. If the developer does not convene a meeting of the condominium corporation within the aforementioned time period, an owner may convene the meeting. At the Turnover Meeting, the developer must hand over the following documents and records that the newly elected condo board needs to govern the condominium effectively:
all warranties and guarantees on the real and personal property of the condominium corporation, the common property and managed property;
structural, electrical, mechanical, and architectural working drawings and specifications;
all agreements to which the condominium corporation is a party;
any building assessment reports and reserve fund reports;
proposed budget and financial statements of the condominium corporation;
condominium plan and bylaws; and
any other prescribed document under the Regulation.*
*please note the above list is not an exhaustive list of items that need to be provided at the Turnover Meeting. For a list of all items required to be delivered, please refer to section 16.1(1) of the Act and section 20.2(1) of the Regulation.
Common issues related to Turnover Meetings include: failing to call the AGM on time, incomplete financials, not disclosing all contracts, and failing to provide the technical building documents. The best way to avoid costly disputes and litigation for a developer is to ensure transparency and compliance. Such transparency and compliance suggests that a developer should keeping clear and separate financial records from day one, engaging qualified auditors and reserve fund consultants early, providing disclosure as per the Act, etc.
The Turnover Meeting is more than just a formality, it is the legal and practical handoff of responsibility from the developer to the owners. Done properly, it builds trust and sets the foundation for a well-run condominium corporation. Done poorly, issues may arise.
For more information, please contact Usama (Sam) Rashid at urashid@walshlaw.ca or any member of our Walsh team and we would be happy to answer your questions.
Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
The use of a trust in any estate plan can be a helpful tool. Clients ask about trusts, what they are, how they are created, and how they can be used to achieve estate planning objectives.
What is a Trust?
A trust is a legal relationship between a person (the “Settlor”) who transfers property to someone else (the “Trustee”) to manage the property for another person (the “Beneficiary”). There are three certainties which must be met to establish a trust:
Certainty of Intention – clear intention of settlor to “settle” the trust;
Certainty of Subject Matter – trust property must be certain; and
Certainty of Object – beneficiaries must be certain.
If any of the certainties are missing, a trust will not be created. Settlor incapacity, unclear terms about who is a beneficiary, or failure to identify trust property are examples where a trust may not be created.
Types of Trusts
An “inter vivos”trust is created when the settlor is alive and involves a trust instrument to create the trust. A “testamentary”trust is created on the death of the testator, pursuant to the terms of the deceased’s Will. Trusts can also be “discretionary” or “non-discretionary” giving more or less discretion to the Trustee as to how the trust property is managed.
Common Uses
While not exhaustive, some common uses of trusts are:
Manage assets for minors or dependent (i.e. disabled) beneficiaries;
Control distribution of assets to an “irresponsible” or “unsophisticated” beneficiary;
Hold business or corporate assets to manage income and capital distributions and achieve tax savings (including multiplication of lifetime capital gains exemption);
Provide support to spouse while protecting assets for children of the settlor/testator; and
Provide privacy or avoidance of probate disclosure and fees.
Taxation of Trusts
Generally, transfer of property to a trust will trigger a disposition for tax purposes1. Trusts must report annual trust filings in a T3 trust return. Trusts are taxable at the highest marginal rate, unless they qualify as a Graduated Rate Estate (“GRE”)2. Many trusts are deemed to dispose of property every 21 years, subject to exceptions.3 Trust residency issues must be considered, including avoidance of appointing non-resident trustees.
Despite these complexities, certain tax benefits can be achieved. These include income distributions to beneficiaries (including those in a lower income bracket), using a trust in an estate freeze to enable deferral of capital gains tax on corporate shares, or the multiplication of the lifetime capital gains exemption (“LCGE”) on a disposition of shares.
Proper planning should be conducted including reviewing varied tax considerations in setting up a trust.
Conclusion
There are many considerations in setting up a trust, including settling a trust during your lifetime or in your Will. Legal and accounting advice should be consulted throughout the process to best reflect your wishes and protect your assets.
For more information, please contact Eric Dalke at edalke@walshlaw.ca / 403-267-8454 or any member of our Walsh Tax & Estates team and we would be happy to answer your questions.
Note: This article is of a general nature only. Tax laws may change over time and should be interpreted only in the context of particular circumstances. These materials are not intended to be relied upon or taken as legal advice or opinion.
1 Exceptions to this rule exist including transfers to alter ego or spousal trusts.
2 Subsection 122(1), Income Tax Act, RSC 1985, c 1 (5th Supp) (“ITA”).
3 Exceptions to this rule include spousal trusts or alter ego trusts; deemed disposition of property can also be managed through a tax-deferred transfer to beneficiaries under subsection 107(2), ITA.
Article | Locklyn Price | July 14, 2025
(More) Swift Justice – The Alberta Court of King’s Bench Introduces Measures to Reduce Civil Trial Duration and Delay
The Alberta Court of King’s Bench has long contended with extended wait times in civil matters—often a year or more between the conclusion of pre-trial steps and the trial itself. In a decisive move to address this backlog, the Court has issued a Notice to the Profession and Public1 and an Announcement2 aimed at accelerating litigation and compelling parties to set trial dates much earlier in the process.
New Expectations: A 36-Month Backstop
Effective immediately, the Court now expects all civil actions to be set down for trial within 36 months of the service of the first Statement of Defence. This new “backstop” is intended to push actions forward more efficiently, limiting the previous flexibility often granted due to party or counsel availability. Extensions beyond the 36-month period will only be considered in “exceptional circumstances.”
Litigation Plans Now Mandatory
As of September 1, 2025, all litigants are expected to agree on a litigation plan within four months of the service of the first Statement of Defence. These litigation plans must chart a course for resolving the matter within the 36-month timeframe. The requirement promotes early cooperation between parties and ensures that the timeline to trial is top of mind from the outset of litigation.
Court Deadlines: Compliance or Consequences
The Court has reiterated that parties are expected to meet deadlines under the Alberta Rules of Court or as otherwise agreed between counsel. The announcement signals a shift toward stricter enforcement, with potential consequences for delay, particularly where the delay results from failure to meet procedural obligations. The message is clear: litigants and their counsel must treat timelines as mandatory, not aspirational.
Conclusion
These new measures mark a significant cultural and procedural shift in Alberta civil litigation. With the Court taking a firmer stance on delay, counsel must proactively develop litigation plans and prepare for trial scheduling earlier than before. The reforms are aimed at delivering timelier access to justice and reducing the inertia that has historically plagued the civil system. The impact on client’s, and litigants in general, is that matters which would traditionally take several years now will be compelled to be resolved quicker and, at the latest, within 3 years.
1 The Alberta Court of King’s Bench, Notice to the Profession and Public NPP2025-02, July 10, 2025.
2 The Alberta Court of King’s Bench, Announcement – Reducing Civil Trial Delay, July 20, 2025.
For further details or specific inquiries as to how these changes will impact your current or future litigation please contact:
Court of Justice and the Recovery of Costs and Disbursements
As detailed in our prior article, Understanding Costs in Alberta’s Litigation Process (Part 1), litigation costs in the Court of King’s Bench are typically awarded on a partial indemnity basis, guided by Schedule C of the Alberta Rules of Court (“ARC”).
Effective January 1, 2019, the Alberta Court of Justice instituted its own Tariff of Recoverable Costs (the “Tariff“), which serves as a guideline for determining the costs that may be awarded in its proceedings.
On July 31, 2023, the Court of Justice updated its Tariff of Recoverable Costs, which is detailed in Practice Note 3 – Costs in the Alberta Court of Justice Civil Division. The Tariff remains “a guide to costs that may be awarded”.
In alignment with the Court of King’s Bench, the Alberta Court of Justice (formerly known as the Provincial Court) has four general types of costs:
Party and Party costs;
Lump Sum costs;
Solicitor Client costs; and
Enhanced costs.
Party and Party Costs
Party and Party costs are governed by the 2023 Tariff of Recoverable Costs, which assigns specific cost amounts for various stages of litigation based on the claim value.
Typically, these costs allow a litigant to recover between 20-25% of the actual legal expenses (see Legare v Acme (Village), 2023 ABKB 278).
The award of such costs is discretionary and is influenced by factors such as:
The outcome of the case;
The complexity of the litigation;
The conduct of the parties during the proceedings; and
Whether the litigation was unnecessarily prolonged.
Lump Sum Costs
Lump sum costs represent fixed amounts awarded in lieu of calculated costs under the Tariff. They provide a streamlined approach to awarding costs, without requiring extensive itemized calculations.
Such costs are typically awarded where:
The court deems the calculation of individual costs impractical;
There is a desire to encourage a cost-effective resolution of disputes; and
The lump sum award is at the court’s discretion (see Varshney v 864475 Alberta Ltd., 2025 ABCJ 26).
Solicitor-Client Costs
Solicitor-client costs are awarded on a full-indemnity basis, covering all reasonable legal fees and disbursements incurred by the prevailing party. However, these costs are rarely granted and are generally reserved for cases involving egregious misconduct (see Aman Carrier Ltd. v. 1746446 Alberta Inc., 2015 ABQB 344).
Solicitor-client costs may be awarded in exceptional circumstances, such as:
Litigation misconduct (e.g., delay tactics, false testimony, and failure to comply with court orders);
Fraudulent conduct (e.g., falsification of documents or deceitful claims);
Obstruction of justice (e.g., concealing evidence); or
Malicious or vexatious litigation, where a party abuses the legal process.
Enhanced Costs: A Special Category
Enhanced costs may be awarded in certain cases where a party’s conduct:
Causes significant delays in the proceedings;
Involves bad faith litigation; or
Unnecessarily increases costs for the opposing party.
Enhanced costs exceed the standard tariff rates, but do not provide the full indemnity granted by solicitor-client costs (see Cyr v Bryce-Burns, 2025 ABCJ 6).
Examples of Conduct Leading to Enhanced Costs:
Refusing to provide disclosure or evidence;
Making unsubstantiated claims of fraud or misconduct; or
Filing frivolous lawsuits or counterclaims to harass the other party.
Recoverable Litigation Expenses (Disbursements)
In addition to legal costs, certain disbursements (out-of-pocket litigation expenses) are recoverable under Section 39 of the Provincial Court Civil Procedure Regulation. These expenses include:
Mandatory Court Fees
Filing fees as per the Provincial Court Fees Regulation; and
Fees for issuing subpoenas, court transcripts, and trial-related documentation.
Service Fees
Fees paid to process servers for delivering court documents to the opposing party.
Government Registry Searches
Fees for conducting searches at the Land Titles Office, Corporate Registry, or Personal Property Registry.
Expert Witness Fees
Preparation of expert reports;
Time spent in court by expert witnesses; and
Reasonable expenses incurred by expert witnesses for attending trial.
Witness Attendance Allowance
Regular witnesses: $25 per day plus travel and accommodation costs; and
Expert witnesses: $50 per day plus travel and accommodation costs.
Additional Litigation Expenses
Photocopying and document preparation fees;
Court-ordered costs for translations or transcriptions; and
Reasonable costs of travel and accommodation if a witness or party had to travel for the hearing.
Judicial Discretion in Awarding Disbursements:
The court may reduce or disallow expert witness fees if:
The expert’s testimony was unnecessary or redundant;
The expert was not properly qualified; or
The expert failed to provide useful or relevant evidence.
Conclusion
The Alberta Court of Justice employs a structured approach to awarding costs, with the 2023 Tariff of Recoverable Costs providing guidance for party and party cost calculations. The court retains discretion to award enhanced or solicitor-client costs in cases of misconduct, while recoverable disbursements cover necessary litigation expenses.
If you have any questions or concerns after reading this article, or if you need guidance regarding costs and disbursements in the Alberta Court of Justice, please contact Walsh LLP and speak with a member of our litigation team. We are here to help you navigate the litigation process with clarity and confidence.
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