Sunday News Roundup 22.03.27: Liberal NDP tax deal, carbon tax, acting senior and more
Wrapping up the odds and ends in this week’s Canadian accounting news
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TORONTO, March 27, 2022 – The news cycle was dominated this week by the surprise deal between the Liberals and the NDP to preserve the Liberal minority government. The confidence-and-supply agreement will allow the Liberals to govern until 2025, contingent on the implementation of a negotiated list of policies and priorities promoted by the NDP.
The deal is sure to irritate most Canadian accountants, the majority of whom traditionally support Conservative politicians, including the People’s Party of Canada in 2021, as further evidence of fiscal recklessness by the governing Liberals. However, the agreement also includes two “fairer tax system” policies specifically related to taxation: 1, tax changes to financial institutions who have made strong profits during the pandemic; and 2, implementing a publicly accessible beneficial ownership registry by the end of 2023. (Read Delivering for Canadians Now, A Supply and Confidence Agreement.)
Victor Dodig of CIBC is leading the charge against the banking sector surtax. Dodig has earned a controversial reputation as a critic of the Liberals who is quick to support the business sector over social policies. As for the beneficial ownership registry, the Liberals have long been accused of dragging their feet on policies that would create further transparency into foreign capital inflows into Canada.
And now, on to the rest of the odds and ends from the past week in news from the world of Canadian accounting.
How costly is the carbon tax to Canadians?
With the war in Ukraine, Canadians are already paying substantially more to gas up their cars at the pumps, and pointing fingers at the carbon tax as an additional burden. This past week, Parliamentary Budget Officer Yves Giroux added fuel to the flames, so to speak, by releasing a new report on the cost of the carbon tax to Canadians.
Giroux has generated a lot of headlines over the past two years and some have seemed conflicting. In 2020, he said the carbon tax will give more than it takes for most households, and later that year said the tax must rise if Canada is to meet Paris emission targets. This past week, he dropped a report saying that, once all the indirect effects of the carbon tax were accounted for, the top 60 per cent of households experience a net loss. While Sun Media was quick to jump on the news, the Globe and Mail noted Giroux’s report did not account for the benefits of a green economic transition.
CRA’s tax season error causing seniors stress
An administrative T4A tax slip error by the Canada Revenue Agency to a “limited number” (67,797) of OTP recipients has caused a lot of stress among seniors. According to outlets such as Global News and CTV, Canadian seniors are watching their mailboxes with dismay, fearing that much-needed benefits will be missed if the One-Time Payment error causes them to delay their tax filing. For its part, the CRA says the error has been corrected, but tax preparers are concerned about their clients.
CPAB seeing more audit issues with new companies, models
Canada’s audit regulator, the Canadian Public Accountability Board, recently released a new document detailing its displeasure with audit issues at new companies. These kind of releases are always worth paying attention to — there is a current lawsuit in BC courts, for example, in which the plaintiff (a crypto company) alleges CPAB guidance caused a chilling effect among auditors.
In this statement, CPAB emphasizes “the need for auditors to be open to the possibility that transactions may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.” The document reminds auditors of the new CSQM standards with a deadline of December 2022. (For more on CSQM, read Kirsten Albo’s four-part series in Canadian Accountant.)
OECD Pillar Two comes under scrutiny
Allan Lanthier was in Wednesday’s Financial Post, calling on business sector organizations to “just say no” to the OECD, and the complex rules recently released around Pillar Two. If you want to read Allan’s more technical analysis, read his commentary in Canadian Accountant. Despite the new rules being “brutally complex,” the Financial Post article explains the issues to a general readership, while our article is more suited to our readership of CPAs.
Reddit: Acting seniors during a busy tax season
And, if you’re so inclined, the most popular Canadian accounting topic of the week on Reddit was a Big Four associate complaining that they were “acting senior” on files because the firm was understaffed. Responses ranged from “welcome to the club” to “demand to be promoted or quit” to “use the experience to get a job in the private sector.”
Pride Toronto apologizes after review finds it wasn't transparent with $1.8M in grants (CBC)
Which countries are top for privately-held wealth? (Wealth Professional)
Canadians split on raising taxes for defence spending: poll (CTV)
Adding PST to gym memberships a 'slap in the face', says president of fitness franchise (CBC Saskatchewan)
Families in Quebec that earn $100,000 or more face highest tax rates nationwide (Financial Post)
By Canadian Accountant staff.