Friday News Roundup 20.11.20: Small biz tax deduction, CFIB CRA fight, and much more
Wrapping up the odds and ends in this week’s Canadian accounting news
TORONTO, Nov. 20, 2020 – As Canadians face the looming threat of more lockdowns due to the second wave of the COVID-19 pandemic, we launched a four-part series on how the Canadian economy can recover from COVID-19, featuring an all-star line-up of Canadian economists. But we rarely miss reporting on the odds and ends from the week’s news in the world of Canadian accounting:
There is no evidence that the SBD contributes to job creation or economic growth in any meaningful way, says Allan Lanthier in a Financial Post Op-ed.
Allan Lanthier strikes again: The small business tax deduction
Canadian Accountant’s favourite “tax disturber,” Allan Lanthier, was at it again this week in the Financial Post, striking at the heart of a treasured tax break — the Small Business Deduction (SBD). The problem with Lanthier is that, as a retired partner of EY Canada, he cannot be easily dismissed as a know-nothing by other practitioners.
At the risk of over-simplifying, his argument is that small businesses do not contribute the economic impact mythologized by politicians, and the tax break should instead be used to lower all corporate tax rates. Also, simplify dividend rules and fix the tax code.
CFIB backs restauranteurs in fight against CRA
The CBC reported this week on the case of a Quebec couple who have been battling the Canada Revenue Agency and Revenue Quebec for 16 years over what proved to be a false determination that they failed to report revenue for their now closed restaurant south of Montreal. The newest wrinkle in the case is that the Canadian Federation of Independent Business (CFIB) is backing the couple’s application to the Supreme Court.
The CFIB wants to see the case heard “because tax agencies in Canada should be held accountable for their mistakes.” According to the CBC, the owner “estimates he will owe at least $800,000 in legal and accounting fees by the time his case is heard by Canada's top court.” As Dale Barrett points out in “A sad story about Mr. X. from country Y,” Canadians are deemed guilty in an unfair tax system.
Will Biden go easier on Chinese audits?
One story that we’re following with great interest is how the election of Joe Biden as President of the United States will affect ongoing concerns over the transparency of audits conducted in China. In Canada, both the Ontario Securities Commission and Canada’s audit watchdog, the Canadian Public Accountability Board, have complained about the lack of access to Chinese financial reporting.
This week, Reuters reported that “A top Chinese securities regulator said on Tuesday that he hopes Sino-U.S. relations will be much improved under a Biden administration.” Reuters reports that, in August, U.S. Securities and Exchange Commission and Treasury officials urged [President] Trump to delist Chinese companies that trade on U.S. exchanges and fail to meet its auditing requirements by January 2022.
That seems rather disingenuous to us. More accurately, the issue of audit transparency is but one weapon the Trump administration has used in its political and trade offensive against China, and many of the officials (such as Jay Clayton, the outgoing SEC Chair) were appointed by Trump in the first place.
Worrisome news on mortgage payment deferrals
The Canadian Bankers Association came out this week with some good news/bad news on mortgage deferrals across Canada. The good news is that more than half of borrowers have already resumed their regular payment schedules after entering deferral agreements with their lenders earlier this year. The bad news is roughly six per cent of mortgages are still on deferral, with 16 per cent of those actually signing up for deferral in September. The CBA is worried that these numbers represent historically high delinquencies to come.
Sage launches Business Cloud Marketplace in Canada
Cloud business software giant Sage has launched the new Sage Business Cloud Marketplace in Canada. It provides Sage customers with a curated selection of apps to help businesses perform at their best. According to its press release, newly added to the Sage Marketplace in Canada are True Sky, a budgeting, planning and forecasting solution for business, and Credit Hound, automated collections management software that instantly shows customers what is owed and when to follow up on outstanding debts.
By Canadian Accountant staff.