Friday News Roundup 21.09.03: Big Four jabs, CRA secrets, minimum taxes, wealth taxes and more
Wrapping up the odds and ends in this week’s Canadian accounting news
TORONTO, Sept. 3, 2021 – Did anyone watch the leaders debate in French on Thursday? Oddly enough, taxes — or rather tax credits — may play an outsize role in the election. Voters in Quebec will have to decide whether they would scrap a Liberal plan to transfer $6 billion to Quebec as part of a national childcare plan and replace it with a refundable tax credit program from the Conservatives. It could become a decision for swing voters in the province.
But on Wednesday, one day before the French language debate, the Liberals finally released their full platform, which included a number of taxation and tax enforcement policies. Most notable was the implementation of a “minimum tax rule” of 15 per cent on high income earners by “removing their ability to artificially pay no tax through excessive use of deductions and credits.” No surprise that reaction came from all corners.
Allan Lanthier, a contributor to Canadian Accountant, points out that Canada already has a minimum tax, and the “word around Ottawa” is the Liberals would target charitable deductions. Tim Cestnick at the Globe and Mail, however, is more concerned about taxing capital gains, and pitched three problems the Liberals’ proposed tax on highest income earners will cause.
Meanwhile, NDP Leader recommitted last Monday to “closing loopholes that benefit billionaires,” a wealth tax on the super rich, and $100 million more for the Canada Revenue Agency. That earned the opprobrium of Rupa Subramanya in the National Post, writing that “Punitive taxation on the wealthy will only lead to exit or tax avoidance, possibly both, and will be self-defeating.”
Meanwhile, Erin O’Toole has promised to “reform” the Canada Revenue Agency, and would put a “price on carbon” through “a kind of loyalty rewards program,” in the words of Andrew Coyne. Regardless, a majority of Canadians expect to pay more in taxes after Sept. 20 election, says a public opinion poll, and “raising taxes on Canada’s walthiest elites is a winning issue this election,” according to Press Progress. Now on to the odds and ends from the past week in the world of Canadian accounting.
Deloitte won’t gab about jabs
Courtesy of the Globe and Mail comes news that three of the Big Four are requiring employees to be fully vaccinated against COVID-19 to return to the office as they prepare to reintroduce in-person meetings with clients. Deloitte was the only one of the accounting firms not to respond to inquiries — never a good look.
To the best of our knowledge, Crowe Soberman was the first accounting firm in Canada to announce it would require employees to be vaccinated, as a workplace policy. “The three firms are global entities with a significant presence in Canada,” says the Globe. No kidding.
Why the CRA buried a study on foreign money and luxury housing
Ian Young is surely one of Canada’s best investigative journalists but, because he toils chiefly for the South China Morning Post (SCMP), his work doesn’t get the exposure he deserves. On Monday, Young revealed that he had finally got his hands on secret CRA documents, after waiting five years for a Freedom of Information request.
The CRA buried a 1996 study, which linked foreign money and tax evasion to the rising cost of real estate in Vancouver, according to heavily redacted documents. SCMP blocks its content behind a paywall but you can read Young’s story here on Yahoo News.
The Big Four vs. Big Law
We’re not opposed to linking stories from foreign sources if the content relates to Canada. In “How the big four accounting firms failed to dominate law,” Joel Barolsky of the Australian Financial Review asks, “What happened to the grand plans for global domination of the legal market?”
Good question. Back in 2018, Deloitte, EY, KPMG, and PwC were well-positioned to move in on Big Law. While Canadian accountant Beth Wilson taking over as CEO of Dentons is an interesting footnote, the big push has yet to realize any tangible results.
Canadian business insolvencies lowest on record
Here’s an incredible statistic, courtesy of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP): During the month of July, only 160 insolvencies were filed by Canadian businesses, the lowest volume on record in 35 years.
“Government support has bridged the revenue gap for many businesses impacted by pandemic-related restrictions and will likely continue to do so at least until those extensions come to an end in October,” says CAIRP Chair Mark Rosen.
MNP releases book on Indigenous rights
New national RCMP contract will impact Kamloops taxpayers
Big Four accounting firms rush to join the ESG bandwagon
Shark Tank investors Kevin O’Leary and Kevin Harrington sued for fraud
By Canadian Accountant staff.