Sunday News Roundup 22.09.04: New luxury, pop sales taxes, and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Sept. 4, 2022 – This past week saw the implementation of two new sales taxes — one national, one provincial — and some significant kickback from retailers. At the national level, the Select Luxury Items Tax Act came into effect on September 1st, driving up the cost of luxury cars and planes and boats. If you’re planning on buying a Beamer or a Benz or the boating or flying equivalents, plan on paying 10% of the total taxable amount or 20% of the amount above the price threshold — whichever is lower.
In a CBC interview, Don Drummond called the tax a “loaded approach,” one which could spawn “cottage industries” around people trying to circumvent it. And indeed, back in 2017, the International Consortium of Investigative Journalists busted both Appleby, a Bermuda-based law firm, and Big Four accounting firm Ernst & Young for some crafty tax avoidance strategies for wealthy plane owners.
And in Newfoundland and Labrador, anyone drinking sugary beverages (soda, iced tea, energy drinks) will pay an extra 20 cents a pop per litre … of pop. According to the National Post, Newfoundlanders consume the most sugary beverages in the country and drink the least amount of water. Small business owners and bottlers aren’t juiced, according to the CBC, about the confusion around the tax.
While one tax is national and the other one provincial, the national tax has received far more attention, with the Sun Media chain calling the luxury tax another example of “class warfare,” when the same argument could be made against the sugar tax. And now, on to the rest of the news from the past week in Canadian accounting.
BC auditor general critical of provincial surplus
It must have been a slow news week because BC auditor general Michael Pickup got a lot of coverage for calling into question a provincial government surplus … because it was too low. Pickup has had a 10-year battle with the province over the way it does it accounting and, to be sure, BC is unusual in its departures from Canadian Public Sector Accounting Standards. (Alberta, Ontario, and Quebec all follow generally accepted accounting principles, as do many smaller provinces.)
Pickup says the $1.3-billion surplus announced by the government should have been about six times bigger. Opposition critics allege the province is bolstering its balance sheet while ignoring much-needed social services.
And speaking of public sector accounting standards, the Public Sector Accounting Board (PSAB) seeks your input to determine the project priorities it should take on with its residual resources. They have published a consultation paper that sets out future projects PSAB may consider.
CRA class action lawsuit launched over 2020 hack
Canadian Lawyer magazine reported this past week that a class action lawsuit has been certified by the Federal Court of Canada against the Canada Revenue Agency over its data breach. Canadian accountants no doubt remember the two cyberattacks that led to headaches over locked accounts and hours lost in trying to communicate with the CRA.
The National Post also covered the class action lawsuit, led by Rice Harbut Elliott LLP, and reported the CRA’s response: “No organization is immune to cyber incidents or fraudulent activity. This is why the CRA has robust systems and tools in place to monitor, detect, investigate and quickly neutralize potential threats. As scammers adapt their practices, so does the CRA. We regularly adjust and improve our security measures in response to this ever evolving threat environment and continuing intrusion attempts.”
CPA PD podcast platform gets $5M in funding
Betakit, the Canadian startup news platform, reported this week that LumiQ has plans to expand its PD podcast platform to the US. LumiQ used to be known as Luminari and launched in 2016 as a kind of career management and online job board for Canadian accountants. (Full disclosure: Canadian Accountant and Luminari discussed cross-promotional activities when Canadian Accountant launched in 2017.) Its PD courses on venture capital investing were very popular with CPAs.
LumiQ has “pivoted” to a podcast platform that provides mandatory professional development opportunities (“compliance learning”) to Canada’s 200k+ chartered professional accountants. Its $5M in funding, apparently from private investors, will be used to finance its subscription-based growth strategy south of the border.
Quick Hits: Articles of Interest
CRA has no business telling people how to run their business, judge says in corporate tax case (Financial Post)
Most doctors took financial hit in 1st year of COVID, but top earners did just fine (CBC)
Tax & Spend: The carbon-pricing fight heads east (Globe and Mail)
Friday Footnotes: EY Split Drags Out; Advisory Firm Defrauds Clients; Student Loan Forgiveness and Taxes (Going Concern)
By Canadian Accountant staff.