Sunday News Roundup 24.12.08: Ford rebates policing costs, defanging the audit watchdogs, and more Canadian accounting news

Wrapping up the odds and ends from the past week in Canadian accounting news

Dec 9, 2024 Author: Canadian Accountant

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TORONTO, December 8, 2024 – On a Friday afternoon at the end of November, the Doug Ford government in Ontario announced $77-million in funding to offset the impact of a new collective bargaining agreement between the provincial government and the Ontario Provincial Police Association. This was a story that Canadian Accountant had been doggedly following for its impact on municipal budgets and inevitable property tax hikes to follow.

What a mess. In 1998, the government of Mike Harris, eager to pare the provincial budget under the rubric of the “Common Sense Revolution,” downloaded the costs of highways, police, and social services to municipalities. Since then, municipalities have borne the costs of contracts negotiated by the provincial government — which they have no control over — with local businesses and home owners ultimately paying for inevitable municipal budget hikes through higher property taxes.

To be fair, the Liberal governments of Dalton McGuinty and Kathleen Wynne had the opportunity to re-upload costs — and they did but only in part. The OPP contract was generous and included retroactive payments to officers, resulting in sticker shock in small towns across Ontario such as Midland (“ridiculous”), Renfrew County (“a disaster”), and Timiskaming (“shocking”), as reported by Canadian Accountant.

Local politicians are playing nice right now with the province, expressing their gratitude for the sudden injection of cash to offset costs, but the story has not ended. One-time payments will not fix the systemic issue at the heart of the problem and it is notoriously expensive for muncipalities to switch from provincial policing to local detachments (or vice versa). The question is whether small town taxpayers will blame the province or their local councils for the property tax hikes to come.

And now, on to the rest of the news from the past week in Canadian accounting.

Trump: Defanging the US audit watchdog … and Canada’s?

This past week, a reader pointed us to a note in the Financial Times, exploring the optimism among US accounting firms that president-elect Donald Trump will dissolve the Public Company Accounting Oversight Board. We pointed this out all the way back on November 10 in Five ways Donald Trump’s election victory is good for Canadian accountants.

“With Republicans set to control both houses of Congress next year, Trump will probably have the congressional support he needs to defang the PCAOB,” writes the Financial Times. It includes a quote from the ironically named Center for Audit Quality — an industry lobby group funded largely by the Big Four — about the PCAOB’s “concerning lack of data-driven analysis.”

I think we know that all of this will end—in tears for investors and the American public—but it won’t be immediate. It will take a few years before this new era of loose rules and little to any regulation begins to take hold, for cultures to change and for fraud to make an impact. Perhaps the more interesting question, now that we know what’s coming, is about the future of the Canadian Public Accountability Board. If the US dissolves the PCAOB in one way or another, would a new federal government do the same to the PCAOB’s equivalent in Canada?

Fraudsters continue to get the better of the CRA

Hot off the heels of revelations that leadership at the Canada Revenue Agency knew of fraudulent refunds and launched “witch hunts” at whistleblowers comes news of fictitious commercial renovation claims that also duped the CRA out of millions. Ottawa and Ontario are now arguing over who was responsible for checking the claims of fake companies.

Interestingly, this comes at a time when the CRA says it will eliminate about 600 temporary and contract employees across the country by mid-December. The CRA basically says it doesn’t need them anymore now that the pandemic is over. That includes 126 across the Atlantic region. It will be interesting to watch what happens in the upcoming tax season but, whatever the outcome, the Minister of Revenue will likely not be around by its close, as she has already announced she is leaving federal politics to run for mayor of Sherbrooke.

Accounting Dealbook: MNP closing 2024 with acquisitions

Homegrown Canadian national accounting firm MNP LLP is continuing its strong record of acquisitions to close out the year. In November the firm announced new mergers in Sherbrooke, Quebec (Stéphane Viens CPA) and Oakville, Ontario (Hagar Liao CPA), just weeks after doubling its presence in Sudbury, Ontario (SRWC LLP).

Western media platform Castanet carried a story on MNP’s merger with Finnie Hunka in Kamloops. The firm also signaled its commitment to carbon accounting with the acquisition of Sherbrooke’s Carbone-accès, a Canadian company specializing in the delivery of services of Greenhouse Gas quantification, validation and verification.

Software News: Xero/Caseware working papers

Earlier this year, Xero announced a new integration partnership with Canadian-born audit and reporting provider Caseware, that would allow shared customers to import trial balances and general ledger data from Xero into Caseware Working Papers, helping Canadian accountants and bookkeepers complete their year-end compliance requirements faster. The new Caseware Working Paper integration is now available for Xero users in the MyCaseware portal. Some helpful guidance can be found in Xero’s latest blog post: Using Caseware and Wagepoint to streamline your EOFY.