Friday News Roundup 21.08.13: CRA errors, Xero, Freshbooks, record low insolvencies and more 

TORONTO, Aug. 13, 2021 – With news expected any day now that the Liberal government of Justin Trudeau will call a snap fall election, parties are already dropping tax-related goodies. The NDP wants to implement a wealth tax and the Tories are promising to cut taxes for new technologies. So let’s get to the odds and ends of news from the world of Canadian accounting, before all eyes turn to campaigning: 

CRA errors leading to payments, confusion

The Toronto Sun says Federal Court documents show the Canada Revenue Agency mistakenly refunded money to the wrong filer’s account. And the CBC says the CRA has been sowing confusion in the Maritimes over HST rebates on PEI. “On Aug. 5 the CRA began issuing corrected notices, but without informing Islanders a mistake had been made.” Never a good move. 

Business, consumer insolvencies at historic lows

The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) reports that the number of Canadian businesses filing insolvency remains near an all-time low and consumer insolvencies remains below the pre-pandemic level. According to CAIRP, the pandemic has also brought about changes to the makeup of household debt of Canadians. While credit card debt has declined, many households have taken on large mortgages relative to their income which could put some in precarious financial situations if interest rates increase. 

“Business insolvencies continue to be artificially suppressed due to government supports,” says Mark Rosen, Chair of CAIRP. “Another reason the insolvency trend appears decoupled from the current economic environment is that many company principals are choosing to walk away rather than formally winding down their business.” 

Vancouver hires CPA as its first auditor general

Congratulations to Mike Macdonell, CPA, CA, who has been hired as the first auditor general in the history of Van City. According to the blog, Vancouver is Awesome, Macdonell served 23 years in the office of the Auditor General of B.C. 

Xero upgrades bank recs feature

Cloud accounting platform Xero has unveiled its largest upgrade to its bank reconciliation feature in more than a decade.  The company says that, in the past 12 months, it has processed more than 1.76 billion bank transactions for more than 2.7 million subscribers globally. The new improvements are aimed at saving accountants and their small business clients time by reducing data entry and increasing efficiency. 

Freshbook is a Canadian unicorn

By receiving a $130M capital injection, Toronto-based accounting software company Freshbooks, legally known as 2ndSite Inc., is the 14th Canadian company since the start of the pandemic to reach a unicorn status. According to the Globe and Mail, in a rare display of wit, “As private capital providers have increasingly chased deals globally and as Canada’s tech sector has matured, however, unicorns have proliferated here like raccoons.” 

Apparently part of the investment, led by long-time FreshBooks investor Accomplice, is to switch out CEOs, with an executive from Accomplice taking the helm. “The 515-person company, which offers invoicing, payments and other core accounting functions through its online platform, competes against Intuit’s Quickbooks and Xero,” says the Globe and Mail. 

Quick Hits

The dirty secret of carbon accounting could soon be exposed 

By Canadian Accountant staff.