Sunday News Roundup 21.12.05: Lyskyk calls out OSC, Omicron cancels Xmas, CPA fraud and more

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

Dec 6, 2021 Author: Canadian Accountant

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TORONTO, Dec. 5, 2021 – The big news this week was the Omicron variant and its threat to recovering economies around the world. This past Tuesday, Canada introduced additional measures at Canadian border points to reduce the risk of importation and transmission of the Covid-19 variant.

Meanwhile, accounting firms overseas are telling staff to keep holiday parties small, and be prepared to cancel Christmas parties on short notice. And now, on to the odds and ends of news from the world of Canadian accounting.

Ontario Auditor General calls out OSC, CPAB

Bonnie Lysyk, the Auditor General of Ontario, released her 2021 Annual Report on Wednesday, and it was highly critical of both the Ontario Securities Commission (OSC) and regulatory oversight of the accounting and auditing profession. We will delve deeper in the future into the issues raised by the Auditor General, but let’s condense her criticism to two main takeaways.

One, the OSC has failed in its duties to Canadian investors by neither alerting the public to risky investments nor collecting on the majority of fines it imposes, which is basically calling the OSC toothless. And two, the OSC does not have access to the inspection reports of audit firms and names of market participants inspected with deficiencies, as is the case in the United States.

In addition, Lyskyk alleges — based on evidence involving Ontario’s former Minister of Finance — that the OSC is not only vulnerable to political interference but has been actively undermined by the Ford government in Ontario. Given that the OSC is responsible for oversight of the largest stock exchange (TSX) in Canada, and one of the largest stock exchanges in the world, Lysyk’s accusations are serious. Investors beware.

Loblaw wins big Barbados bank case before the Supreme Court

Back in 2013, Canadian grocery giant Loblaw wound down its banking institution in Barbados, in order to help the Weston family buy Shoppers Drug Mart. But the Canada Revenue Agency. But in a 7-0 decision released on Friday, the Supreme Court of Canada ruled that Loblaw should not have to pay Canadian taxes on the income from its subsidiary. The case has wound its way through the courts for years and Loblaw even took a C$367 million charge to cover costs had it lost the ruling.

In an ironic coincidence, Debi Daviau, the outgoing president of the Professional Institute of the Public Service of Canada (the union to which civil service CPAs belong), called on the Canadian government yesterday to close loopholes and make sure the CRA has the resources to ensure tax fairness.

Belledune accounting decision will cost New Brunswickers millions

Can we all agree that closing coal mines is good for the planet? And can we also agree that the future of coal mining in Canada has been risky for years? So why did the CEO of New Brunswick Power, one Gaetan Thomas, change the expense depreciation of the Belledune coal-fired generating station in 2016?

The plant was on schedule to be retired in 2028, according to CBC New Brunswick. But in 2016, NB Power said it would operate until 2040 — despite warnings from independent authorities — adding 12 more years to its depreciation. The change instantly saved the utility almost $20M per year. Now the chickens have come to roost: the Feds, committed to climate action and shutting down coal mines, says it won’t extend the life of the plant.

Kelowna CPA offside in lacrosse violation, charged with fraud

John Scott Adams was a named partner at the accounting firm Adams Heymen Owen Chartered Professional Accountants in Kelowna, BC. Adams was recently charged by the Kelowna RCMP with theft and fraud over $5,000 as the result of a three-year investigation, for allegedly stealing over $100,000 from the Kelowna Minor Lacrosse Association (KMLA). CPA BC says Adams resigned in 2018 but initiated disciplinary proceedings against the former CPA. Adams has since repaid the KMLA in full and the firm has since rebranded as Heymen Owen Chartered Professional Accountants.

Canadian employees: Where's the door out of here?

The 12th Annual Hays Salary Guide came out this past week and reported that 65 per cent of Canadian employees are are seriously considering leaving their current role – an all-time high (or low, depending on your view) for the retention number in the annual report. “People are reading headlines about the roaring job market and that’s lessened their perceived risk of switching jobs,” said Travis O’Rourke, president of Hays Specialist Recruitment Canada. “Employees are also motivated by two years of stalled salaries and they’re packing up for the company down the street that’s paying more.

CPA Canada, Deloitte team up on ESG disclosure report

To better understand the nature and quality of net zero disclosures in Canada, Deloitte and CPA Canada teamed together to examine the net-zero disclosures of 20 publicly listed companies on the Toronto Stock Exchange (TSX) across several industries. You can read the findings in Getting to Net Zero: An assessment of 20 Canadian companies, their climate-action plans, and how they communicate them.

The report highlights key findings from the disclosure study and areas for improvement. It also revealed difficulty in comparing net zero targets among companies and a need for additional guidance to enable clear, consistent and comparable disclosures around net zero targets.

Xero reaches AI bank reconciliation milestone

Global small business accounting platform Xero recently hit a significant milestone in its AI strategy with the roll-out of new bank reconciliation predictions, with more than 1.7 billion transactions reconciled in the Xero platform over the past 12 months. And Xero’s Canada Country Manager, Faye Pang, was recently profiled in the Women of the Year 2021 feature in the Bay Street Bull.