Sunday News Roundup 22.11.13: Pre-Budget planning, taxing windfalls and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Nov. 13, 2022 – One week after delivering her fall economic update in Ottawa on November 3, Deputy Prime Minister and Minister of Finance Chrystia Freeland is being lobbied by various business interests in pre-budget submissions for 2023. It begins with the timing of the 2023 Budget itself, which the Business Council of Canada wants to see “at the earliest opportunity” rather than in April, and ideally no later than the end of February.
The Business Council wants clarity on a number of tax-related proposals, from green energy incentives to a national supply chain strategy to a planned tax on share buybacks. Of most interest to tax practitioners would be a planned review of the Scientific Research and Experimental Development (SR&ED) tax credit.
CPA Canada released its annual pre-budget submission with three key recommendations for the 2023 federal budget: a national whistleblower protection framework to fight financial crimes; a reduced regulatory and compliance burden for SMEs; and improvements in service delivery within Canada’s immigration system. As part of a reduction of compliance, CPA Canada is hoping for a federal panel on tax simplification for SMEs, which has a better chance than tearing down the entire Income Tax Act.
One can see in the submission many of the concerns that have roiled the Canadian accounting profession in the past, beginning with the scrutiny of professional services practitioners by the Cullen Commission, to the frustrations of corporate management CPAs over the tight labour market. With so many accountants working in so many sectors (in a unified profession), CPA Canada is alert to the concerns of a very diverse group.
Canadians’ rising debt, bankruptcies won’t stop holiday spending
November is financial literacy month in Canada but the restraint message is not getting through. CPA Canada came out with its annual holiday spending study this past week. It revealed that two-thirds (67 per cent) of Canadians believe inflation will make it harder to buy gifts this upcoming holiday season. Yet they intend to spend about the same amount on gifts as they have in previous years.
This at a time when consumer insolvency filings in Canada rose 22.5 percent in the third quarter of 2022 compared to the same quarter last year, the largest percentage increase in 13 years, according to the Canadian Association of Insolvency and Restructuring Professionals. CAIRP also reports that third-quarter business insolvencies are up 48.5% over last year, the largest percentage increase in 35 years of records, though the number of filings remaining stable compared to the previous quarter.
The sectors registering the biggest increase in the number of insolvencies for the 12 months ending September 30, 2022, compared to the previous period, were accommodation and food services, and construction. The biggest decreases were seen in the mining and oil and gas extraction, and finance and insurance sectors. That squares with consumers cutting back on discretionary items, and the general downturn of the real estate market, especially in Ontario.
PBO pushes windfall tax to other sectors
Ottawa’s Parliamentary Budget Officer said this past week that the federal government could rake in over four billion dollars if it extended its windfall tax from banks to the oilpatch and big box stores. Presumably, big box includes Big Grocery, which has taken a beating in the press.
According to The Canadian Press, corporations can find ways to get around the recently announced buyback tax, whereas a windfall tax would allow for less “wiggle room.”
CRA auditors jobs — no experience necessary!
The online news platform Narcity brought this job advertisement to our attention in CRA Jobs For Auditors Are Available In Canada & You Don't Need Any Experience To Get Hired. We decided to look it up on the CRA’s job site and the headline is true. All you need to apply for the position is an accounting education that includes an acceptable accounting designation or a degree with a specialization in accounting.
On the one hand it’s a sign that the tight labour supply is affecting the CRA. On the other hand, it’s an entry-level job through which the CRA is trying to create a pool of candidates for job vacancies as we head into the tax season. That said, check out the other accounting positions advertised, which offer decent salaries, benefits and a chance to grab hold of a government pension plan.
Quick Hits: Articles of Interest
CRA denies taxpayer's costs of getting to work, but judge says taxman got it wrong (Financial Post)
Vancouver’s vacancy tax is capturing some of the wrong people (Globe and Mail)
Federal cabinet minister refutes N.S. finance minister's gas tax claims (CBC)
Taxes can amplify the pain of inflation (Globe and Mail)
CRA: 3 Big Changes Coming to 2023 Tax Breaks (Yahoo Finance)
MNP Kelowna has become part of the fabric of Interior cities (Castanet)
BDO Partners with Validis to strengthen audit services in Canada (Press Release)
The underlying assumptions of the financial market have crumbled (Globe and Mail)
SEC Top Accountant Says Its Time to Revamp US Audit Standards (Bloomberg Law)
‘There’s definitely an accountant shortage out there’: MBAs have become the go-to degree and companies are struggling to hire enough CPAs (Fortune US)
By Canadian Accountant staff.