Sunday News Roundup 21.10.10: Pandora Papers, global tax deal, elephant tails, and more 

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TORONTO, Oct. 10, 2021 – This past week began with the publication of the Pandora Papers and ended with the landmark OECD deal on a global corporate tax rate. Coincidence? Who knows. But another deluge of data on global tax avoidance brought a little more focus and urgency to reporting on the OECD. Before we get on to the odds and ends of news from the past week in Canadian accounting, let’s pick apart some of the media coverage from these two big stories. 

Lifting the lid on a Pandora’s Box of tax avoidance

The first Pandora Papers reports from the International Consortium of Investigative Journalists actually began last Sunday. The Toronto Star published an entire series throughout the week, beginning with a report on the “Billionaires, Olympian and porn king” named in the data. 

The tax professionals at the Canada Revenue Agency, who belong to a public sector union, came out with a statement demanding the government do more to combat international tax avoidance. Canadian Accountant published our own take, penned by an accounting professor from the University of Ottawa. And Terry Corcoran at the National Post wrote his typically alternative take on the news. Not a few of the outlets pointed out the CRA’s feeble record on pursuing global tax avoiders and beneficial ownership. 

Global minimum corporate tax deal struck

Following the capitulation of the unholy trinity of tax avoidance nations (Estonia, Hungary, and Ireland), the OECD announced a sweeping overhaul of global tax rules. Allan Lanthier, who has written for Canadian Accountant in the past, was quoted in this report from the Globe and Mail. While some called the deal a “game changer,” sceptics pointed out Washington and Big Tech won the global tax fight by avoiding digital sales taxes in Canada, Europe, and the UK. 

CPA Canada takes the carbon neutral pledge

The national accounting body for Canada’s 200k-plus chartered professional accountants signed on this past week to a global pledge from accountancy organizations to “achieve net zero greenhouse gas (GHG) emissions within their own organizations, as well as provide an enabling environment for their membership to do the same.” The announcement comes just prior to the big COP26 meeting at the end of October. 

This looks promising but there were no dates published in the announcement(s) and pathways/targets don’t need to be published for another 12 months. How will CPA reduce emissions at its mammoth headquarters on 277 Wellington Street West? Does the pledge include events and travel to conferences? Would CPA Canada need to purchase carbon credits to reach carbon neutrality? If the ICAEW did it, so too can CPA Canada. 

Watch out for a rise in US interest rates

The Globe and Mail’s tax and fiscal policy reporter, Patrick Brethour, had an interesting article this week on Canada’s deficit and the threat of rising interest rates. It seems that Northwestern University economics professor Martin Eichenbaum believes Canada is in no present economic danger as gross domestic product will continue to outstrip the growth in debt … with one caveat. A rise in US interest (as opposed to Canadian interest rates) would have serious ripple effects. The professor says Canada should borrow now and lock in at lower rates as insurance for the future. 

Quick Hits

What management accountants can expect from COP26 (Financial Management)
New rules make ‘knowing your client’ even more important for CPAs (CPA Canada)
Sage announces acquisition of GoProposal to help accountants accelerate practice management in the cloud (press release)
UK professional services firms hit by labour shortages 

By Canadian Accountant staff.