Sunday News Roundup 23.02.26: Montreal accounting salaries, underground economy and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, Feb. 26, 2023 – One week has now passed since the start of tax season and all is quiet on the accounting front. No cyberattacks, no call centre strikes, no glitches to EFILE. We hope that remains the case for the next two months. An excellent resource for Canadian tax preparers is the Canadian Taxation Professionals group on LinkedIn, which focuses on practical questions about difficult tax issues, and is moderated by highly regarded tax professionals.
And now, on to the rest of the news from the past week in Canadian accounting.
How much do accountants make in Montreal?
Accounting salaries are notoriously difficult to measure. Whose numbers can you trust? What are the criteria? What kind of accountants are we talking about? A recruitment firm called Fed Finance published a salary survey this past week for accountants in Montreal. It’s well worth reading.
For example, it mentions the influence of a CPA designation in recruitment, stating that a CPA designation “has a real impact on salaries and makes it easier to advance to positions of responsibility in any type of organization.” We can safely assume that most of the higher positions in their data tables are taken by designated accountants (but not always): “… despite the need for companies to recruit CPA professionals, they will prefer to wait and let a candidate pass if his or her salary expectations are too high.”
What leaps out is the relatively low level of pay for entry-level positions. Positions in clerical, accounts and admin are all in the $50k range. Junior accounting roles might rise to $65k while even intermediate roles, such as analysts and assistant controllers, don’t rise above $100k unless you have more than 10 years accounting experience.
While it’s difficult to make blanket statements about accounting salaries based on one set of limited data, there have been rumblings about the low rate of pay in the accounting profession, compared to opportunities that exist for talented young people in other professions.
StatsCan: Underground economy data past expiry date
Statistics Canada released a report this past week on the underground economy. While it’s interesting to read, the data is a lot less useful now. The StatsCan report is for 2021 — a pandemic year when contractors were running amok doing home renovations — before the rise in interest rates and the (concurrent) collapse of the real estate market.
StatsCan points its finger directly at the “residential construction” market and landlords (“lessors of real estate”). “These industries have been the main contributors to underground economic activity in Canada since 1992, the first year data became available,” declares StatsCan. It seems that David Rotfleisch’s wonderful article, Black Money or 'Why I can’t find workers to build my cottage,' is as relevant today as it was back in 2017.
One more fun fact: As a proportion of total economy-wide GDP in 2021, underground economic activity was the largest in Prince Edward Island (3.4%) and in British Columbia (3.2%). StatsCan gives some possible explanations but maybe someone can explain to us the similarity between PEI and BC because we don’t see it.
Supreme Court to entertain DOWnard transfer pricing adjustment
The Supreme Court of Canada must really like hearing tax cases. In the same week that it dismissed a number of interesting appeals on criminal matters, estate planning and more, it chose to hear an appeal in a transfer pricing case involving Dow Chemical and a downward adjustment by the Canada Revenue Agency.
Dow must be feeling confident given its recent patent infringement win against Nova Chemicals before the Supreme Court. It lost its appeal before the Federal Court of Appeal and will get its day in court before the highest court in the land. On a side note, the bench will be one justice short, as Russell Brown has taken a leave of absence. A Stephen Harper appointee, Brown is an entertaining figure on the Court, and his absence may have an effect on some decisions.
Postmedia critical of “warrrior accountants” and ISSB Montreal
There was a lot of fanfare over the selection of Montreal as one of three global hubs of a new global disclosure standards body called the International Sustainability Standards Board (ISSB) back in 2021. And we were hardly surprised when former CPA Canada boss Charles-Antoine St-Jean was appointed Regional Director—Americas of the International Sustainability Standards Board — an appointment we predicted.
But not everyone is thrilled with the creation of a sustainability standards board in Canada. Postmedia, a frequent defender of the oil and gas industry, published an opinion piece by Tammy Nemeth called Beware the warrior accountants, which claimed that “governments are weaponizing accountants to disrupt and transform the global economy” and compared accountants to the “whiz kids” that lost the war in Vietnam.
While the author’s background has been reported by the CBC and criticized by the environmental community, the new sustainability standards organizations have in fact been scrutinized for their potential to contribute to greenwashing rather than combatting it. This may be the first time that a pundit has worried that the organizations may go too far.
New accounting profession reports released
The past week has seen a slew of surveys and reports released about and from the accounting profession. Caseware International released two reports this past week — 2023 State of Accounting Firms Trends Report and 2023 State of Internal Audit Trends Report — that offer a glimpse into how accounting firms and internal auditors worldwide are adjusting to changing business environments.
Sage released the Managing Modern Finance in a Time of Unprecedented Change report, which examines challenges finance leaders are currently facing and how they are adapting to drive growth and efficiencies. The report found that almost two-thirds of financial leaders in Canada (60%) said the time they spend on accounting, compliance, and the financial close inhibits their work on strategic projects.
And accounting firm RSM Canada released the first 2023 edition of its quarterly The Real Economy Canada, which “examines what inflation will look like in 2023 as Canadian businesses and consumers continue to navigate a volatile economy.” Among the insights? RSM makes the bold prediction that inflation in Canada could potentially be cut in half by the end of 2023.
Quick Hits: Articles of Interest
I asked my accountant for a document and he asked for $250, is that normal? (Reddit/Canada)
To fix our $1.1-trillion debt, Canada must rethink the principles behind government spending (Globe and Mail)
Canada’s worker ‘shortage’ is an illusion, and bringing in cheap labour doesn’t help (Globe and Mail)
Saskatoon judge appoints accounting firm to manage Lighthouse, audit supported living facility's books (CBC)
Ottawa did not disclose it outsourced CEBA program to Accenture for at least $61-million, documents show (Globe and Mail)
A web of temp agencies. Millions in tax refunds. Inside a ‘murky’ arrangement pitting the CRA against one of the GTA’s most notorious factories (Toronto Star)
China urges state firms to drop Big Four auditors, Bloomberg reports (Reuters)
Britain says global accounting rule crimping its economy (Reuters)
By Canadian Accountant staff.