Five ways Donald Trump’s election victory is good for Canadian accountants

TORONTO, Nov. 10, 2024 – Donald Trump’s sweeping victory in the 60th quadrennial presidential election has sent shivers through Canadian economic circles. The prospect of higher tariffs, turbo-charged protectionism, and a potential trade war with China does not bode well for Canadians. 

But there is one group of Canadian workers who will likely benefit from a second Trump administration: Canadian accountants. The accounting profession is a conservative one. The accounting profession in the United States has overwhelmingly supported Trump in the past. And the majority of Canadian accountants tend to vote Conservative. A shift to more conservative economic policies is a welcome sight in general for most accountants. 

The next four years may be tumultuous times for economies and businesses around the world, but here are five reasons why Donald Trump’s election victory will be good for Canadian accountants. 

1. Canadian auditors will no longer fear US audit watchdog Erica Y. Williams.

The appointment in 2021 of Erica Y. Williams as Chair of the Public Company Accounting Oversight Board marked a new era in the history of the US audit watchdog. In just three short years, Williams tightened audit regulation, levied the highest fines in the history of the PCAOB, and set a new standard for efficiency and transparency that put Canadian audit regulation under the microscope of uncomfortable scrutiny. 

But the incoming Trump administration has already signaled its fervent commitment to deregulation. And the greatest weakness of the American regulatory system is its vulnerability to partisan politics. Watch for a new Chair of the Securities and Exchange Commission to cut the PCAOB’s budget and install Republicans to the Board. 

Canadian auditors — particularly in British Columbia — are surely celebrating. Watch for inspection reports to slow to a trickle, just as they did during Trump’s first term in office, and standards to be relaxed. And be aware that the risk of corporate auditing failures such as Enron or, more recently, Silicon Valley Bank, will surely increase in the coming years.

2. The Internal Revenue Service will be rendered toothless.

There are few topics that raise the ire of Canadian accountants more than the money that the Liberals have given over the years to the Canada Revenue Agency. And don't even mention that Stephen Harper starved the CRA. That will surely raise some hackles. 

For a while there, both the CRA and the IRS were in the same boat — up a creek without a paddle. But it now looks like the IRS will stay rudderless for the forseeable future. Not only were the promises of more funding from the Biden Administration under the Inflation Reduction Act chipped away at by the Republicans. But a new Trump Administration is sure to beat the IRS into submission. For many accountants in the United States, that is welcome news — no more pesky audits of billionaires. Only the poor — always easy targets — will be audited by the IRS. 

But it may have a knock-on effect in Canada as well, especially for wealthy Canadians with holdings in the United States, and in terms of cross-border cooperation between the two agencies, which had increased when Biden was still in office. 

3. Wealthy Canadians will be green with envy over low, low taxes.

Emigration from Canada to the US hit a 10-year high in the most recent census (2022) as tens of thousands of Canadians relocated south. Watch for that number to increase if Trump once again lowers personal income taxes as he has pledged. 

With increases to capital gains taxation on the horizon and higher taxes in general in Canada, coupled with coming tax cuts in the United States, many wealthier Canadians will be calling their accountants to inquire about cross-border tax planning strategies, emigration and estate planning advice. Now is a good time for accounting firms to be investing in their cross-border advisory services. 

4. Tech titans will find a transfer pricing paradise in tax havens.

OK, maybe you’re not in public practice, but what about transfer pricing? We may be entering a new golden age of corporate tax havens if Donald Trump has his way. Tech titans from Bezos to Zuckerberg to Brin and all the tech and pharma and crypto bros (not to mention Elon Musk) are surely rubbing their hands with glee at the prospect that any hard-won reforms eked out by the OECD in recent years in terms of international tax avoidance may be rolled back. 

Watch for all the usual suspects — Ireland, Luxembourg, the Cayman Islands, BVI, Cyprus and more — to benefit from a hands-off approach as corporations continue international tax avoidance strategies. And Canadian companies are sure to watch closely and lobby the federal government to level the playing field in the name of Canadian “competitiveness.”

The Tax Gap? It’s bound to get wider. Transfer pricing pros? Glory days.

5. The coming trade wars will be great for management accountants.

If you're the boss at a Canadian corporation and you're not talking to your (CPA) CFO, then you've lost the game already. The spectre of coming hikes to tariffs and a new, Trump-style brand of protectionism will impact every Canadian company that exports to the United States.

And that's good news for all the management accountants out there — from CFOs all the way down the corporate accounting chain. And, if you think your company will escape the carnage because your exports are low or non-existent, just wait until Trump sparks a trade war with China, and the Chinese retaliate with tariffs on everything from soybeans to electronics, and maybe boot a few foreign companies out of Beijing and Shanghai for good measure.

Sure, we may be in for a crisis. But here's something to think about: The Chinese word for crisis is Wei Ji. "Wei" means "crisis" while "Ji" means opportunity and, in Chinese philosophy, opportunities often arise from crisis.

Colin Ellis is a contributing editor to Canadian Accountant. Title image: Coin with Donald Trump on shiny background, Fujian, China, December 28, 2021 (iStock ID 1415215556).