Friday News Roundup 21.07.23: A tax haven in Ottawa, CPAB & CM2.0 consultations, tax complaints and more

Wrapping up the odds and ends in this week’s Canadian accounting news

Jul 23, 2021 Author: Canadian Accountant

TORONTO, July 23, 2021 – We skipped last week’s news roundup because there wasn’t a tremendous amount of Canadian accounting news to report. But among the global stories (that affect Canada) was the news that G20 leaders signed the global tax deal penned by G7 finance ministers and the EU has agreed to delay its digital sales taxes to buy the Biden Administration some time.

A cynic might say that the prospect of levies on Amazon, Facebook, Google and others was the threat that spurred the global tax proposal in the first place, but let’s move forward with our weekly roundup of odds and ends from the world of Canadian accounting.

Liberals bow to business pressure on wealth transfer tax

First the Liberals allowed a free vote on Bill C-208. Then it hedged on introducing tax amendments when the Bill passed, which earned the wrath of the business lobby, right before an election. It was the Liberal cabinet, not the Finance Department, that dragged their feet before it scrapped its delay and will allow transfers to proceed under current legislation while they ready amendments for 2022. Business lobbyists actually praised Chrystia Freeland for her flexible approach and threw a few backhands at the "previous finance minister" (yeah, that one).

Accounting firms rejoice! It’s unlikely that the amendments will be retroactive, giving HNW clients a short window of time to ostensibly transfer massive amounts of generational wealth to their children. Here’s how Alan Freeman in iPolitics sees it, in Forget the Isle of Man. Ottawa is our latest tax haven:

“Special interests are thrilled, tax lawyers and accountants are busy figuring out how to structure juicy, tax-free transactions, and backbench MPs are jubilant that they’ve stuck it to Freeland and Finance Canada. We get the government we deserve.”

CPAB public consultations on disclosure

Is Canada’s audit watchdog getting ready to update its disclosure policies? CPAB has launched a public consultation to gather input and invite a dialogue on potential changes to the regulatory assessment information it releases to the public. We’ll have more on this intriguing development in the days to come but David Milstead’s article in the Globe and Mail is a good place to start.

CPA Competency Map (CM2.0) comments

And speaking of public consultations, the CPA Competency Map Task Force is running an open comment period from July through to September 30, 2021 on the newly drafted CPA Competency Map (CM2.0) released on July 5. For some time, Canadian accounting academics have been calling for the CPA profession to include digital proficiencies in education and competencies, and the profession has responded. Have your say here.

Single seniors want to split their income too!

Why should couples be the only ones to benefit from income splitting? Isn’t that just another form of discrimination? That’s the argument put forth by Single Seniors for Tax Fairness, a group that advocates for the financial considerations of unmarried retirees, which is collecting signatures on a petition that it hopes to have read in the House of Commons.

Cestnick versus the Carter Commission on capital gains

Tim Cestnick’s tax articles in the Globe and Mail are always intriguing. “Canadians are taxed on illusory capital gains,” says Cestnick, because our current capital gains taxation does not accommodate inflation.

But “This argument, when used to support the exemption of stock market gains, appears over-emphasized,” said the Carter Commission back in 1972. “We have concluded that it should not be the function of the tax system to attempt to relieve only some segments of the population from the effects of inflation. The tax system should therefore, in our opinion, continue to be based on current dollars and not on constant dollars.”

Fight the (New Brunswick) power!

Why do critics always frame accounting strategies in the negative? It’s so unfair. Electricity subsidies — let’s be honest, it’s corporate welfare — to six pulp and paper mills in the province of New Brunswick came under fire last week. "It's an accounting exercise," said the local Green Party leader. "It's a sleight of hand. It's a scam that really dupes New Brunswickers into thinking that somehow we're getting renewable energy from the pulp and paper mills, which we are not."

The foxes are credit counselling Canadian chickens

Where do indebted Canadians go for credit counselling? Well, according to this article in the Toronto Star, once the government cut the charitable status of non-profit credit counselling agencies, “In swept the large accounting firms and private practitioners, who flooded the marketplace with profit-motivated services. It’s the fox guarding the henhouse, with a profit-minded industry looking after what is essentially a human service.”