Sunday News Roundup 24.10.27: St-Jean moved on, policing and property taxes, and more Canadian accounting news

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TORONTO, October 27, 2024 – When the Canadian Sustainability Standards Board announced that Charles-Antoine St-Jean was leaving the CSSB (“transitioning from his position as Chair”), it was easy to miss the news. After all, the announcement was made on August 27, just days before the Labour Day long weekend, when the public (and the media) don’t always pay attention. That was exactly two months ago.

We documented St-Jean’s intriguing tenure quite extensively, from his appointment as head of CPA Canada to the regional head of the ISSB to the Chair of the CSSB, all in the blink of an eye, or so it seemed. It was a fascinating arc. His arrival at CPA Canada was promising. The profession had suffered a black eye after the national embarrassment of CFE technical failures we coined famously as the "Fyre Festival for accountants."

Then came the selling of Canada as a global player in sustainability standards — culminating in Federal Finance Minister Chrystia Freeland's announcement of Montreal as a regional hub of the International Sustainability Standards Board. Within two years, St-Jean had left CPA Canada to take over the Montreal hub — a move we predicted — before leaving the ISSB to head up the CSSB.

Within a year, the profession was rocked by the now infamous collapse of the Collaboration Accord. A new president, Pamela Steer, was appointed head of CPA Canada, inheriting a mess of epic proportions. Within months, both CPA Ontario and CPA Quebec were blaming a lack of financial transparency as one of the reasons they were leaving CPA Canada under the Collaboration Accord.

As we reported, the initial cost of setting up both the ISSB hub and the CSSB were taken from a CPA Canada fund called the Coalition of Canadian Champions Escrow Trust, which was down nine million dollars.

It's possible to see both sides of the story here: the ambition to turn Canada into global player in sustainability standards, and the sticker shock suffered by Ontario and Quebec, whose member fees were paying a significant portion of CPA Canada's funding. One wonders where the CSSB will find its funds now. There was talk that the federal government would fund the body —but we predict that's unlikely under a Conservative government led by "axe the tax" Pierre Poilievre. At the very least, it's another angle to the story we called the CPA Standoff —a national embarrassment for the profession.

Consider this our official mea culpa for missing the story—as quiet as the announcement was. And now, on to the rest of the news from the past week in Canadian accounting.

Sticker shock for Ontario municipalities over OPP costs

A wave of fear and anxiety is building across Ontario over the costs of a new, four-year contract between the Doug Ford government and the Ontario Provincial Police Association. Municipalities are freaking out that increased policing costs are going to hit taxpayers hard through property tax hikes. Thus far, the municipalities have yet to band together, but word is leaking out of local councils swooning from sticker shock.

Big hikes have been reported in Brocktown, Napanee, Fort Frances, Oro-Medonte, Mattawa, Stormont, Dundas and Glengarry, Midland, Pembroke, Petawawa and more. What’s unique about these sites is that many have detachments, where officers will be entitled to retroactive compensation.

As we reported previously, the OPP provides policing services to 327 municipalities. Its contract is negotiated with the province but, due to the downloading of policing costs to municipalities during former Premier Mike Harris’ Common Sense Revolution, the burden of paying for those contracts is borne by municipal taxpayers. Watch for municipal politicians, scared stiff about losing their seats, to band together against the province during the leadup to an impending election. 

Accounting Dealbook: Grant Thornton goes for the green

The realignment of the Grant Thornton brand globally continues. Earlier this month, we reported that the GT brand in Canada — now known as Doane Grant Thornton LLP — was refocusing its business lines away from auditing public companies to focus on advisory services. The rebranding — sticking the “Doane” in front of Grant Thornton — not only would celebrate the firm’s Canadian roots but separate it from Grant Thornton in the US — now owned by private equity firm New Mountain Capital.

And this week, CPA Practice Advisor reported that New Mountain had given its blessing to a merger between Grant Thornton in the US and its Irish cousin, Grant Thornton Ireland. Most telling of all is the following excerpt from the article: “The combined business … will provide tax and advisory services to clients across the U.S., Ireland, Bermuda, Isle of Man, and Gibraltar.”

And what do those jurisdictions have in common? They’re all tax avoidance jurisdictions popular with transfer pricing professionals. The “double Irish” tax haven strategy has been a popular move for tech and pharma bros for years.

CRA employees complain to the Auditor General

One story that caught our attention this past week was a letter from the Union of Taxation Employees, which represents over 36,000 members working at the Canada Revenue Agency, to Auditor General of Canada Karen Hogan. The letter, interestingly enough, coincides with the latest annual report from the Office of Taxpayers' Ombudsperson. Apparently, the Union agrees with the majority of Canadian accountants: "wait times at CRA Contact Centres are simply unacceptable."

But it's interesting to see what the Union considers the cause of long wait times and problematic customer service. The Union blames the government for cutting positions and then hiring people back. It also blames the lack of permanent positions. "The Agency is back to its old ways, and is once again sorely lacking in agents to respond in a timely and appropriate manner to the requests of Canadian taxpayers and businesses."

Quick Hits: Articles of Interest

Canadian
Burlington accounting firm celebrates 50th anniversary (Inside Halton)
Day Trader Says He Made $306 Million on Tesla, Then Lost It All (BNN Bloomberg)
Benjie Thomas: From Waterloo co-op to CEO of KPMG in Canada (University of Waterloo News)

International
Accounting firm RSM in talks to combine UK and US businesses (Financial Times)
PwC needs to rethink its global governance (The Economist)

By Canadian Accountant staff.