Sunday News Roundup 25.03.02: Tax and trade tides turn and more Canadian accounting news

Wrapping up the odds and ends from the past week in Canadian accounting news

Mar 3, 2025 Author: Canadian Accountant

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TORONTO, March 2, 2025 – You could forgive Canadians if doctors across the country reported a sudden increase in whiplash. After all, each new day seems to bring a reversal in the accepted narrative of the world in which we live, from trade and tariffs threats, to world events such as US support for Ukraine.

Wayne Gretzky has turned from hero to zero. Pierre Poilievre has lost his message. And all of it is driven by Donald Trump.

Tides are turning in the national conversation about the Canadian economy. The top two contenders in the Liberal leadership race have renounced the carbon tax. A prorogued Parliament has paused changes to capital gains legislation. And Canada’s digital services tax is under attack from the Trump administration.

Canadian corporations clearly see the turmoil as an opportunity to lobby for “competitiveness.” National Bank CEO Laurent Ferreira was in the Financial Post this week asserting Canada needs a “non-partisan head of deregulation” to help remove red tape. And Michael McCain of Maple Leaf Foods is calling for less regulation and lower taxes, because “We can’t let this crisis go to waste.”

And back in January, The Logic posted a fascinating article about Canadian tech bros — upset with capital gains changes and likely looking enviously at Elon Musk's influence — are "cozying up with Pierre Poilievre in hopes he’ll deliver the innovation agenda the Liberals promised."

Allan Lanthier, who has written numerous articles for Canadian Accountant, wrote Why should small businesses get all the tax breaks? in the Globe and Mail. Allan also wrote an opinion piece, We should follow Trump out of the OECD corporate tax cartel, recently for the Financial Post, on the heels of what the Wall Street Journal called The End of the Global Tax Affair.

And now, on to the rest of the news from the past week in Canadian accounting.

US audit watchdog to go the way of Old Yeller?

Accounting Today reported this past week that the PCAOB has ramped up enforcement even as it faces a possible shutdown. One wonders if this is the kind of “deregulation” that Canadian corporations are eyeing with envy. Certainly we predicted the possibility (and its fallout) in Canadian Accountant.

The Wall Street Journal previously reported on Donald Trump’s plan to nominate Paul Atkins, “a longtime critic of the Public Company Accounting Oversight Board, to lead the regulator that oversees it could spur major changes at the audit watchdog, possibly including a move to abolish it.”

And just recently, Accounting Today also reported that “The AICPA & CIMA's new president and CEO, Mark Koziel, told a group of accountants that the association is preparing for the possibility that the Public Company Accounting Oversight Board might be "rolled up" into the Securities and Exchange Commission under the Trump administration.

PCAOB Chair Erica Y. Williams is hanging on courageously. She could have taken the route of IRS Commissioner Danny Werfel, who resigned immediately after Trump took office.

Meanwhile, it's beginning to look like China is taking audit regulation more seriously than the United States. China Has Punished Nearly 50 Accounting Firms Since Start of Year according to Yicai Global. The article includes this remarkable quote: “Due to the competition, issuing reports for money has indeed become a thing in the industry,” a partner at an accounting firm in Beijing told Yicai, adding that some accountants abandon their professional ethics because of money temptations.

Audit regulation disappearing under Starmer as well?

And the US attack on audit regulation is hardly an isolated incident. The Financial Times is reporting that under the new government of Keir Starmer, UK ministers are exploring a further scaling back audit reform legislation. This from the country that brought you so many audit failures in recent years that the Boris Johnson government held public hearings. The names of the companies at the centre of UK scandals are too numerous to mention.

But apparently that's all water under the bridge now, as UK ministers explore shelving stricter audit rules for private companies, another such report from the Financial Times. One wonders how all this pushback around the world might affect Canada's audit regulator, CPAB. And don't be fooled into believing that US audit regulation does not affect Canada.

Whether it's the transparency of its investigations, its censures and penalties against Canadian firms, or, just recently, its warning to firms about relying on the work of specialists who help with fair value measurements and accounting estimates (which we've seen in Canadian audit inspection reports), the PCAOB has had a lot of sway worldwide on firms that audit US-traded public companies.

Thomson Reuters: Big bucks for accounting technology

Forget about our story on Bench Accounting. The well has plenty of water yet for any enterprising tech bro interested in launching another accounting startup. Because according to its own press release, the deep-pocketed Thomson family of Thomson Reuters and Globe and Mail fame is launching its second (!) Corporate Venture Capital Fund, valued at $150 million.

Continuing to operate under the name Thomson Reuters Ventures, Fund 2 will focus on early-stage technology companies across Legal Technology, Tax & Accounting, Fintech, Risk Fraud & Compliance, and News & Media markets [italics ours]. (And what venture fund press release today could not include a nod to "the transformative potential of Gen AI" in its press release?)

Apparently Thomson Reuters has money to burn: the company recently acquired tax software firm SafeSend for $600 million. The company is based in Michigan and has more than 200 employees.

More Big Four forays into Big Law

Following a win before the Arizona Supreme Court, KPMG has gained approval to practise law in the southern state, and created a wholly-owned subsidiary of the firm called KPMG Law US. “You’ve got to admire the gumption here,” says Going Concern sardonically. “They saw an opportunity to grab a previously untapped source of billable hours and went for it.”

And yet you might recall the failure of KPMG and its Australian foray in legal operations. The Australian Financial Review has done some wonderful reporting over the years on the topic, beginning with How the big four accounting firms failed to dominate law from 2021 to What went wrong with KPMG’s legal experiment just last summer.

Accounting Software News

In recent accounting software news, we note that Xero has introduced a new tagline: Your business supercharged. Xero will be launching a new marketing campaign featuring a series of ads that will begin rolling out across Australia, New Zealand, the UK, the US, South Africa, Canada, and Singapore.

And Caseware has appointed a new chief executive officer: David Marquis. Canadian Accountant readers may be familiar with David from his days at Intuit Canada and from the articles he wrote for us.