Technology Taxes, Portapique, CPA Sellers Market and Other Canadian Accounting News
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TORONTO, July 24, 2022 – In a week where no business or economic story made headlines, there were several stories of interest to Canadian accountants. Take, for example, the Globe and Mail series on Amazon and the retail giant’s strategy to avoid Canadian taxes. Typical transfer pricing tactics for most accounting professionals, including David Rotfleisch (a frequent contributor to Canadian Accountant), as discussed in Inside Amazon’s strategy to protect its profits from Canadian taxes.
The Globe followed up this story with reaction business groups and conservatives, who say the tax system should be changed, and an editorial titled Why are Amazon and other multinationals able to protect some of their profits from taxes? Blame Canada. Amazon was also mentioned in What can be done about rising inflation and rising taxes in Canada?a Bloomberg Tax article, which argues that large multinationals (like Amazon and Enbridge) are likely to pay lower tax rates than their own workers, and that inflation will seriously hamper government tax revenue.
Canada’s national (business) newspaper appears to support the federal government’s proposed digital services tax, if the OECD cannot follow through on its minimum corporate tax plan. And now, on to the rest of last week’s news in Canadian accounting.
The Portapique mass murderer showed a clear pattern of money embezzlement
One of the mysteries surrounding Gabriel Wortman, the Nova Scotia man who killed 22 people in April 2020, was where he got the money to support his lavish lifestyle. A fundamental document prepared by the Financial Accounting Management Group (FAMG) revealed that the killer used “illegitimate or suspicious means” to raise funds. From a forensic perspective, sums of money and schemes an interesting read.
The FAMG is a government agency created in 1998 following the implementation of the Proceeds of Crime Act to support both the Royal Canadian Mounted Police and the Prosecution Service in the investigation of proceeds crime or money laundering. Rumor has it that Wortman worked as an informant or drug dealer. According to the FAMG, “while there are no definitive answers about the sources of all of its income, there is a clear pattern of abuse”.
Business Continuity Challenges CPA Canada Hiring Trends Article
The American Accounting Website Continuity of exploitation is notable for its harsh language and mocking tone. He also does good reporting, including commenting on Canadian Accountant stories. This week, he questioned the claims of Work-life balance preferred over big salaries, say CPAs in a story he called Canadian accounting firms getting rid of bonuses so they can pay more?.
Apparently, base salary is still important, but candidates want work flexibility. But the base salary is increased by reducing the annual bonuses. Continuity of exploitation reminds CPAs that you don’t have to take a pay cut to have the privilege of working remotely. All accounting firms are competing for talent these days on both sides of the border – and, in our small contribution to the conversation, Canada’s unemployment rate is at an all-time low. Unlike the real estate sector, it is a seller’s market.
Hands off business when it comes to CEWS
The Breach, one of many new digital journalism platforms to emerge in recent years, reports that the CRA penalized just 185 businesses for misusing COVID money, while targeting 1 million Canadians. The CRA refused to disclose to The Breach how much money has been refunded to date and by whom. The Breach also points out that benefits have been paid to companies that have laid off workers and increased dividends during the pandemic.
Canadian accountants would be unsympathetic. As we reported in 2021, CPAs believe companies are much more deserving of government largesse than individuals. Seven in 10 CPAs said the government had been too generous to individuals during the pandemic, while nearly seven in 10 CPAs (67%) said the support was reasonable or not generous enough for Canadian businesses.
Technology: Business tax services risk falling behind
Thomson Reuters has published its annual report Report on the state of the Department of Corporate Taxation last week, which revealed that tax reform remains the main strategic challenge in 2022, with a particular focus on the government’s legislative activity in all areas. Apparently departments feel even less technologically prepared to deal with upcoming regulatory changes than they did last year.
Who is responsible for the mess at Pearson Airport?
Finally, the Toronto Star had a good article about delays at Pearson airport, which has earned Toronto’s airline hub a reputation as one of the worst airports in the world. Their conclusion? In the rush to recover from the pandemic, Air Canada sold more tickets than the airport or itself could handle, even though it should have known workers would not be returning to Pearson soon – for a variety of reasons . We only mention this because the President and CEO of Air Canada is a CPA.
Articles of interest
Why No One Gets a Tax Advantage When You Donate at Checkout (Radio Canada)
Why older CEOs hate letting employees work from home (Financial item)
UK audit reform five years behind schedule, regulator says (Bloomberg tax)
EY suffers from a pay problem (Accounting today)
Tesla’s Bitcoin dump leaves an accounting mystery in its wake (Bloomberg tax)
PC Bank Wins Appeal Partly Related to Excise Tax Act Reassessments (The Lawyer’s Daily)
By Canadian accounting staff.