Sunday News Roundup 22.10.09: Economic news reports, Laurentian hourly billing and more Canadian accounting news
Wrapping up the odds and ends from the past week in Canadian accounting news
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TORONTO, October 9, 2022 – Much of the news that dominated headlines this past week was economic in nature. In addition to the usual handwringing about interest rates came three strong economic articles from the Toronto Star:
Canada’s wealthiest households see net worth drop by $200,000 as previous gains erased
Effective price of Toronto homes higher now than in February, after accounting for rate increase
Canada’s largest corporations avoided $30 billion in taxes last year, report finds.
RSM Canada released the third 2022 edition of its quarterly ‘The Real Economy: Canada’ report. The report examines how the economy is faring amidst growing inflationary and affordability concerns, while at the same time struggling to replenish a shrinking talent pool. Among the interesting takeaways are that recession talk is pre-mature, though economic headwinds are having an impact, and Canada will need to accelerate its immigration goals to address long-term labour and productivity problems.
And now, on to the rest of the news from the past week in Canadian accounting.
Laurentian docs reveal EY hourly billing
Sometimes the most interesting details are buried deep within more mundane stories. The collapse of Laurentian University in Sudbury, Ontario has been a sorry tale of financial mismanagement. Now, as the university emerges from insolvency, the court appointed monitor of the process, Ernst & Young, is seeking approval for a $4.75 million legal bill.
As reported by CTV Northern Ontario, the bill covers the average hourly rate of three firms: EY Canada ($606), EY FAAS ($562), and Stikeman Elliott ($928). The lowest hourly rate went to the accountants who prepared the financial statements. The highest rate went to the lawyers. That’s good reporting.
Accounting for natural assets
We are living in a world in which the pressure is intense for greater accounting and reporting of environmental assets and pollution. A new paper calling for recognition of the financial value of natural assets, from the University of Waterloo’s Intact Centre on Climate Adaptation, KPMG, and the Municipal Natural Assets Initiative, argues for the Public Sector Accounting Board (PSAB) to recognize the financial value of natural assets.
According to the Globe and Mail, the PSAB has indeed been scrutinizing ways to recognize the value of a wide range of natural settings, though their progress may not be fast enough for some. Meanwhile, the Carbon Tracker Initiative says Companies, auditors should be going further on climate risk disclosure, according to Canadian Press.
Canadian Carney weighs in on UK financial mess, swipes at Tories
The UK government of Liz Truss was having a bad enough week without the former governor of the Bank of Canada and the Bank of England weighing in. But the target of Mark Carney’s op-ed in the Globe and Mail was not Truss but Pierre Poilievre. In dismantling the UK’s economic strategy, Carney gets off some zingers such as, “Canada has a strong, expert central bank. It should be held to account, not replaced by a crypto algorithm.”
Year-end stress is approaching for SMBs
October is small business month in Canada. In some ways it’s a reminder that year-end tax reporting will soon be upon us. According to a new survey conducted by small business accounting platform Xero, two-thirds of small business owners think tax season considerably impacts their work-life balance. Of those surveyed, 44 percent of small businesses agree the process is a significant contributor of stress, and that cloud-based digital tools significantly help alleviate that stress.
For accountants, there were some interesting takeaways:
- The year-end tax process takes almost half of small businesses over a month or longer to complete.
- 88 per cent of small business owners agree that cloud-based tools save them money, and 61 per cent said the tools save them time, noting the simplicity and ease-of-use helps their day-to-day.
- Time is the biggest limitation when it comes to filing year-end taxes, followed by expertise and gathering data.
- Many small businesses continue to rely on old-fashioned paper and hand delivery to provide corporate documents to their accountant.
Quick Hits: Articles of Interest
KPMG Canada hires federal tax leader Brian Ernewein (Consulting.ca)
Finance Canada won’t rule out debt forgiveness for TMX (National Observer/Yahoo)
Tax & Spend: The Conservatives are less wrong than the Liberals on the costs of carbon pricing (Globe and Mail)
TFSA rules land two more taxpayers in hot water with the CRA (National Post)
Accountants work to shed ‘boring’ tag amid hiring crisis (Financial Times UK)
Ernst & Young Business Split May Signal a Larger Trend to Come (Bloomberg Tax)
By Canadian Accountant staff.