Friday News Roundup 21.07.02: Bill C-208, DST opinions, CHRP calculator and more
Wrapping up the odds and ends in this week’s Canadian accounting news
TORONTO, July 2, 2021 – The passage of Bill C-208 was the biggest news in the world of Canadian accounting but the story’s not over yet — let’s get right into our weekly roundup of the odds and ends from the world of Canadian accounting, starting with the biggest story.
Bill C-208 finally a done deal … or is it?
Conservative MP Larry Maguire’s Private Member’s Bill C-208 received Royal Assent this week. Minority governments are funny things, as the Tories teamed up with unlikely allies in the Bloc Québécois, Greens, NDP and a handful of Liberals to push through An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation). The Trudeau government opposed the bill and 128 Liberals voted against it.
The bill addressed the longstanding opinion that in Canada it is more profitable to sell family businesses, such as farms and fishing operations, to outsiders rather than to one’s children. At least, that was the common narrative, but you could sense the doubts of experts, even in typically empathetic quarters. While Deloitte championed the bill in testimony (so did the CFIB and insurance brokers!) and KPMG lauded the coming amendments, Allan Lanthier in the Financial Post called it a high-income tax avoidance scheme on steroids.
So is Bill C-208 really a done deal? Well, maybe not. Firstly, the government’s own announcement was skittish: “The federal government is committed to facilitating genuine intergenerational share transfers, while preventing tax avoidance that undermines the equity of Canada’s tax system.” But the possibility of some political shenanigans playing out as we approach an election is strong. We’ll have more on this next week.
Digital services taxes began this week
Some foreign digital services providers may have started to charge sales tax this week (on Canada Day). “Canadians may begin to see GST/HST charges when they make purchases from affected businesses,” said a government press release. CPA Canada has already come out with its concerns over the DST, which include double taxation, anti-competitiveness, compliance and more.
But it should be noted that the DST is very popular in parts of Canada. In a recent episode of The Backbench, a podcast from Canadaland, Le Devoir journalist Emilie Nicolas reminded listeners that Quebeckers are in favour of legislation such as Bill C-10, commonly known as “the Streaming Tax,” which comes from a place of “protecting cultural diversity.”
Doug Ford scraps staycation summer
According to the Globe and Mail, the Ontario government is ragging the puck on its proposal to give tax credits to Ontarians who splurge on local vacations. That won’t be popular with travel and tourism businesses, which are often in rural ridings, but the Tories can’t figure out to design the plan properly. Worse yet, the right-leaning Fraser Institute opposes the idea, and accounting professor Rick Robertson of Western says Ford should just give the money directly to businesses.
Online calculator for CHRP CEWS
If you’re a Canadian accountant advising business owners or managing their books, you might find this online calculator announcement useful: The Government of Canada launches online calculator to help businesses apply for the new Canada Recovery Hiring Program. “This calculator integrates the new CRHP with the Canada Emergency Wage Subsidy (CEWS), automatically showing applicants which subsidy will provide them with more support, based on the information they enter.”
Excel wasn’t designed for genetics researchers. It was designed for accountants
The Financial Post reprinted a long piece by Tim Hatford this past week, originally published in The Financial Times, called “The tyranny of spreadsheets.” It’s basic premise is that Microsoft Excel cannot be relied upon for accuracy when Big Data gets too big. Even Bill Gates knows this: “It’s good to have someone double-check.” The weakness has become more noticeable during the pandemic year.
Cannabis class action goes up in smoke
As reported by Investment Executive, an Ontario Court blew smoke at a potential securities class action against a cannabis company, Cronos Group Inc., as the legal argument was rolling-paper thin. The court found that it was more likely that the company’s share price took a big hit due to the onset of the pandemic rather than accounting errors. Although the court cited a lack of evidence of market impact due to accounting issues, one must note that cannabis sales actually increased during the pandemic. So there’s that.
Canada among 130-nation deal to overhaul global corporate tax rules
Bulk of Bridging funds’ loans under review by PwC
MNP names Robert Dean as regional managing partner for Atlantic Canada
Picture of greenhouse gases tied to Canadian lending is taking shape
By Canadian Accountant staff.