Sunday News Roundup 24.04.21 Layoffs at PwC, unrest at MNP BC and more Canadian accounting news

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TORONTO, April 21, 2024 – A new round of layoffs has hit employees at PricewaterhouseCoopers in Canada. About 60 people were affected, out of more than 7,700 partners and employees across Canada, according to a source familiar with the matter. The layoffs follow the layoff of approximately 150 employees, or approximately two percent of its workforce, by PwC Canada in November 2023.

Anuja Agarwal, spokesperson for PwC Canada, told Canadian Accountant: “We routinely review our business model to best meet the changing needs of our clients, to enable us to perform differently as we adapt and respond to changes in the market. Due to our most recent review, we have had to eliminate some roles. These decisions are never easy to make. We are committed to treating people fairly and have offered all affected employees packages that go above and beyond legal requirements.”

A Toronto-based employment law firm has raised the number on its website to 140 employees, closer to the 150 employees — about two per cent of its workforce — that the accounting firm recognized in November 2023. The layoffs come at a time of workforce cuts across the Big Four globally, particularly in consultancy services, amid an industry-wide slowdown in demand for certain services.

And now on to the rest of the past week’s news in Canadian accounting.

Tik Tok is causing cleantech unrest around MNP in BC

Homegrown national accounting firm MNP is at the center of a controversy over allegations of conflict of interest in British Columbia. According to the CBC, allegations about CleanBC’s mismanagement of grant money originated from the opposition, but really took off when a small business owner posted a video on TikTok asking whether MNP was in a conflict of interest due to both grant administration as grant writing services. to customers.

Initially, the NDP government appeared to shrug off the allegations, but made a quick about-face, saying “new information” had come to light and ordering an investigation by the provincial auditor general. (The opposition wanted a special prosecutor.) Rob Shaw, a reporter at Glacier Media, dug deep into the allegations, noting that MNP also managed the BuyBC farm subsidy program.

The Globe and Mail noted that MNP’s administration of the Commercial Vehicle Innovation Challenge (CVIC) and the Advanced Research and Commercialization (ARC) grants have been suspended. Several media outlets, including the CBC, Vancouver Sun and more, have used the inflammatory phrase “alleged kickbacks.” For its part, MNP wrote in a media statement that the “allegations are false and misleading.”

As for the small business owner, he seems like exactly the kind of entrepreneur Canada needs more of: a former logger with environmental credentials who started a business in his parents’ basement building and servicing hybrid logging trucks. By 2021, he had already built a following of over 400,000 people on his Tik Tok channel. As Rob Shaw noted, the speed with which the NDP government was brought to its knees by a viral TikTok video is remarkable.

Liberals try to capitalize politically on capital gains

Lots of gnashing of teeth this past week over the Liberals’ increase in capital gains. Where people tended to align in the debate had a lot to do with vested interests – business on the one side, critics of wealth inequality on the other. CPA Canada seemed to bristle at the details and even Bill Morneau, once tarnished by a similar tax increase, dropped by to criticize his former colleagues.

This article from the Canadian Press summarizes the arguments nicely. But it will be interesting to see what happens with the increase in capital gains. Chrystia Freeland said she expected a backlash, but the Liberals have a poor track record of sticking to their policy changes (see bare trusts – or UHT, natch). While the increase helps liberals pay for expensive programs and positions them as more populist, a new government led by Pierre Poilievre could easily roll back these programs (thus sparking criticism that conservatives have always worked for the rich).

Canada Revenue Agency taken for a ride on carousel plan

The CBC finally got its hands on a court document it has been wanting for months in the bizarre Gold Line Telemanagement case before the Tax Court of Canada. It’s hard to believe that the CRA, which constantly warns consumers about tax fraud, could have paid out more than $100 million “in what it now calls ‘illegitimate’ tax refunds,” according to the CBC.

It all has to do with carousel constructions, to which The Fifth Estate devoted an episode in 2023, called Swindling the System. Gold Line is represented in tax court by KPMG Law, which wanted a CRA affidavit expunged from the public record. KPMG ultimately reversed its position at the end of last year. The affidavit alleges the CRA lost $37 million in taxpayer money through a scheme involving a complex network of supply chains.

According to the CBC: “Previous documents filed in the case, and not under seal, state that while KPMG Gold Line provided external ‘accounting support’ and audited its financial statements, it did not prepare the GST returns in question. ”

Quick hits: interesting articles

Canadian

Do rich Canadians pay enough taxes? That depends on how we define ‘fair share’ (CBC).
Canada to push ahead with digital services tax on global tech companies from 2024 (Reuters)

International

PwC to undo controversial US tax split (Financial Times)
Accountants and the 2024 elections (Accounting Today)
The IRS 2024 Dirty Dozen (Accounting Today)

By staff of Canadian accountants.