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TORONTO, July 10, 2022 – The big event of the week was the Rogers Communications outage which disrupted internet connections for hundreds of thousands of Canadians, businesses and services including accountants and law firms accountants, and even the payment of property taxes. Coming so soon after Rogers’ messy takeover of Shaw Communications, this second service outage in 15 months promises to be very bad for Rogers, as well as for Canadian Internet security as a whole.
York University professor Richard Leblanc, a governance expert and contributor to Canadian Accountant, told The Canadian Press that “the outage presents a learning opportunity for threat actors such as government-sponsored hackers. ‘Russian State’. Rogers blamed the outage on a “maintenance upgrade”, although many online commenters expressed skepticism. And now, on to the rest of last week’s news in Canadian accounting.
The loss of the court of Paletta will cost a pretty penny. Will the case go all the way to the Supreme Court?
The wealthy Paletta family of Burlington, Ontario are no strangers to tax disputes. The Tax Court of Canada ruled their Hollywood investment strategy a hoax in 2019. Now, a recent Federal Court of Appeal ruling could end up costing them a pretty penny, unless they don’t. choose to challenge the decision all the way to the Supreme Court. from Canada.
The case involves a currency exchange system which, as we reported in 2020, was also used by former members of the Toronto Maple Leafs. While David Rotfleisch provides an analysis of the case in Canadian Accountant, we have taken a look at some of its more curious aspects. For example, the Paletta Estate initially won the case in Tax Court before Judge David E. Spiro, which was the subject of a controversial incident involving the University of Toronto.
Spiro ruled that currency trading activities give rise to a business. Incidentally, among the precedents cited in the case was Friedberg v. Canada, 1993, an appeal of a FCA decision in which one of the lawyers involved was David E. Spiro.
The unanimous decision in the Paletta case is particularly harsh: “the reasons of the Tax Court…are not only incorrect, they are implausible” and “the Crown has succeeded in demonstrating that Mr. Paletta demonstrated gross negligence by presenting its business losses as business losses even when they were not. The FCA essentially ruled that the entire scheme was intended to create tax losses, not “the pursuit of profit”.
With millions of dollars at stake, will the case go to the Supreme Court? The tax community, which celebrated the original Tax Court decision, appears dismayed by the FCA’s “surprising result”. For the media, however, the Paletta tax cases are the gift that keeps on giving.
Go east, young accountant
Mylène Lapierre, president and CEO of CPA New Brunswick, caught the media’s attention this week with a report on the contribution of the accountancy profession to the provincial economy. She took the opportunity to showcase the province as an attractive location for accountants – especially young accountants and internationally trained individuals – as the current workforce nears retirement.
Accounting firms look to the post-pandemic world
Business in Vancouver, the business publication published by Glacier Media, recently spoke to several accounting firms about working in the post-pandemic world. Among the issues discussed were hybrid working models and legislation around disconnecting email after hours. Among the revelations, companies are cutting their travel budgets as they learned during the pandemic that work can be done competently via video conferencing.
RCAF bonanza baffles residents of Prince Edward Island
Anne of Green Gables would kick up her heels. But residents of Prince Edward Island were just troubled this week by a boon from the Canada Revenue Agency, which combined a whole bunch of tax refunds into one check and all labeled as “Prince Edward Island sales tax credit”. According to the CBC, the people of the Maritimes were not impressed and had to investigate to find out why they had been so lucky.
CRA loses fight with construction foreman over driving-to-work expenses (Financial Post)
NDP calls for action to ensure the rich and powerful pay their fair share (NDP.ca)
CEOs of Canada’s largest companies saw their salaries increase by 23% in 2021 (Globe and Mail)
Edmonton realtors push back on idea of councilor mansion tax (CBC)
Will the second pillar block the real estate bearings of multinationals? — Part 1 (Bloomberg tax)
Why the US dollar will be replaced as the dominant global currency — sooner than you think (Toronto Star)
The stock market plunges. What should you do to protect your investments? (Toronto Star)
Former Wirecard accountant admits falsifying documents for KPMG special audit (Financial Times)
EY fuels accounting credential inflation by calling senior executives a ‘partner’ (Financial Times)
By Canadian accounting staff.