Description: It’s a bit of a mystery. The average age of new permanent employees joining the public service is 37. That seems a bit long in the tooth, don’t you think? This is causing some to conclude that millenials are avoiding the public service of Canada. This does not bode well for the level of talent the public service can provide to help meet Canada’s challenges.
Date: April 10, 2017
1) If you graduating, have you considered a career in the public service? Why or why not?
2) What kind of roles might be available for accountants in the public service?
3) What does the coming retirement of so many baby boomers mean for the composition of the public service?
Description: Tax reform in Canada is a topic in the air as Conservative Party candidates vie for the leadership post and talk of tax reform under U.S. President Trump spurs conversations around Canadian competitiveness. National Post columnist Andrew Coyne contends that it has been over 30 years since Canada has seen significant tax reform. Mr. Coyne argues that various problems with calculating income can be addressed by enacting a system based on a personal consumption tax and a corporate net cash flow tax.
Date: April 10, 2017; updated April 11, 2017
1) If Mr. Coyne’s ideas were adopted, would this lessen the focus on corporate income statements and increase the visibility of cash flow statements?
2) What impact would these changes have on employment of accountants?
3) How likely is it that the federal government will go ahead with these changes?
Description: With an overheated housing market in Toronto, Canadian Finance Minister Bill Morneau is set to meet with provincial and municipal officials to develop ideas on how policy makers might tame this housing bubble. Tax policy offers a number of options for intervention. For example, the federal government could raise the capital gains tax on homes that don’t qualify as a principal residence. Further, the federal government could raise the amount buyers could ‘borrow’ from their RRSPs to fund home purchases.
Date: April 7, 2017
1) Are you graduating this spring? Is purchasing a home on the horizon for you?
2) Which of the polices proposed in the Globe and Mail article do you feel would be the best for taming the housing bubble in Toronto?
3) What will be some of the impacts on taxpayers if the federal government enacts these measures?
Description: Last week this blog discussed how the assessment service in Province of New Brunswick invented renovations for over 2,000 residential properties in the province, causing big increases in tax assessments. The Premier has responded to the growing crisis by appointing a retired appeal court justice to examine the system. Anonymous insiders have claimed that invented assessments are the result of government direction to fast track a new assessment system.
Date: April 3, 2017
1) Do you think that using the Auditor General’s Office (rather than a retired judge) to investigate these problems would offer a different perspective?
2) Notice that rushing the system changes through is listed as a possible cause of this crisis. During your university courses, have you studied any famous cases where rushing system changes resulted in disaster?
3) Do you think that the actions in this case could possibly be called a fraud?
Description: In an intriguing display of public outrage, approximately 200 protestors gathered outside Bombardier headquarters in Montreal to decry the bonuses granted to company executives while taxpayers have been bailing out the company. With both the federal and provincial governments kicking in over a billion dollars, citizens were outraged that the company opened up the cash box for its management. In response, Bombardier announced they would defer the bonuses until 2020.
Date: April 2, 2017
1) Were you familiar with the government assistance to Bombardier? Do you agree with this as a wise use of taxpayers’ money?
2) If you were a senior executive at Bombardier, how would you have responded to this protest?
3) What does accounting theory teach us about structuring compensation for executives?
Description: And in a second accounting update from the small Province of New Brunswick, a recent investigation by the CBC has revealed that government officials invented renovations for over 2,000 residential properties in the province, creating big increases in tax assessments for the homeowners. An email revealed that government invented the renos when assessment officials did not have the resources to confirm whether or not they had taken place. The Premier is stating he knew nothing of the invented renovations.
Date: March 31, 2017
1) Where can you read about accounting for land and real estate in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?
2) What do you think may have prompted those in the civil service to have taken the rather unusual (and unethical) step of inventing renovations?
3) Do you believe the government ministers in charge of the matter should resign?
Description: Critics and citizens alike have long decried the lofty election promises politicians make during election campaigns. But now the Liberal government of the tiny Canadian province of New Brunswick appears to be trying to change this dynamic by proposing a law requiring political parties to cost their election platforms. Violators would be punished by being forced to suspend their campaign advertising. Of course one thing users might note is that there is no audit provision in the proposed legislation.
Date: March 29, 2017
1) What do you think of the idea of forcing politicians to cost election promises? Will it work?
2) What might be some of the techniques an accountant could use to cost election promises?
3) What are some of the issues that might emerge if the information is not audited?
Description: While Saskatchewan, Alberta and the federal government in Ottawa have all delivered budgets with big planned deficits in recent weeks, last week the Province of Quebec issued a balanced budget. The budget also promised an income tax cut for Quebec citizens. Could this have anything to do with a coming election in 2018?
Date: March 28, 2017
1) Were you surprised to see that the Quebec government issued a balanced budget in this year of deficits?
2) What factors do you think contributed to the province’s fiscal good news?
3) If you were the Minister of Finance, would you have cut taxes now, knowing that Quebec still has a huge debt load?
Description: This week’s federal budget had a number of interesting measures, and one that seems to be very strategic is the announcement of close to $118 million in funding for 25 research chairs in an effort to recruit “top-tier international scholars.” Following the U.S. election and the earlier Brexit vote in Britain, the promise of more dollars for science research in Canada may be just one more factor that helps scientists in those countries decide on Canada as an attractive place to live and work. One aspect of the funding is that it is intended to allow universities to respond quickly to serious inquiries from overseas scientists.
Date: March 23, 2017
1) Did you follow the news around the federal budget or discuss it in any of your university classes?
2) Do you see the funding on these research chairs as a good strategic move?
3) As a student, were there any measures in the federal budget that impacted you?
Description: Critics may say that share buybacks take away from resources for future growth. But in his latest letter to shareholders of Berkshire Hatheway, Warren Buffet argues that buybacks can be a good move, as long as the price is right. One purpose of the buyback can be for management to signal concerns that the share price is undervalued.
Date: March 20, 2017; updated March 21, 2017
1) Where can you read about share buybacks in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?
2) After reading through the article, what is your feeling on use of share buybacks?
3) Buffet says “both American corporations and private investors are today awash in funds looking to be sensibly deployed.” This seems to be an enviable situation for a business. But what are the dangers of too much cash?