Letters and tweets — October 2014

Readers respond to the June/July and August 2014 issues of CPA Magazine via mail and Twitter.

Jumped the gun

Talk about a deceptive title: From Olympic Champ to CPA (June/July). How could you attribute the CPA designation to someone who has not yet become a CPA?

If my son is planning on becoming a doctor and has enrolled in medical school, should he be able to put MD in a sentence describing himself?

Harold Schulz, Grimsby, Ont.

Great mag, bad advice

CPA Magazine is professional, relevant, with good breadth and depth of topics — a magazine we can be proud of and share outside the profession. My husband, a university professor, is now an avid reader as well.

However, we were both mortified by advice given in Workplace, Business Etiquette (April).

Louise Fox’s advice perpetuates a problem. People who are let go feel shunned and people who worked with them feel awkward, making the whole thing even worse than it has to be.

Frankly, getting let go is a common business decision, happening all the time to all kinds of folks for all kinds of reasons. Pretending it isn’t happening or that relationships suddenly are irrelevant isn’t healthy for anyone.

Fox suggests people should essentially "duck and cover" and stay mum, or say something inane like "I’m sorry" or "Is there anything I can do to help?"

In fact, what people need in this situation is quite the opposite. The person let go needs acknowledgment that he or she was valued, the experience was meaningful even if it’s ending and that personal connections can prevail.

For example, a colleague could say, "I’m going to really miss working with you. Here is my personal email. Let’s connect in a few weeks and do coffee." It’s OK to show appreciation and express a desire to reconnect in the future.

Samantha Hurwitz, Toronto

A taxing debate

I am disappointed by CPA Canada vice-president, taxation, Gabe Hayos’ response to Martina Wood’s letter (August). Wood questioned the logic of Canada being in the race to have the lowest corporate taxes. In his response Hayos stated, "CPA Canada believes that keeping corporate tax rates low is in the best interest of the Canadian economy." He cites a PwC tax study (with information gathered from 63 members of the Canadian Council of Chief Executives) showing a 33.4% total tax rate on pretax profits.

First, the PwC tax study was flawed and not impartial (see Don’t buy the numbers spin, by Andrew Jackson, The Globe and Mail, April 17).

CPA Canada needs to encourage debate, not stifle it by citing studies from nonindependent sources without peer review. Has CPA Canada reviewed more objective economic data to arrive at its position?

As to CPA Canada’s position on low corporate taxes, has there been any formal input or debate from all (or even part) of its membership? Has such a position been drafted and approved? The taxation debate in Canada and the US is 99 parts politics and one part economics, with unelected representatives putting forth a "position" on both sides. CPAs are a diverse group and CPA Canada does not speak for its members when it comes to such political issues. If CPA Canada has a position, then back it up with solid data and present it to the membership for debate. Even Warren Buffett has questioned low income tax rates and their resulting inequities.

Doug Welsh, Calgary

I’d like to add my voice to that of Martina Wood when she says CPA Canada should not be advising Ottawa to keep corporate taxes low.

Her point is that the view expressed by CPA Canada is not reflective of the views of our membership. I also find Gabe Hayos’ reply to sound like a government line. His adding property taxes, consumption taxes, etc., adds nothing as individuals also pay those taxes. In the end his argument is dismissed when he states, "Numerous studies have shown that corporate taxes are not ultimately borne by the corporation."

Ric Noble, Torbrook Mines, NS

In my opinion, Gabe Hayos’ reply to Martina Wood’s letter was misguided and misleading.

CPA Canada should be encouraging debate on this topic. Differences of opinion on this subject should come from the general membership and not the directorate.

While Wood’s letter made reference to specific sources, the response was general and not substantiated.

History has demonstrated that substantial growth in the Canadian economy occurred during periods when corporation tax rates were higher.

Has it not been acknowledged that trickle-down economics is not working?

If Hayos is concerned about employee wages, maybe he should be advocating for a higher minimum wage and a tax system that encourages full-time employment over the abundance of part-time employment that currently exists.

Most of the extra taxes paid by corporations listed in the reply also apply to individual taxpayers.

Further, various corporations receive subsidies through grants and allowances that were not mentioned.

A recent study by the Fraser Institute indicates that the average family paid 41.8% of its income in taxes, compared with the 33.4% paid by corporations as mentioned.

While there are no ready solutions to this matter, reasonable remuneration and a sense of accomplishment contribute to greater productivity, economic growth and return on investment.

Allan Silverman, Montreal

In my opinion, Martina Wood is spot on, and Gabe Hayos’ comments leave a lot to be desired. Canada has dropped its corporate rates recently and well below the US benchmark rates for one reason only: to attract investors who would otherwise do business elsewhere.

Hayos makes no mention of the key difference between property taxes, payroll taxes, etc., which are always charged against a corporation, and corporate taxes, which are only charged against profits.

There are many corporate standards nationally that need to be brought into international standardization. A short list would be corporate tax rates, executive remuneration and carbon pricing. CPA Canada should take a lead position in this battle.

Dave Smith,Vernon, BC

EDITOR’S COMMENT: For another point of view on this subject, please see Corporate tax: The bigger picture

More taxing issues

I have never been able to understand how the IRS can operate in Canada the way it does (Taxing issues for US expats, August).

The Canada-US tax treaty has a nondiscrimination Article XXV, which "shall apply to all taxes imposed by a Contracting State," thereby including US extra-territorial taxes based on citizenship. This article clearly states that US citizens resident-in-Canada are not to be exposed to more burdensome taxation and connected requirements than Canadian citizens resident-in-Canada.

The constitutional Charter of Rights also specifically prohibits discrimination based on national origin.

Gilbert Wilcott, North Vancouver

Yes, we have movers too

While the cover story on the up and comers was great (On the Move, August) it was disappointing that there were no profiles from Atlantic Canada — especially given the lead in to the article noted those featured were from across Canada. There are plenty of fast-rising young professional accountants in Canada’s Atlantic region as well.

Peggy Coady, St. John’s, NL