CPA Canada responds to 2023 federal budget
TORONTO, March 29, 2023 (GLOBE NEWSWIRE) — Chartered Professional Accountants of Canada (CPA Canada) is encouraged that the 2023 federal budget proposes new measures on financial crimes. We have experts available to comment further on these issues:
On predatory lending:
The federal budget lays out intended changes to the Criminal Code to protect Canadians against predatory lending, including lowering the current criminal rate of interest from the equivalent of 47 per cent APR to 35 per cent and adjusting the exemption for payday lenders to cap the cost of borrowing at $14 per $100.
“Predatory lenders can take advantage of some of the most vulnerable people in our communities, including low-income Canadians, newcomers, and seniors—often by extending very high interest rate loans,” the budget states on page 36.
CPA Canada experts can help wade through the complex world of predatory lending and how it affects Canadians who are left behind by mainstream institutions.
On protections against cryptocurrency exposure:
The federal budget signals the government intends to introduce new measures to protect Canadians from “the emerging risks associated with crypto-assets,” including the ability to require financial institutions and pension funds to disclose their exposure to cryptocurrency markets.
“Ongoing turbulence in crypto-asset markets, and the recent high-profile failures of crypto trading platform FTX, and of Signature Bank, have demonstrated that crypto-assets can threaten the financial well-being of people, national security, and the stability and integrity of the global financial system. To protect Canadians from the risks that come with crypto-assets, there is a clear need for different orders of government to take an active role in addressing consumer protection gaps and risks to our financial system.” (page 175)
CPA Canada can offer further insights on our support for enhanced transparency, processes and controls when it comes to crypto markets, and the importance of high-quality audits in this emerging industry.
On whistleblowing legislation:
CPA Canada is encouraged to see that the federal budget proposes to “provide whistleblowing protections for employees who report information to FINTRAC.” (page 172) However, CPA Canada firmly believes that more work needs to be done to strengthen the effectiveness of Canada’s Anti-Money Laundering regime.
Financial crimes inflict serious costs on Canada’s economy and society. We look forward to more concrete measures to launch a national whistleblower reporting and protection framework. In comparison to other jurisdictions, our country is lagging. It is critical that Canada implement comprehensive and effective provisions for whistleblowers in the public and private sectors.
CPA Canada can elaborate on the value of whistleblowing protections, including incentives, for encouraging and enabling the contribution of information to Canada’s anti-money laundering regime.
CPA Canada also offers reaction on other important budget measures, including fiscal management and sustainability:
On fiscal management:
Canada’s budgetary balance has worsened by close to $70 billion over the next five years. Coupled with additional spending, it no longer benefits from increased revenues due to higher than anticipated economic performance or inflation.
The good news is that the federal debt-to-GDP ratio will continue to decline from 2024-25 onward. “However, it is worrisome that balancing the budget is no longer on the horizon,” says David-Alexandre Brassard, Chief Economist. “We remain concerned about the federal government’s focus on long-term reduction of the debt-to-GDP ratio without addressing spending or debt-reduction targets. A more prudent approach would make sense in the event of a further economic slowdown.”
On sustainability:
CPA Canada welcomes the emphasis in Budget 2023 on fostering a more competitive investment environment with a package of clean energy incentives to support Canada’s transition to a net-zero future. The measures include tax credits to promote clean energy investments, positioning Canada to stay competitive with the U.S., which recently introduced multiple incentives in the Inflation Reduction Act.
“We are pleased that the government took a targeted approach to addressing competitiveness gaps in key strategic sectors,” Rosemary McGuire, Vice President, Research Guidance and Support.
For more in-depth analysis or to discuss other budget-related topics with our experts, contact media@cpacanada.ca.
