Abolish the Senate, replace it with Deloitte - Macleans.ca
 

Abolish the Senate, replace it with Deloitte

A lonely nation turns its eyes to auditors


 

As the New Democrats made a show of pointing out yesterday, analysts at Deloitte recently reported a “technical deficiency” with C-60, the spring’s budget implementation bill.

The legislative intent is to increase the tax rate applicable to most credit unions and caisses populaires from a federal rate of 11% to a federal rate of 15% on income in excess of the small business limit.

However, there is a technical deficiency in the legislation that adversely impacts credit unions and caisses populaires. The deficiency relates to the way “full rate taxable income” of a credit union or caisse populaire is determined for purposes of the “general rate reduction”. The result is that the federal rate applicable to income that is not eligible for additional deduction is subject to a 28% federal tax rate rather than 15%. This results in a tax rate 13% higher than expected.

Oops.

For the record, C-60 amends the Income Tax Rate as follows.

12. (1) Subparagraph (a)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following: (iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, determined for B in subsection 137(3) in respect of the corporation for the year;

(2) Subsection (1) applies to taxation years that end after March 20, 2013.

Of course, no one is perfect, the legislative process is complicated and mistakes will occur from time to time. This is surely not the first time a technical deficiency has been allowed to receive royal assent. Liberal MP Scott Brison would apparently like this to be regarded as a consequence of omnibus legislation, but possibly this is unfair. Or possibly I just see another convenient and overly simplistic conclusion to draw.

As Nick wrote two weeks ago, we are living in the golden age of the auditor. And having already brought accountability to bear on the expenses of several senators, Deloitte has now caught an error in legislation, the sort of service that is conceivably part of the Senate’s mandate. So an obvious compromise on the Senate reform debate now presents itself: Abolish the Senate and then lease the chamber to Deloitte to set up an office.


 

Abolish the Senate, replace it with Deloitte

  1. Or … we could farm out the PBO function to Deloitte. Serves two
    purposes … avoids putting a face to the office( thereby discouraging
    media focus) and can constructed as a P3 ( free marketish). What
    couldn’t a conservative love ?

  2. Sounds like this large auditing firm should be trading on its old moniker. Uncovering a legislative glitch like this was a real Deloitte Touché.

    Cue the groans…

  3. Canadian Author Michael Harris on Stephen Harper:

    He’s all about deconstructing democracy, channelling public
    money to a venal corporate sector, and kneecapping anyone who gets in the
    way. It’s about turning Canada into a
    militarized petro-state with Beatle music playing in the background.

    http://www.ipolitics.ca/2013/07/01/a-government-running-on-fear/

  4. If the senate was allowed to touch money bills, you might have a point on this one, Aaron.