Business

CRA asks Shopify for Canadian business records: CEO

Published

1 year ago

June 25, 2023

Shopify CEO Tobias Lutke is ready to put up a “fight” over what he describes as an “overreach” by the Canada Revenue Agency (CRA).

In a tweet, Lutke said the Ottawa-based e-commerce company was asked to hand over tax records of more than 121,000 Canadian stores from the last six years.

“I don’t particularly want a fight with the CRA (Canada’s tax authority)- but we got asked to backchannel them 6 years of records for all Canadian Shopify stores,” Lutke tweeted on Friday.

“This feels like low-key overreach to me. We will fight this.”

CTVNews.ca has reached out to the CRA and Shopify but did not receive a comment in time for publication Saturday.

While there are no details yet on why the CRA is inquiring into Shopify’s records, it’s not unheard of for the agency to go after e-commerce platforms over tax evasion concerns, like it did to Paypal. eBay was also subject to an inquiry over high-earning sellers on its website, requiring those earnings be reported to the agency.

I don’t particularly want a fight with the CRA (Canada’s tax authority)- but we got asked to backchannel them 6 years of records for all Canadian Shopify stores. This feels like low-key overreach to me. We will fight this.

— tobi lutke (@tobi) June 24, 2023

Federal Court records show that the minister of national revenue filed a notice in April involving Shopify, citing sections of the Income Tax Act and Excise Tax Act that relate to obtaining authorization to acquire documents or information.

Both acts require approval from a Federal Court judge in order to obtain such documents through a third party, in this case Shopify.

“It’s pretty clear that the CRA or the minister of national revenue will actually meet that requirement,” Mohammed Hassan, a chartered professional accountant and partner at the Toronto-based accounting firm Tax Heroes, told CTVNews.ca in a phone interview Sunday.

A judge would have to be satisfied that the group in question is “ascertainable” or can be identified by the CRA, meaning it isn’t just a random request, Hassan says, and that it is also related to tax compliance.

Along with the examples of PayPal and eBay, Hassan noted that the CRA had previously asked for records from the Canadian cryptocurrency exchange company Coinsquare. Both sides reached an agreement in March 2021.

He also notes that while there is generally a three-year statue of limitations when it comes to auditing someone, the CRA can go back further if evidence exists of misrepresentation or gross negligence.

Hassan added that the statement by Lutke is probably for reputational purposes to show that he is defending Shopify merchants.

“Most likely the court will issue that order and they (the CRA) will be able to get that,” he said.

SHOPIFY LAYOFFS

The news comes as Shopify reported it would reduce its workforce by 20 per cent after 1,000 employees were laid off last summer. The company’s first quarter earnings report, released on May 4, also stated that the company would sell its merchant’s tool, Shopify Logistics, to supply chain management company Flexaport.

The report revealed that Shopify earned US$68 million in the first quarter of the year ending on March 31, 2023. Revenue also rose 25 per cent to US$1.5 billion from the previous year.

WHAT THIS MEANS FOR MERCHANTS

Hassan says this request by the CRA could be a step toward a potential audit of some merchants.

“They won’t have income information for a lot of the store merchants and once they get that information from Shopify, then they can use that information to check in with their records and then they can audit people based on that information and do different types of assessments,” he said.

Merchants who are already compliant with their taxes should not have to worry. But this could be concerning for any who have not reported all of their earnings, or who have not charged GST or HST where they needed to, Hassan says.

Taxpayers who attempt to fix errors or emissions in their tax filings could try to get some interest or penalties waved through the Voluntary Disclosure Program.

Although interest and penalties won’t be waived if additional tax information is provided through an enforcement order, Hassan says it is probably a good idea to apply anyway.

With files from the Canadian Press

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Business

Carry On Canadian Business. Carry On!

Published

2 days ago

October 22, 2024

Steven Kaszab

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

Business

Imperial to cut prices in NWT community after low river prevented resupply by barges

Published

2 days ago

October 22, 2024

Anne Joseph

NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

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Business

U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

Published

2 days ago

October 22, 2024

Anne Joseph

TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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