www.lexisnexis.ca Vol. 26, No. 11 Mid-September 2010
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Playing offence when others get defensive

When the going gets tough, the tough get going. That adage, it would appear, aptly describes the corporate mindset of George McClean, vice-president and general counsel at Acklands-Grainger in Richmond Hill, Ont.

Instead of battening down the hatches as many executives did during the recession, he dug in and quarterbacked an aggressive multi-faceted strategy to bring the firm onto the world stage.

Those efforts landed him the 2010 Creative Leadership Award presented in June by the Certified Management Accountants (CMA) of Ontario. The award is presented annually and recognizes the creative vision and innovation of an Ontario CMA who fosters success.

At a time when other companies were running for cover, McClean and his team decided to buck the trend and mapped out an ambitious strategy for the firm to go on the offensive.

And it worked.

Running hard just to stay put

Canadian tax professionals need to react to so many new challenges that they can’t focus on strategic planning to the extent they or their employers would like, according to a study by the Canadian Financial Executives Research Foundation.

“The overwhelming theme that emerged throughout the study was that the complexity of tax issues forced most tax managers to focus on compliance and audit, as opposed to strategic tax planning,” noted the CFERF report.

The findings in Current Management Issues in Canadian Corporate Taxation were based on a survey of 162 senior finance executives from across Canada conducted in late 2009, as well as insights obtained through a forum in Toronto during the winter of 2010.

“FEI Canada’s research has shown that the tax system has become excessively complicated, and Canadian businesses are totally plugged down on compliance issues,” says Michael Conway, the Toronto-based national president of Financial Executives International Canada.

End zone dance for pharma execs?

A recent decision by the Canadian Federal Court of Appeal could have executives of multi-national companies doing an end zone dance in their offices.

The FCA determined in the last week of July that a Tax Court of Canada judge erred in his May 2008 interpretation of a subsection of the Canadian Income Tax Act on transfer pricing and has sent the matter back to the Tax Court for reconsideration.

The decision has been described as a “big win” for GlaxoSmithKline Inc. (GSK), the Canadian distributor of the patented anti-ulcer drug, Zantac, in its long-running dispute with the Canada Revenue Agency. The root of the spat was the transfer price paid for ranitidine, Zantac’s active ingredient, during the 1990 to 1993 taxation years.

Insurance leader worried about draft

Despite intense lobbying from Canada’s life insurance industry, the International Accounting Standards Board has released controversial proposals on accounting for insurance contracts that will significantly change insurance accounting and may, according to the industry, have a negative impact on the country’s capital markets.

Frank Swedlove, president of the Canadian Life and Health Insurance Association, says “the new rules will produce a lot of volatility in the quarterly results of Canadian insurers and may affect their ability to sell certain long-term investment products. That, in turn, could affect the capital markets and Canadians who use those products to save for their retirement.”
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