Finance, Tax, Accounting, Internal Audit & Risk Management Committees
CEA members of the Income and Commodity tax committees identify issues of high importance to their companies. These issues are then assessed and reviewed for possible advocacy. CEA annually puts forward an industry consensus document called a Pre-Budget Brief to the Minister of Finance and seeks a representation to the Standing Committee on Finance. CEA’s Accounting Committee has been focused on the move to International Financial Reporting Standards (IFRS) and has been active in seeking support from provincial regulators and national (CICA) and international standard setters (IASB), and other rate regulated industries to advance the case for including a rate regulated standard in the new IFRS guidelines. These committees and their working groups report regularly to the CEA Board as these are “cross cutting” issues.
Income and Commodity Tax Issues for the Electricity Industry
CEA members approximating about 15 for each Income and Commodity Tax issues, hold an annual meeting supplemented by calls and task group work. Expert speakers are invited to contribute to industry issues at these meetings. Recent issues over the past year of key concern for CEA members of the Income Tax Committee (ITC) and the Commodity Tax Committee (CTC) include:
- Obtaining a CRA ruling in 2011 on the HST Place of Supply Rules in Ontario and BC through direct discussions with the government;
- Seeking administrative streamlining, transparency and certainty with regard to the Scientific Research & Experimental Design (SR&ED) tax credits program;
- Recommended higher CCA rates for Carbon Capture & Storage projects, and for new/refurbished transmission for renewable energy projects;
- Provided input to the proposed HST Harmonization program and expressed concern to the Minister of Finance on timeliness, restricted input tax credits and billing; Assess the impacts of the move to IFRS and taxation;
- Understanding NEXUS issues as they relate to income (and commodity tax) for companies operating in the U.S.;
- Cross border documentation issues;
- Net metering, carbon offsets and billing issues.
Finance & Accounting Committee--the move to IFRS
The CEA Finance & Accounting Committee has about 40 active utility members attending meetings, supplemented by daily email activity and frequent calls on key issues. Expert auditors and standard setters are invited to participate in these semi-annual meetings. Recently, the proposed 2011 move to IFRS has been the sole topic of concern, with surveys on issues like hedge accounting, group assets, net salvage value, etc. are reviewed with member input. The key stumbling block for industry acceptance of IFRS, has been the lack of co-operation from the IASB on completing the required Rate Regulated Accounting standard project.
Internal Audit & Risk Management Working Group
This working group has approximately 20 active members and has historically focused on “best case” practices. Recent issues include assessing impacts on internal audit with respect to IFRS implementation, how Boards assess risks to their companies, compliance management tools, safety and environmental issues, IT and operational issues, continuous control monitoring and technology to assist auditors.