In the Spring 2018 issue of Dividends, CPA Alberta asked five CPAs to respond to the thought-provoking question: What changes do you foresee for the profession in the future, and what should CPAs do now to be able to successfully navigate those changes? In this post, Natalie Pon CPA provides her thoughts on the question.
As CPAs, we should be aware of how the policy decisions arising from changing political climates at home and around the world impact our ability to do business. In the past two years we have seen voters around the world make unpredictable election decisions that we may not have considered possible— between the “Leave” victory in the United Kingdom European Union membership referendum (or “Brexit”) and the election of President Donald Trump in 2016, we are now truly beginning to see the effect this will have on Canadian businesses.
Both of these events have a common theme that impact Canada and Canadian businesses: free trade. Specifically, the UK will need to negotiate new free trade deals in order to have free trade with EU members—something not required when the UK was a member of the EU; and if Canada wants to continue to have free trade with the UK, a new agreement will need to be negotiated and struck.
Closer to home, we may see similar events occur with the renegotiation of NAFTA. President Trump has been quoted saying he may terminate NAFTA, which would create both logistical and financial impacts on Canadian businesses. The American position on trade has been largely inconsistent: similar to the Trans-Pacific Partnership negotiations, supply management has been one identified irritant in the negotiation process. President Trump would like to open up the dairy industry in Canada, while simultaneously enacting tariffs on imported steel and aluminum.
The events of the last two years may be the first of many to come, as voters shun the globalization and free trade we have come to know over the past two decades and support a populist movement that is unpredictable compared to policies arising from establishment politics we have become accustomed to.
Government policy has always impacted the way we can do business, and the unpredictability of recent political events will certainly require businesses to analyze their current operations and the impact these policy decisions will have. Uncertainty is not friendly for business. With this evolving political landscape, CPAs need to be aware of current events at home and around the world in order to plan for various outcomes and mitigate risks that may arise in their businesses or for their clients.