The budget proposes $120 billion of investment in infrastructure and job creation over the next ten years, including significant investments in public transit, clean technology, and First Nations, Inuit Peoples and the Metis Nation.

Some of the key features of the budget plan were:

• Mr. Morneau indicated that the deficit for 2015-2016 will be $5.4 billion while a deficit of $29.4 billion is predicted for 2016-2017. The deficit is projected to decline gradually reaching $14.3 billion by 2020-2021.
• This budget proposes to keep the small business tax rate at 10.5 percent after 2016 rather than reducing this rate to 9% by 2019 as announced in the previous budget.
• Where the exception to the deemed association corporation rules applies (i.e., an election not to be associated is made or the third corporation is not a CCPC), the budget proposes to make investment income derived from an associated corporation’s active business ineligible for the small business deduction and taxable at the general corporate tax rate.
• This budget contains proposals regarding certain recommendations of the Organisation for Economic Co-operation and Development (OECD) as set out in its final reports on its base erosion and profit shifting (BEPS) initiative, released in October 2015. 

A summary of the economic and tax highlights contained in the budget is outlined in our Canadian tax alert. 

For further details, we refer you to the Ministry of Finance website.

This issue fea­tures:

• An interview with the President of the Asian Infrastructure Investment Bank, Mr Jin Liqun.
• An overview of key features in the new leases standard, IFRS 16.
• Current pro­jects that need input from the in­vest­ment com­mu­nity.
• A cal­en­dar of current events.

The In­vestor Update newslet­ter is avail­able on the IASB’s website.

According to GRI, the future will involve new formats with organizations moving from annual reports to sustainability data exchange, while focusing on major challenges such as climate change and human rights. The publication is the culmination of the first year of GRI’s "Sustainability and Reporting 2025" project and provides insights from these discussions.

Review the report on the GRI's website.

Updates regarding the im­ple­men­ta­tion projects are:

• Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts: Now indicates that a new Standard is expected within 6 months.

• Clarifications to IFRS 8 arising from the Post-implementation Review: The exposure draft is now expected within 6 months, previously it was within 3 months.

• Clarification of Classification and Measurement of Share-based Payment Transactions: The new Standard is now expected within 6 months, previously it was within 3 months.

• Clarifications to IFRS 15 Revenue from Contracts with Customers: Issues Emerging from TRG Discussions: Previously indicated that a new Standard was expected in the March/April 2016 timeframe; now it indicates that it is expected in April 2016.

• Classification of Liabilities: The new Standard is now in more than 6 months; previously it was expected within 6 months.

The revised IASB work plan is available on the IASB's website.

This webcast discusses the transition steps that a lessee is required to perform and includes highlights of available transition relief and the decisions that need to be made at each stage.

The webcast is available on the IFRS 16 implementation page on the IASB’s website.

The article features:

• Examples of how the amendments to IAS 1 in December 2014 helped preparers improve their financial reporting.
• The importance of identifying the primary users.
• An assessment of disclosure materiality.
• Discussion on material and immaterial errors.

The full article is available on the IASB’s website.

The report, prepared by Chair of the IFRS Advisory Council Joanna Perry, notes the following dis­cus­sions:

• IASB ac­tiv­i­ties — Members received a report of recent ac­tiv­i­ties and were congratulatory of the IASB bringing together implementation and education into one unit.
• Trustee ac­tiv­i­ties — Members received an updated on the January Trustees meeting and were presented with the IFRS Foundation Strategy approved by the Trustees.
• Post-implementation reviews strategy — Members discussed the primary objective of PIR and when a PIR would be necessary.
• Review of the structure and ef­fec­tive­ness of the IFRS Foun­da­tion — Members discussed governance aspects of the review.
• IFRS Foundation funding — The Council believed it is useful for members to have access to an Aide-Memoire and that there may be opportunities for additional funding from the public.
• Corporate reporting — Members discussed consultation documents from the Federation of European Accountants and the Financial Stability Board and the Carbon Tracker Initiative on the implications of climate change in financial and corporate reporting.
• Conceptual framework — Members provided advice related to the conceptual framework exposure draft.

The full report on the council’s February meeting is available on the IASB's Web site.

The research report discovered that:

• “The objective of investors (valuation or stewardship) does matter.
• Investors are strongly anchored on the income statement.
• Investors have strong reservations about the representational faithfulness of bottom line figures.
• Regardless of its shortcomings, financial accounting information is a key input factor for investors' decision making.
• The quality of corporate governance, including audit, influences investors' assessment of the representational faithfulness.”

In addition, the research report noted that (1) different objectives for financial reporting need to be prioritised by standard setters; (2) income statements were considered more useful than the balance sheet; (3) standardised performance measures for the income statement need to be enhanced; and (4) "investors' perceptions of corporate governance significantly affect their views of representational faithfulness."

For more information, see the press release and report on the EFRAG’s website.

The CMA is intended to replace existing provincial and territorial securities legislation in Ontario, British Columbia, New Brunswick, Saskatchewan, Prince Edward Island and Yukon (Participating Jurisdictions). While the 50 comment letters on the Consultation Drafts in large part expressed support for the goal of harmonizing securities regulation in Canada and moving toward a single national regulator, many commenters expressed concern about the inadequacy of the consultation process given the proposed substantive changes to securities law in certain Participating Jurisdictions, notably Ontario.

Review the bulletin on Blakes' Website.

The ASU introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard, ASC 606, Revenue From Contracts With Customers. The new leases standard represents a wholesale change to lease accounting and will most likely result in significant implementation challenges during the transition period and beyond.

The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (i.e., calendar periods beginning on January 1, 2019), and interim periods therein. For all other entities, the ASU will be effective for annual periods beginning after December 15, 2019 (i.e., calendar periods beginning on January 1, 2020), and interim periods thereafter. Early adoption will be permitted for all entities.

The leases project was part of a convergence effort between the IASB and FASB; however, the IASB’s counterpart standard, IFRS 16, contains notable differences from ASU 2016-02. For instance, the IASB’s standard has a single lessee accounting model while the FASB’s has a dual lessee accounting model. However, both standards require that assets and liabilities be recognized (with limited exceptions).

For more information, see the press release, FASB in Focus newsletter, ASU, cost-benefit analysis, and video discussion by FASB Vice-Chairman Jim Kroeker and Board members Tom Linsmeier and Hal Schroeder on the FASB’s Web site. In addition, don’t miss Deloitte US's Heads Up on the new standard, which will be available shortly.