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New technology may help but only governments can fix the tax system by simplifying itLast updated 5 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.How can people and businesses overburdened by high accounting and compliance costs be helped? One promising possibility is the rise of artificial intelligence. Photo by mathisworks/Getty ImagesStatistics Canada’s “accounting services price index” (ASPI), newly updated with 2025 data, shows the price of accounting services rising less rapidly than the prices of most other things. Last year the ASPI rose 1.1 per cent, while the consumer price index (CPI) for all goods and services rose 2.1 per cent. Lower inflation for accounting services continued a longer-term trend: from 2010 to 2025, the ASPI rose 28.6 per cent, much lower than the 40.9 per cent increase in the total CPI.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorNot all consumers of accounting services benefited equally, however. Tax preparation for corporate clients was up only 20.8 per cent. The cost of audit, review and other assurance services rose 23.2 per cent. And bookkeeping, payroll, and general accounting services were up 34.7 per cent. But the price index for tax preparation services for individuals and unincorporated businesses rose 45.0 per cent — more than the overall CPI.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAlthough the ASPI has grown more slowly than the CPI since 2010, that’s a recent development. The earliest year for which ASPI data is available is 1999. From then until 2010 it grew much more quickly than the CPI. Since 1999 the ASPI is up 90.0 per cent versus the CPI’s 76.7 per cent increase. And price inflation specifically for tax preparation for individuals and unincorporated businesses is up a staggering 141.3 per cent since 1999.Many Canadians try to avoid rising prices for accounting services by not using professional services. According to a 2024 Fraser Institute study, approximately 63 per cent of Canadians prepared their 2022 income tax returns themselves or had a friend, family member or volunteer do it. Only 37 per cent paid for professional services. But of course people’s preparation of their own or friends’ and family members’ taxes still has costs, even if they are not reflected in GDP or ASPI numbers. Time is money, as even non-accountants say. The Fraser Institute study estimated that total compliance costs associated with filing income tax returns for the 2022 tax year were about $4.2 billion.How can people and businesses overburdened by high accounting and compliance costs be helped? One promising possibility is the rise of artificial intelligence (AI). In February, the Financial Times reported that KPMG International, which co-ordinates the work of KPMG’s locally-owned partnerships around the world, warned its own auditor, Grant Thornton UK, that it would be switching auditors if its fees weren’t significantly lowered. KPMG argued, quite reasonably, that AI should be reducing audit costs and Grant Thornton should pass cost savings on to the customer. The result? KPMG managed to negotiate a 14 per cent reduction in its annual audit fee.Of course, in a statement to the Financial Times, KPMG gave no indication it would be making a similar reduction in fees to its own clients. Its explanation? Although AI can create efficiencies, it’s costly; other factors also influence audit pricing; and “when it comes to audit, AI’s most likely and most powerful impact will be to improve audit quality.” In essence: AI savings for me, but not for thee.But consumers should not be discouraged: to the extent that the accounting and audit industry is competitive, consumers will ultimately benefit from time- and cost-saving innovations like AI.Government policy could also ease accounting costs. Less burdensome reporting requirements, for example. Unfortunately, Canada’s expanding regulatory regime continues pushing in the opposite direction, with new mandatory equity disclosures, diversity disclosures and climate and sustainability disclosures that keep raising reporting and audit costs.Another way for government to lower costs is to simplify and lower taxes. But there’s little hope here, either. Last year an Auditor General report found the Canada Revenue Agency’s call centre gave inaccurate information as often as 83 per cent of time — even when callers asked for general tax information, so complicated is Canada’s tax system.When first introduced in 1917, the Income Tax Act was six pages long; now it is nearly 3,800 pages. So taxes are clearly not becoming simpler. I wonder what the cumulative increase to the Accounting Services Price Index would be if the data went back as far as 1917. Whatever the number is, we’re going to need a lot of AI to get it back down to 1917 levels. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.