Accounting service costs rise unevenly
Statistics Canada’s accounting services price index (ASPI), updated with 2025 data, shows that the price of accounting services has risen less rapidly than most other goods. In 2025, the ASPI rose 1.1 percent, while the consumer price index (CPI) increased 2.1 percent. From 2010 to 2025, the ASPI climbed 28.6 percent, significantly lower than the 40.9 percent rise in the overall CPI.
However, not all consumers benefited equally. Tax preparation for corporate clients rose only 20.8 percent, while audit and assurance services increased 23.2 percent, and bookkeeping and payroll services went up 34.7 percent. But the price index for tax preparation for individuals and unincorporated businesses surged 45.0 percent, outpacing the overall CPI.
Long-term trends show steep increases
Although the ASPI has grown more slowly than the CPI since 2010, this is a recent shift. From 1999 to 2010, the ASPI rose much faster than the CPI. Since 1999, the ASPI has increased 90.0 percent, compared to the CPI’s 76.7 percent. Notably, tax preparation for individuals and unincorporated businesses has skyrocketed 141.3 percent since 1999.
Many Canadians avoid these rising costs by preparing their own taxes. According to a 2024 Fraser Institute study, approximately 63 percent of Canadians handled their 2022 income tax returns themselves or with help from friends or family, while only 37 percent paid for professional services. However, this self-preparation still incurs costs in time and effort. The Fraser Institute estimated total compliance costs for filing 2022 tax returns at about $4.2 billion.
AI offers potential savings
Artificial intelligence presents a promising solution to reduce accounting and compliance costs. In February, the Financial Times reported that KPMG International warned its auditor, Grant Thornton UK, that it would switch auditors unless fees were significantly lowered. KPMG argued that AI should reduce audit costs and that Grant Thornton should pass savings on to clients. Consequently, KPMG negotiated a 14 percent reduction in its annual audit fee.
However, KPMG gave no indication it would similarly reduce fees for its own clients. In a statement to the Financial Times, the firm explained that while AI creates efficiencies, it is costly, and other factors influence audit pricing. It added that “when it comes to audit, AI’s most likely and most powerful impact will be to improve audit quality.” In essence, AI savings may not trickle down to consumers.
Government simplification is essential
Ultimately, while AI can help, only governments can truly fix the tax system by simplifying it. The complexity of the tax code drives up compliance costs and makes professional assistance nearly mandatory for many. Without simplification, even advanced technology may only provide marginal relief.
