www.lexisnexis.ca Vol. 31, No. 2 February 2015
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Case for unity to be laid out Print This Article
By Jeff Buckstein

March 2012 issue

From left, Anthony Ariganello, CGA Canada, Kevin Dancey, CICA and Joy Thomas, CMA Canada.

Putting decades of rancorous opposition and sometimes bitter court battles behind them, the leaders of Canada’s three major accounting bodies concluded their latest round of unification talks ready to take a single message to their respective members: It’s time for an historic merger.

But the path to industry unity may prove rocky. Some of their members take a negative view, as internal polling, the blogosphere, and on-the-record criticism reveal a significant block of opposition to unification.

"We came to the table as aggressive competitors," acknowledges Joy Thomas, president and chief executive officer of the Certified Management Accountants of Canada (CMA Canada) in Mississauga. "Once we started, though, to find some common wins, such as a global designation we could all coalesce under, that was another challenge we were able to put aside. The tone of the meetings was very, very good.

"An objective is to make sure that we have engaged and informed our membership. In addition, [we want to] make sure we get to more members directly because, until we get them face-to-face, we’re finding they’re not reading enough information, and that’s where some inaccuracies are coming out."

For example, some CMA members don’t understand they won’t lose their existing designation while gaining a new Chartered Professional Accountant (CPA) one. Others question whether a unified profession provides any benefit to them personally, Thomas says.

A joint report issued by the Canadian Institute of Chartered Accountants (CICA) and CMA Canada points out that some members have expressed a desire to see alternatives to unification explored, and that some believe the potential risks of a union haven’t been fully examined or presented to them.

Last September, the CICA and CMA conducted joint internal polling to determine members’ potential support for unification. Most CMAs supported unification at that time, Thomas says.

The majority of CAs, on the other hand, would have rejected unification then, says Kevin Dancey, the CICA’s Toronto-based president and chief executive officer.

However, "the polling also revealed that probably about half of the members were not aware of the kind of concept of unification we were pursuing [and] that many members wouldn’t really get engaged until they knew it was a kind of a final proposal," he adds.

Furthermore, Dancey says, the survey was conducted in the context of a two way CA-CMA merger discussion before the Certified General Accountants Association of Canada (CGA-Canada) came back to the negotiating table. "Members at that time were saying: ‘Unification only makes sense it if involves all three bodies,’" he says.

But not all members are on board. On a publicly-listed petition against the merger, for instance, Toronto-based CA Gerard Sheehan posted the following remark to the CA leadership in registering his opposition to the talks: "You fought so hard for CGAs to not have a public accounting licence in Ontario. Now you want to have them join us? REALLY!!!!!"

Sheehan did not wish to be interviewed by The Bottom Line.

The CICA, CGA-Canada, and CMA Canada are about to embark on "an extensive consultation period involving members, students, governments, regulators, employers, and the business and academic communities," the national leaders said in a joint communiqué.

"The next step for all provinces is to get member feedback from various town hall meetings over the next two to three months," explains Anthony Ariganello, the Vancouver-based chief executive officer of CGA-Canada.

The accounting bodies published a unification framework based on four fundamental objectives:

• A common certification program, and single set of ethical and practice standards;

• Enhancing and protecting the value of a common designation amid global competition;

• Providing the Canadian accounting profession the best opportunity to be sustainable and prosperous;

• The ability to govern the profession in a more effective and efficient manner.

Some members take issue with those tenets. Each group is well run, attracts different kinds of applicants, offers varying training process, and provides a distinct service or product, says Karim Jamal, a CA and chair of the accounting department at the University of Alberta in Edmonton. "All of them have a place in the economy, so there’s no reason why there should only be one product."

Jamal questions the leaders’ assertions that the public interest is being protected by unification. "They’re going to create a monopoly that’s against the public interest."

But Dancey counters that lawyers, doctors and engineers — as well as the public — are well-served by those professions each being represented by one body. "I don’t think this kind of monopolistic argument holds up when you’re looking at a professional body that’s trying to make sure there’s a common certification program that works in an efficient and effective manner, not only for its members but for the public interest.

"There will be lots of competition out there in the marketplace in terms of firms competing against one another."

Kin Lo, a CA and professor of accounting at the Sauder School of Business at the University of British Columbia in Vancouver, agrees. "Unification of the accounting bodies doesn’t affect competition for businesses, for clients. National or smaller firms will still compete, regardless of who the majority of their staff represent."

Al Rosen, founder of Rosen & Associates Ltd., investigative accountants in Toronto, and a member of all three accounting bodies, blasts as artificial rhetoric the leaders’ stated objective that unification of the profession in Canada will "enhance and protect the value of the designation in an increasingly competitive and global environment."

"Show me any evidence whatsoever that Canada, [with] three per cent to five per cent of GDP or market cap on securities, is large enough to be of consequence to the rest of the world. There’s nothing of a serious nature to protect as a country."

Dancey calls that view "a very defeatist attitude that says Canada is irrelevant. My experience, both in my role on the global leadership team at PwC [before joining the CICA], and my role over the last six years being on the IFAC board, which is responsible for setting international ethics, audit and assurance standards, is that Canada has punched above its weight. But to continue to do so, and be effective, we need to make sure we are unified and have one voice within Canada."

Ariganello emphasizes that the merged entity would be a very large body, with about 170,000 members and 100,000 students that would have tremendous clout, both domestically and internationally. "Part of the issue right now is sometimes we’re redundant. For example, the CICA and CGA-Canada both comment on exposure drafts and standards at the international level. If we combine those efforts, we’ll eliminate this redundancy, and added resources taken to do the same job. I think it benefits the whole profession."

Jamal, at the University of Alberta, criticizes the leadership’s objective that the accounting profession will better protect the public through a single set of high ethical and practice standards. "What are the new ethical standards they’re going to create that they don’t currently have that are going to protect people? There’s no substance to it; it’s just a marketing slogan."

All three bodies currently have high ethical and practice standards in place; plus robust protections for the public, Thomas says. However, there are differences among the three in how complaints are processed.

"Having one disciplinary regime or one licensing regime makes the process clearer for the public. It’s not that one is better than the other; it’s just a matter of streamlining that," she says.

The timetable now involves the provinces and territories taking centre stage.

"This is a national framework that all jurisdictions are operating under, and there’s only so much detail that can get done at this point," Thomas explains. "It now goes down to the provinces. Each jurisdiction is regulated, so at the end of the day they have to develop their own merger proposals."

The provincial and territorial bodies across Canada vary in their requirements for potential ratification. For instance, some have bylaws that require a member vote, while others are silent on that issue.

It is unclear what might happen if some provinces — especially those with the largest memberships — agree to unify, and others don’t.

"It’s a dilemma; I think everyone’s cautious about it," Ariganello says.

Adds Dancey: "In a sense, we are already in that position because Quebec’s basically made the decision to move forward. This is not like prior merger discussions, where whether you agree or disagree, you can all just go back to your respective corners. The landscape has changed, because I think we’re reasonably confident there will be a merged body in the province of Quebec that will represent 20 per cent of all accountants within Canada."

"Quebec will be CPA, so right out of the gate we’ve got four designations," Thomas says. "Right now, we’re trying to focus on making sure we get everyone to a very robust consultation phase. We all said it would be messy in the short term. A lot of variables will play out. There’s no textbook to guide us through this."

Should various jurisdictions decide to merge, the process they need to go through may take a long time. "This type of change will involve legislative change in the provinces, and the legislative timetable in [each] will vary," Dancey says. "In Quebec, they’re expecting that will be done this year. In other provinces, I would expect the earliest it would be is 2013, maybe 2014 before legislation is introduced, passed, and brought into force."

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