Al Rosen, principal of Rosen & Associates, an investigative accounting firm in Toronto, believes the CGA/CMA Ontario announcement to postpone June membership votes on merging, with the Institute of Chartered Accountants of Ontario following suit, reflects a realization that the three bodies have vast differences that will be difficult, if not impossible to bridge.
"I think there are some fundamental reasons why they should not be brought together," said Rosen, who is a member of all three major accounting bodies in Ontario. "Canada has a different setup with respect to accounting organizations [including] the content of the courses and types of jobs people have.
"There isn’t the compatibility there," he said, citing public practice and management accounting as examples.
CGA Ontario and CMA Ontario have identified a wide-ranging list of unification-related issues for which they say unsatisfactory progress has been made among the three bodies. That list — provided in nearly identical press releases — includes items that are clearly pivotal to the success for any unification agreement, including:
• Development of a legal structure and member ratification process that would be acceptable to the boards of all three organizations;
• Enforceable commitments regarding member protection and minority rights;
• Agreement on the information and documentation the three organizations’ members would be given upon which to base their vote;
• Establishment of a transitional governance structure;
• Establishment of a national governance model for a unified profession, including clearly defined roles and responsibilities; and
• Inconsistencies across Canada with respect to use of the new Chartered Professional Accountant (CPA) designation.
None of the bodies will discuss details of confidential talks, but remain hopeful this will prove to be nothing more than a pause.
"We hope this is just a bump in the road and they’ll be able to clear up the concerns or issues they have," said Anthony Ariganello, the Vancouver-based president and chief executive officer of the Certified General Accountants of Canada. "We believe things are capable of being resolved, and look forward to seeing that happen."
Doug Brooks, chief executive officer of CGA Ontario, dismissed Rosen’s concerns. "Members who share an accounting designation often have vastly different professional responsibilities," he said.
"Unification makes sense under the right terms and conditions," Merv Hillier, the Toronto-based president and chief executive officer of CMA Ontario said. But, "while we are interested in continuing to pursue unification, CMA Ontario will not compromise our members’ rights to achieve unification. We are committed to presenting a proposal to our members that protects their future professional interests, acknowledges their history, and respects their professional status."
Brooks confirmed that talks are continuing and that like their CMA counterparts, "we believe in the opportunities and benefits of unifying the profession and would proceed under the right circumstances."
"While we are disappointed in the delay, we are nonetheless encouraged that all parties continue to support unification," said Rod Barr, the ICAO’s Toronto-based president and chief executive officer. "We owe it to our members to get the proposal right; if that means delaying its release, that’s something we accept."
The ICAO stressed in a press release that it "remains committed to the eight guiding principles agreed upon at the beginning of this process."
Umashanker Trivedi, an associate accounting professor at York University’s Schulich School of Business in Toronto, interpreted a striking contrast between the tone of the ICAO and CGA Ontario/CMA Ontario announcements.
"It’s interesting that the ICAO is looking at it from a principles base, whereas the other two bodies are now focusing much more on the exact dynamics and mechanics of going ahead with the merger," said Trivedi, who is not a member of any of the three major accounting bodies.
Trivedi noted that CGA Ontario and CMA Ontario appear to be trying to protect their interests as minority parties in a merged CPA body where those with a legacy CA will constitute about half of all members. "I think it has to do with being more comfortable that their voices will be heard at the table," he said.
Trivedi contended that while the ICAO management has expressed keen support for the merger, they are getting pushback from some of their rank-and-file membership, and he believes this is pulling them in different directions.
"I’ve been monitoring the discussion groups (online) to get a feel of what the rank-and-file is saying and you can see there’s a lot of discomfort in the membership. Many of them are basically saying ‘we are giving away our hard-earned certification and shouldn’t be.’
"And so I think the Ontario institute will have a very difficult job of trying to placate its members."
Trivedi further speculated that discomfort might be partially responsible for fuelling some of the CGA Ontario and CMA Ontario concerns about minority rights. He thinks they might fear the ICAO will eventually take steps to dominate the merger in an effort to illustrate to its own membership that it won’t water down its reputation or strength.
Neither the ICAO nor CGA Ontario wished to comment on such speculation when asked by The Bottom Line. CMA Ontario’s Hillier simply reaffirmed his organization was committed to unification under the right circumstances.
Jim Stevens, a chartered accountant, and director of the professional accounting programs at the University of Windsor’s Odette School of Business in Windsor, Ont., preached caution before jumping to any conclusions about what the CGA Ontario and CMA Ontario decision to delay a vote until substantive issues can be resolved might mean over the long term.
"The decision to merge or not is obviously a very critical decision for all involved, and as much as some may be discouraged by the delay, I think that few would debate the importance of getting this right. If that takes a little more time, so be it," he said.
Kevin Dancey, chief executive officer of the Canadian Institute of Chartered Accountants in Toronto, had a similar message. "This is a complex and difficult exercise, with 40 different bodies involved. It will take different time frames in different provinces, and it looks like it’s going to take longer in Ontario than in some of the other provinces," he said.
Dancey pointed to the results of successful negotiations in other provinces to illustrate progress.
"In Quebec, legislation is tabled. We’ve got the two-way proposal in Manitoba [involving the CAs and CMAs; CGA Manitoba never joined in the discussions]. They’ve already had their vote on it; the CAs have voted in favour. I know bodies in British Columbia, Saskatchewan and Newfoundland are looking to perhaps hold their votes sometime in May," he said.
The Institute of Chartered Accountants of Manitoba (ICAM) held an advisory vote on unification between the ICAM and Certified Management Accountants of Manitoba in early March. Nearly half of their membership (48.7 per cent) endorsed a provincial unification proposal by a margin of 59.5 per cent to 40.5 per cent.
CMA Manitoba held its advisory vote at the same time, with 49.2 per cent of its membership taking part. The level of support in favour of a merged profession with the CAs amounted to "a very significant majority," said Ron Stoesz, the association’s Winnipeg-based chief executive officer.
However, Stoesz did not wish to quantify the actual level of support.
The ICAM and CMA Manitoba are currently preparing information that will be presented to the provincial government as either a joint report, or separate reports submitted simultaneously.
"We’re going to do that sometime before June. [It will] summarize all the consultations we’ve done, including the result of the advisory vote," said Gary Hannaford, ICAM’s chief executive officer in Winnipeg.
In British Columbia, the Institute of Chartered Accountants of British Columbia (ICABC) has called a membership vote that will take place between May 1 and May 18 to determine the level of support for a merger with the Certified General Accountants Association of British Columbia and Certified Management Accountants of British Columbia.
But the Institute also has an eye to what’s going on in Ontario, noted Richard Rees, the ICABC’s Vancouver based chief executive officer.
"Firstly, we’ll have to see what our vote is," said Rees.
"But the one thing we heard through all of our surveys is that our members see us as being part of a national profession. In that regard, the recommendation to government is to combine the three accounting acts, but only to do so if CPA becomes the predominant designation in Canada.
"We’re being very careful not to try and define what that means; there are all sorts of machinations going on across the country. But I would have to say it’s hard to conceive that it would not include participation in Ontario. It’s not going to affect the timing of our vote, but we’re very hopeful things will come together in Ontario."