Letter from... Canada

A recent report by Canada's Competition Bureau criticised Canada's accounting profession for being over-regulated, particularly in the limits it places on who can offer certain professional services. This was a timely observation since, within days, one of these barriers - one province's legislation preventing some accountants from providing full public accounting services - was removed.

The Competition Bureau, an independent agency whose goal is to protect and promote competitive markets, released its report in December 2007, calling on Canada's self-regulated professions such as lawyers, optometrists, pharmacists, real-estate agents and accountants, to re-examine their rules to ensure they serve the public good and not restrict competition.

Three accounting designations are recognised by provincial or territorial statute in Canada: chartered accountant (CA), certified general accountant (CGA) and certified management accountant (CMA). Although more than 3,500 CGAs and 1,000 CMAs practise public accounting, they have not been allowed to offer full public accounting services in every province. ACCA membership in Canada totals 1,800 members and students; however, ACCA is not currently recognised by provincial and territorial statute. ACCA Canada members who practise public accounting tend to hold another designation as well.

Each of Canada's three main accounting designations have mutual recognition agreements, which allow members to move between provinces and territories. However, these public practice restrictions can impair movement, the Competition Bureau report stated.

This was the case in the Province of Quebec, where provincial legislation allowed CGAs and CMAs to practise public accounting only in limited circumstances. However, in December 2007, the Quebec National Assembly adopted new legislation, allowing professional accountants who qualify for a public accountancy licence to practise the full scope of public accounting.

This legislative change followed extensive lobbying by CGA-Canada, which challenged legislation in Quebec and the Province of Ontario under the federal Agreement on Internal Trade (AIT). In 2005, an AIT panel ruled that restrictions on the provision of public accountancy in Quebec had caused injury and impaired trade, recommending the legislative reform that took place last December. A similar legislative change took place in Ontario with the passage of the new Public Accountancy Act in 2004.

'CGA-Canada has long advocated for full public accounting rights for CGAs, and we are gratified that legislative barriers have been removed,' said CGA-Canada's President and chief executive officer, Anthony Ariganello. 'We are encouraged that the recent federal Competition Bureau report concluded that these barriers to practising public accountancy in Canada have not been necessary to protect the public, as this is the position we have defended for so many years.'

Quebec CMAs are also pleased that legislative change has taken place; however they are opposed to the approach taken. 'The CMA Order continues to disagree with the Government's choice of amending the Chartered Accountants Act, rather than using a neutral legislative platform like the Professional Code for expanding access to public accounting,' said Richard Désy, President of the Bureau of the Ordre des Comptables en Management Accrédités du Québec (CMA Order). 'This approach suggests that one professional order can be subordinated to another and thereby undermines the foundations of the Quebec professional system, which is based on the principles of autonomy, self-regulation and self-management for each profession.'

While the Quebec ruling eliminates the final legislative barrier in Canada for accountants to provide full public accounting services, there is still work to be done in both Ontario and Quebec to implement the standards and procedures to issue public accounting licences. In Quebec, both the Ordre des CGA du Québec and the CMA Order are preparing their regulations, which, once approved by the Office des Professions du Québec, will be ratified by the Government. Members will then be able to take the necessary steps to obtain their public accounting licence.

In Ontario, the CA, CGA and CMA organisations must meet the standards set by the Public Accountants Council (PAC), which will then authorise them to license and govern their members as public accountants.

For its part, the Canadian Institute of Chartered Accountants, whose members have enjoyed full public practice rights across the country, agreed with the Competition Bureau's recommendations for consistent regulation to foster mobility. However, it stressed that 'care must be taken to ensure the quality of auditing services in Canada is not weakened'.

The Conference Board report commented that it remains to be seen whether adopting new standards will abolish unnecessary practice barriers for competing accounting designations. It stressed that application of new standards should be flexible in order to give members of all designations with equivalent training and education the right to practise public accounting.

Alison Arnot is a freelance writer and editor, based in Ottawa.