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As CPA Canada’s Collaboration Accord Fails to Collaborate, Who Gets the Profession’s Credibility in the Divorce?

a cliche moose to represent Canada

We should have written about this months ago but didn’t get around to it, there’s some new news so let’s get to the backstory and what’s happening next with the various CPA bodies of Canada. TL;DR: CPA Ontario and CPA Quebec want to break up with CPA Canada. It’s relevant to us as down here as we have states currently in the act of upsetting the AICPA’s apple cart on the 150 hour rule so we can relate to and delight in national vs. state CPA drama.

On June 20 of this year, CPA Ontario, the regulatory body responsible for overseeing Chartered Professional Accountants and accounting firms in Ontario, provided notice of intent to conclude its current arrangement with the national CPA Canada body. In other words, Ontario wanted to bust out from under the national body and do its own thing. Oh and Ontario’s neighbors in Quebec planned to join them in seceding from CPA Canada. The short version:

Artist rendition of CPA Ontario breaking off from the national CPA body

CPA Ontario is a regulatory body that oversees Chartered Professional Accountants and accounting firms in the province of Ontario, protecting the public is among its many responsibilities. CPA Canada is not a regulatory body, it is a federally incorporated not-for-profit. Y’all are familiar with those.

From CPA Ontario’s news release on the planned breakup:

The size and complexity of Ontario’s economy is unique in Canada. The critical role CPAs play in safeguarding it demands responsive, streamlined and efficient management of their professional body. This decision will enable CPA Ontario to better protect the public, serve members and students, and advance the profession by being more nimble and innovative.

“As well as being home to Canada’s largest capital markets, financial institutions and pension funds, Ontario has one of the largest information technology and innovation clusters in North America, as well as robust manufacturing, energy, mining and agriculture,” said Jean Desgagné, CPA, CA, chair, CPA Ontario Council. “With new challenges facing Ontario businesses every day, it is our duty to ensure CPAs protect the public by meeting the highest standards of integrity and expertise, while advancing the profession by staying ahead of global economic and technological trends.”

CPA Canada said they were “disappointed and surprised that CPA Ontario and CPA Quebec decided to sever ties with the national organization,” to which the aptly named CPA Ontario president and CEO Carol Wilding told Toronto Star CPA Ontario’s breaking off “should not be a surprise to (CPA) Canada” and “we’re as disappointed as anybody else.”

So why did Ontario and Quebec want to break up with CPA Canada in the first place? Because they’ve been going back and forth on the Collaboration Accord — which outlines the roles, standards and cost-sharing structures of CPA Canada provincial bodies — for so long that Ontario and Quebec eventually said in unison “you know what, vas te faire foutre” (Quebecians, don’t come for us in the comments, no hablamos francés). The Collaboration Accord came about in 2013 and is, as the name describes, how the various provincial bodies work together under the Chartered Professional Accountants of Canada (CPA Canada) umbrella. The terms of the accord are up for discussion every five years.

Canadian Accountant explains it better than anyone here could:

The move comes exactly 10 years after the former Institute of Chartered Accountants of Ontario announced the creation of Chartered Professional Accountants of Ontario. Not only is CPA Ontario the largest provincial accounting body, its membership comprises the powerful partners of the Big Four accounting firms and the business interests of Bay Street.

Similarly, as the francophone voice of Canadian accounting, CPA Quebec Ordre des CPA du Québec) has political clout, as seen recently in its opposition to the transparency reforms of the Canadian Public Accountability Board [Ed. note: that’s their PCAOB]. The two organizations together represent significant opposition to CPA Canada.

The profession has also undergone significant challenges in recent years. Members complain that their annual fees to provincial and federal bodies are too high. (CPA Ontario members pay about $1,200 per year, which is less than doctors, lawyers and dentists in the province.) CPA Ontario addressed this issue in an email to members, stating: “When the transition is complete, you will notice a significant cost reduction reflected in your annual membership dues, which currently includes both CPA Ontario and CPA Canada’s fees.”

The high-profile breakdown of the national online accounting exam in 2019 embarrassed the profession and symbolized a technology deficit in delivery and training. And the brief tenure of former CPA Canada head Charles-Antoine St-Jean surprised the profession.

As reported by Canadian Accountant, the new Canadian Sustainability Standards Board is expected to cost about $10 million, in addition to the costs of the legacy standard-setting bodies, which in the past was paid for through membership fees. Sustainability standards have been largely driven by CPA Canada, whose national initiatives have overshadowed the provincial bodies, including CPA Ontario, which had a legacy history of substantial influence.

So bitchy infighting and money. AND:

Similarly, anticipated changes to the CPA program — the education program for future accountants — has concerned members. According to CPA program coach Gevorg Grigoryan, the new Competency Map 2.0 may “gut” the program of electives and the national accounting exam. Legacy chartered accountants still resentful of unification see the future direction of the program as a further watering down of standards and their reputations.

So bitchy infighting, money, the discomfort of a historically reactive profession being forced into change, and a touch of the national organization wagging its dick around because it can. Gee that sounds ominously familiar…

Alright so we’re caught up to present day. This week, The Globe and Mail published a piece full of people complaining about how this has been handled and throwing jabs at CPA Ontario:

A plan by the governing accounting bodies in Ontario and Quebec to break away from the Chartered Professional Accountants of Canada is facing growing opposition from those who want the profession to remain unified across the country.

A group of past chairs of CPA Canada, the national industry organization, are calling on CPA Ontario and Quebec CPA Order to reconsider their decision to withdraw from the group. And as the two provincial groups are explaining themselves to their members, they’ve also faced sharp questions about why the decision was made and why it was not put to a vote. [Ed. note: The CPA Ontario Council, which is comprised of member-elected directors and public representatives, made the decision]

Six past CPA Canada chairs, led by Amanda Whitewood, who headed the board from 2019 to 2021, recently published a joint letter arguing that the departure of the two provinces could be the “undoing of unification of the profession” under the CPA designation.

“We believe this announcement, the way it was issued, and the process that we understand will be followed is unacceptable and has embarrassed the Canadian accountancy profession domestically and internationally,” the group wrote in a letter sent to all provincial and territorial chairs and chief executive officers and obtained by The Globe and Mail.

“No details have emerged to clarify why this course of action was necessitated, nor why any alternative approaches will be better,” they wrote in the letter, dated July 17.

CPA Ontario’s decision to split off was explained in an FAQ on their website.

Meanwhile, Canadian accounting firms aren’t eager to jump into the fray:

While individual accountants are speaking up, other accounting organizations are laying low. Canada’s big four accounting firms – which employ thousands of accountants across the country – are largely staying silent on the abrupt departure of Ontario and Quebec.

A spokesperson for Deloitte Canada said in an e-mail to The Globe that the company “supports a strong and growing chartered professional accounting profession in a cohesive regulatory environment, which is critical to protecting the public interest and trust in our capital markets.”

Ernst & Young and KPMG declined to comment, while PricewaterhouseCoopers did not respond to The Globe’s request for comment.

Has this embarrassed the Canadian accountancy profession domestically and internationally? IDK, we’re pretty entertained down here. Keep you posted if anything exciting happens.

One thought on “As CPA Canada’s Collaboration Accord Fails to Collaborate, Who Gets the Profession’s Credibility in the Divorce?

  1. From attending the member engagement sessions, this feels like a.power play by CPA Ontario and the CPA Quebec.

    They weren’t getting exactly what they want and have decided that they are going to take their ball and go play in their own sandbox.

    It’s frustrating and disappointing.

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