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I am writing today to bring you up to date on some recent developments in Alberta and elsewhere in Canada related to the merger (or unification) concept.
On May 17, 2012, CMA Alberta and CGA Alberta released a proposal for a merger of the CMA and CGA designations in Alberta into a single CPA (Chartered Professional Accountant) designation.
It is important to note that any such merger would require the approval of the Government of Alberta, as all three accounting organizations (CA, CMA and CGA) operate under the same legislation, the Regulated Accounting Profession Act (RAPA). The ICAA anticipates that it would take some time for the statute and other governing documents to be revised in a way that could accommodate any merger within Alberta’s accounting profession. Specifically, the use of the phrase “chartered accountant” is limited to members of the ICAA and, under s. 7(4) of the RAPA, the use of the acronym CPA must meet the requirements set out in the Chartered Accountants Regulation. The ICAA intends to continue to protect those rights under the RAPA.
At the national level, the ICAA remains concerned about still-unresolved national issues, such as governance and minority rights protections. The ICAA has been actively seeking ways to address these issues since it withdrew from merger negotiations on February 9, 2012.
The unification discussion is evolving quickly across Canada, and the ICAA is staying actively involved in the debate around the future of the profession to ensure the public is protected and its members are served. In this regard, it is important to consider the announcement from CMA Alberta and CGA Alberta in the context of other recent developments related to the merger. Such developments include: the May 15, 2012 termination of merger discussions by CGA Ontario and CMA Ontario, and the subsequent announcement by CGA British Columbia that it “cannot support moving forward with unification without a similar merger in Ontario.” On May 15, the Institute of Chartered Accountants of Saskatchewan advised its members that it has deferred a planned member vote on unification until a later date, given developments in other provinces. In Quebec, the provincial government passed merger legislation on May 17, 2012, which creates CPA Quebec.
As has been previously stated, if it appears that unification will proceed in the majority of the country, Alberta CAs will be consulted to discuss and determine the appropriate response for the ICAA. In the meantime, the ICAA will continue to effectively work on the priorities that CAs have identified, such as enhancing the value of the CA brand, growing the profession, and protecting the public.
As always, the ICAA Council welcomes your thoughts on these matters. We invite you to email us at feedback@icaa.ab.ca.
Sincerely,
D. Blair Nixon QC, FCA
President, ICAA
The ICAA continues to monitor unification developments, both in Alberta and across the country. On Tuesday, May 15, the CGA and CMA bodies in Ontario both announced they have terminated unification discussions, citing an inability to make progress on key issues that had caused a pause in the discussions in April. The Institute of Chartered Accountants of Ontario responded by issuing a statement expressing the organization’s support of the national unification project. You can read the statement of each organization by following the links below: Institute of Chartered Accountants of Ontario: http://www.icao.on.ca/eLetter/COM/COM20120515.htm Certified General Accountants of Ontario: http://www.unitedprofession.org/2012/05/15/cga-ontario-terminates-unification-discussions/ Certified Management Accountants of Ontario: http://www.cma-ontario.org/index.cfm/ci_id/21636/la_id/1.htm Later that same day, CGA-BC posted a website notice, announcing that it “cannot support moving forward with unification without a similar merger in Ontario”. While CGA-BC has not explicitly terminated merger discussions, it has served notice that it does not expect it will be part of any potential unification in B.C. unless their colleagues in Ontario are part of unification in that province. You can read the full statement from CGA-BC here: http://www.cga-bc.org/about_us.aspx?id=24880 These developments could affect the unification initiative across Canada. The ICAA continues to carefully monitor developments in the unification project across the country for potential impacts on Alberta CAs. As has been previously stated, if it appears that unification will proceed in the majority of the country, Alberta CAs will be consulted to discuss and determine the appropriate response for the ICAA. In the meantime, the ICAA will continue to effectively and efficiently work on the priorities that CAs have identified, such as enhancing the value of the CA brand, growing the profession, and protecting the public. The ICAA Council continues to rely on member views in determining its priorities. Council members and senior ICAA staff would be happy to meet with you and your CA colleagues, at your office, to discuss unification matters and your thoughts on the future of the CA profession in Alberta. If you would like to schedule such a meeting, contact us at feedback@icaa.ab.ca and we will get back to you to make the arrangements.
The ICAA continues to closely monitor any unification-related developments and announcements across the country to ensure the interests of Alberta CAs and the public are served. The unification project is at varying stages in the other provinces and territories across Canada. Of particular note are the following announcements: British Columbia Between May 1 and 18, the Institute of Chartered Accountants of British Columbia (ICABC) will hold a membership vote regarding the BC provincial merger proposal. After the vote, ICABC will provide a report on unification to the BC government, which will include voting results and a recommendation on how to proceed. A draft version of that report has been developed and is available at http://www.ica.bc.ca/kb.php3?artid=3338. That report recommends continued work towards unification of the three accounting bodies in British Columbia, as part of a national initiative. As of May 2, CGA and CMA B.C. most recently made the following public statements about unification: CGA B.C.: http://www.cga-bc.org/about_us.aspx?id=24499 CMA B.C.: http://www.cmabc.com/index.cfm/ci_id/20029/la_id/1.htm
Ontario On April 13, the three accounting bodies in Ontario announced that three-way unification discussions in that province have been delayed. Specifically the Institute of Chartered Accountants of Ontario stated, “The CGAO and CMAO have advised that they need some time to think further about, expand and resolve certain issues before moving ahead.” You can read the positions of the three Ontario bodies at these links: CA Ontario: http://www.icao.on.ca/unification/KeyDocuments/Documents/COM20120413.pdf CMA Ontario: http://cpacanada.ca/wp-content/uploads/2012/04/CMAontario_MemberCommunication.pdf CGA Ontario: http://www.unitedprofession.org/2012/04/13/proposal-on-unification-of-the-profession-in-ontario-delayed/ Other Parts of Canada For your information, the current status of discussions in each jurisdiction is summarized in the table below. The ICAA will continue to carefully follow the status of the project in each jurisdiction across Canada in order to ensure Alberta CAs do not become isolated from developments in the CA profession nationally. If it begins to appear that unification will occur in the majority of the country, Alberta CAs will be consulted to discuss and determine the appropriate response for the ICAA. In the meantime, the ICAA will continue to effectively and efficiently work on the priorities that CAs have identified, such as enhancing the value of the CA brand, growing the profession, and protecting the public. The ICAA Council continues to rely on member views in determining its priorities. Council members and senior ICAA staff would be happy to meet with you and your CA colleagues, at your office, to discuss unification matters and your thoughts on the future of the CA profession in Alberta. If you would like to schedule such a meeting, contact us at feedback@icaa.ab.ca and we will get back to you to make the arrangements.
Prince Edward Island
Here in Alberta, the Certified Management Accountants of Alberta and Certified General Accountants of Alberta have indicated they are continuing to work on a two-way merger in accordance with the national unification project. Ultimately, any such merger would require the approval of the Government of Alberta. As all three accounting organizations operate under the same legislation, the ICAA anticipates that it would take some time for the statute to be revised in a way that could accommodate any merger within Alberta’s accounting profession.
The ICAA continues to monitor unification developments, both in Alberta and across the country. These discussions are at different stages in each jurisdiction. On March 15, 2012 the following developments occurred that might be of interest to Alberta CAs: 1. Alberta CGA and CMA organizations announced that they are going to continue to develop a provincial unification strategy, following the principles of the national unification discussions ongoing in all provinces and with the national CA, CGA and CMA bodies. 2. The Institute of Chartered Accountants of Manitoba announced that it had received a mandate from its members to proceed with a unification between the CA and CMA professions. 3. The Institute of Chartered Accountants of Newfoundland and Labrador released its provincial merger proposal to CAs in that province. The ICAA Council is supportive of the concept of unification of the accounting profession in Canada. However, we have chosen to approach unification differently from some of our counterparts in other provinces. We believe that unification should only proceed if (a) certain aspects are addressed nationally, (b) a more detailed merger proposal is negotiated for member consideration than those being presented in other provinces; and (c) members have the opportunity to vote in a formal, regulatory voting process. The ICAA has not closed the door on the possibility of rejoining the current unification discussions. Before doing so, however, it would like to have certain issues addressed.
As all Alberta CAs are likely now aware, on February 9, ICAA Council announced its decision to withdraw from unification discussions with CMAs and CGAs. The basis of that decision was primarily due to a lack of support from ICAA members and a number of national issues that have not been resolved. Similar to our read of member support before February 9, the majority of ICAA members who have communicated with the Institute since the announcement date have supported the decision to withdraw. Some of the ICAA members who have communicated to us that they did not support the decision to withdraw have indicated that it would have been advantageous for the ICAA to remain at the national table while merger discussions are ongoing. We acknowledge the views of this latter group. We confirm that the ICAA Council has no intention of being left behind the accounting profession in Canada. The Unification Framework that was released in January 2012 marked the culmination of the national negotiation process. The onus then shifted to the provincial bodies to develop a suitable provincial proposal, which the ICAA had, indeed, embarked upon with our provincial partners. During the course of those negotiations, it became obvious to ICAA Council that there were pressing issues—predominantly in the areas of “tagging” or naming, as well as the rigour of the proposed education, regulation and professional standards—that were beyond the scope of provincial discussions, and were best resolved nationally. Unfortunately, it was equally clear that these issues were not going to be coordinated and resolved at the national or interprovincial levels within the suggested timeframes of this unification project. CAs have been trained to be analytical. That being the case, the ICAA Council felt that its members would prefer to vote on a proposal that lays out the full details of a merger, its impacts and the implementation process. We believed that this “detail-based” approach is the appropriate basis upon which we should expect members to vote, especially in circumstances where Alberta CAs would not be in the majority position after a three-way merger was effected. This detail-based approach is not unlike the disclosure requirements that governments impose on other organizations which are proposing a fundamental change in their relationships with their respective members. Furthermore, we believe full details will be required to gain support from the Alberta government for this fundamental change to the accounting profession. The detail-based approach that is suggested by the ICAA represents a philosophical difference from the approach of some other Institutes which have, or may be inclined to, put forward a high-level, “principle-based” merger proposal, without any accompanying particulars. Under the principle-based approach as we understand it, members of other institutes will be asked to vote without knowing the particulars associated with the deal. By way of example, under the principle-based approach, members will not know at the time they vote complete details of how the profession would be governed in a merger scenario. Instead, under the principle-based approach, the plan is to deal with the outstanding national/interprovincial issues after member support is achieved. As such, under the principle-based approach, members are never able to vote on the details associated with the merger, notwithstanding the importance of particulars such as tagging and governance, all of which will impact on them. Withdrawing from unification discussions does not mean the ICAA or its elected Council is walking away from its partners in the CA profession. The ICAA intends to be a full, contributing member of the Canadian accounting profession generally, and the CA profession specifically. That being said, if the majority of provinces across Canada do enact a merger, Council would need to reconsider its approach, and consult with Alberta CAs on how the CA profession in Alberta should respond. Further, the ICAA continues to work with other provincial CA Institutes and our provincial counterparts on having an open dialogue across Canada on the outstanding issues. Regardless of the direction of other jurisdictions, the ICAA plans to pursue partnerships and opportunities for efficiencies that make sense with our provincial and national colleagues, including, hopefully, CMA Alberta and CGA Alberta. In the meantime, the thoughts of Alberta CAs on this matter continue to be not only welcome, but vital. To share your perspective, please email feedback@icaa.ab.ca. D. Blair Nixon QC, FCA President, ICAA Council
Dear Alberta CA:
Since May 2011, ICAA Council has been actively involved in discussions involving unification of the accounting profession and the introduction of the Canadian CPA designation. In these discussions, Council has diligently explored the opportunities, risks, and feasibility of a merger here in Alberta. As with all Council deliberations, protection of the public has been our foremost consideration. At the same time, serving Alberta CAs and respecting their views is also critically important. The ICAA has decided to withdraw from participation in the unification discussions with CMAs and CGAs, at both the provincial and national levels. This approach differs from the current or proposed plan that is being discussed by other Provincial Institutes. Council has compelling reasons for this decision to withdraw. First, Council wishes to respect the will of the Alberta CAs whom it serves. Feedback from Alberta CAs, through both formal polling and informal consultation, shows that there remain too many unresolved questions, and a lack of perceived benefits, for Council to have a mandate from the membership to move forward with the merger concept as described. In addition, it became apparent that the level of member support that would be needed to achieve the necessary legislative changes likely would not be obtained. Second, during the merger discussions the ICAA identified critical elements that Council believes must be harmonized across Canada if the merger were to proceed. These critical elements include governance, interprovincial mobility of members and “tagging” protocol. We are of the opinion that the harmonization of the critical elements could not be achieved within the timeframe set out for the merger project. Withdrawing from negotiations on the current merger project does not mean that Council did not see a significant amount of merit in the concept. Further, it does not mean that Council is choosing to stick with the status quo when it comes to responding to the evolving business environment—provincially, nationally and globally—in which we work. Notwithstanding the ICAA withdrawal, we are hopeful that the CMAs and CGAs of Alberta will be willing to pursue opportunities for productive cooperative initiatives in areas where we share common ground. For many years, and certainly throughout merger discussions, the representatives of those two designations have worked with the ICAA in a genuine spirit of trust and a commitment to excellence. We therefore believe that there is still much that can be achieved. Examples of such cooperation include the possibility of shared initiatives in the areas of member education and member services. Council will continue to monitor developments across Canada in order to be able to respond appropriately to any significant changes in the environment. In other provinces, CAs likely will be considering various forms of merger proposals. If a merger proceeds in a large number of provinces, Council will need to re-evaluate its position, in the interests of the Alberta CA membership. Regardless of how these processes unfold, we are committed to working closely with our provincial and national partners to advance the profession and serve members as efficiently as possible. Finally, I want to emphasize on behalf of Council that the input, advice and suggestions we received from Alberta CAs—whether they supported or opposed the merger project—has been exceptionally valuable and instructive through the course of our deliberations. We thank all Alberta CAs who took the time to pass their thoughts to us. You can share your further thoughts and perspectives by emailing feedback@icaa.ab.ca. In particular, we would be interested in hearing from CAs about whether they would like the ICAA to host a town hall forum in their community to discuss this decision further. If sufficient interest is expressed, the ICAA will consider holding a series of town halls on the matter. Yours sincerely, D. Blair Nixon QC, FCA President
On January 17, the Canadian Institute of Chartered Accountants (CICA) released a national unification framework. The unification framework provides the general tenets of a potential merger of the CA, CMA, and CGA bodies, and addresses some of the concerns brought forth by CAs across Canada during the consultation period. In particular, ICAA Council feels the proposed certification process, which seeks to ensure the pre-certification education standards of the CA profession are maintained, will be of interest to Alberta CAs. Here in Alberta, discussions around the proposed merger continue at the provincial level among ICAA, CMA Alberta and CGA Alberta. Any detailed provincial merger proposal, if one can be agreed to, will adhere to the national framework. The timeline for completion of a provincial document remains spring of 2012, and any such proposal would be subject to a vote by Alberta CAs. Your perspective on this important issue remains vital. Your thoughts can be submitted via email to feedback@icaa.ab.ca. D. Blair Nixon QC, FCA President
For more information:
The following message was emailed to all Alberta CAs on December 19, 2011.
As 2011 draws to a close, it is an appropriate time, on behalf of the ICAA Council, to provide an Alberta update in respect of the CA/CMA/CGA unification discussions (the “Proposed Merger”). The Proposed Merger has been one of the primary issues with which Council has dealt during the 2011 calendar year, and no doubt the most complex. Council has spent considerable time and effort to fully understand the opportunities and challenges which are facing the profession, and how a potential unification would impact the environment in which we all work. Council understands that there is not a consensus amongst Alberta CAs on the concept of the Proposed Merger. However, the conversation is being held in all jurisdictions and Council believes it has a responsibility to stay involved to advocate on your behalf wherever and whenever discussions like this take place. Looking Back The Proposed Merger process started in May 2011. At that time it was a two-party discussion between the CA and CMA designations, both nationally and provincially. Those discussions were predicated on the agreement of eight overarching principles, which are as follows. 1. Continued use of existing designations. 2. Evolution to a new single designation. 3. Retention but no expansion of rights. 4. Development of a new high-quality certification program. 5. Merged operations and governance. 6. Focus on the new CPA brand. 7. Enhancement of post-qualification specialties. 8. New uniform regulation and licensing. To gather important feedback and hear the perspectives of Alberta CAs concerning the Proposed Merger, a consultation process was undertaken. This process included a series of town hall events which were held throughout the province. It also included national and provincial polling of members’ views, and the solicitation of comments through a special ICAA email address and, nationally, through a dedicated telephone number and website. Your collective feedback has played an important role and aided immensely in Council’s deliberations. We thank all of you who have taken the time to ensure your voices are heard. In October 2011, CGA Alberta joined the Proposed Merger discussion. The CGA Alberta contingent joined the ongoing discussions in Alberta based on agreement with the eight principles noted above. The CGAs in many other provinces have also joined the discussion within their respective jurisdictions, as did the national CGA body. At approximately that same time, it was determined that any formal merger proposal would have two components: a national framework and a detailed provincial merger plan. This two-prong approach is currently being contemplated because the Proposed Merger is largely being coordinated nationally, but the accounting profession in Canada is regulated provincially. As a consequence of the independent provincial and territorial regulatory regimes, each jurisdiction would require its own formal merger proposal in order to address its own particular issues. Current Status While Proposed Merger discussions are ongoing, the ICAA Council has not yet taken a position on the concept. We acknowledge that some of you might be asking why Council has not taken a firm stand one way or the other on the Proposed Merger on behalf of its members. Council’s view on this question has been that it is important to continue discussions with our potential unification partners, and to make our best effort to negotiate a provincial proposal that ensures the public interest is protected, the priorities of the profession are fully considered, and the views and concerns of Alberta CAs are addressed and dealt with appropriately. Until the underlying terms and conditions are agreed to amongst the three negotiating parties within Alberta and a national framework is also agreed to, the ICAA Council is of the view that it would be premature to take a position on the merger. We take this cautious approach only because we want to know and understand the terms and conditions that will apply to the proposed unification entity insofar as the provisions thereof will impact our members for years to come. Provided those goals are achieved and a provincial proposal is written, Council will decide on the recommendation that it will make to the ICAA membership in respect of the Proposed Merger. Notwithstanding that Council has not yet made a determination on the matter, it believes it is essential that the ICAA remain involved in this process. Indeed, Council is of the view that it would be irresponsible not to be engaged in the process because that alternative course of action would leave Alberta CAs isolated from national developments and discussions that directly affect the profession. As part of the ongoing consultative process, it has become apparent that there are some issues that Alberta CAs want addressed. Council has undertaken to address these key issues as a prerequisite to submitting the Proposed Merger to a vote of Alberta members. These issues include the following. 1. A demonstration of how the standards of the CA profession will be protected, in the public interest. 2. An outline of the post-unification governance structure. 3. A determination of how the CA designation can be used during the 10-year transition phase and beyond. 4. A detailed understanding of how the education/certification program would be structured to ensure it meets the highest international standards, and fulfills market needs. 5. An outline of the benefits of unification to the CA profession and to individual CAs. 6. An analysis of the risks of proceeding with the Proposed Merger, compared to the risks of not proceeding. 7. The determination of how the profession, nationally and provincially, would deal with a patchwork of accounting designations across Canada in the event that unification proceeds on a three-way basis in some jurisdictions, on a two-way basis in other jurisdictions and perhaps not at all in other jurisdictions. Going Forward Council believes that its first responsibility, and primary accountability, is to protect the public interest. That said, it is also critically important for us to serve Alberta CAs and to respect their views. If and when major developments occur, Council will provide Alberta CAs with another opportunity to provide their input through a second round of substantive consultations. As well, from the outset, ICAA Council has maintained that there will be a vote of ICAA members on any merger proposal. We remain committed to that principle. We expect that a national unification framework is likely to be issued in early 2012. In the meantime, the ICAA Council and CEO will continue discussions with CMA Alberta and CGA Alberta in an ongoing effort to determine if the principles and details of a provincial proposal can be agreed to, subject always to an Alberta CA member vote. To better ensure that all issues are considered in the appropriate context, Council will evaluate any provincial proposal against the goals and priorities of its strategic plan. This evaluation will be done by Council in the context of its ongoing efforts to ensure that the provincial proposal meets the long-term vision of our profession in Alberta. While the national framework will be important in terms of outlining the details of some national goals and principles for unification (e.g., a rigorous certification program), it will be the provincial proposal which would include the specific details and mechanics of a merger. Further, it would be that provincial proposal on which the ICAA membership would be asked to vote. The timeline for completion of a provincial proposal is spring 2012. To conclude, we again thank the Alberta CA membership for the thoughtfulness they have brought to the Proposed Merger process over the last several months. Council will continue to provide ICAA members with information and progress updates as this process continues. In the meantime, we urge you to continue to provide us with your thoughts by contacting us via email at: feedback@icaa.ab.ca. In closing, we send best wishes from every Council member to each Alberta CA for a safe and joyous holiday. All the best in 2012. Yours sincerely, D. Blair Nixon QC, FCA President
Interested in hearing what your CA colleagues are saying about the proposed CA/CMA merger concept? You can now listen to the entire transcript of the ICAA’s townhall forum held with CAs and ICAA Council members in Edmonton on June 20. The forum opens with an overview of the merger concept, presented by Council President Blair Nixon. The remainder of the forum comprises comments and discussion from CAs from the floor. The transcript is unedited, except that names of individual speakers from the floor have been deleted. (Total length: approx. 1 hour 10 minutes.) To listen to the transcript, click here. (Note: To download the mp3 version of the transcript, right-click on the link and select "Save Target As..." The presentation can then be loaded onto an mp3 player.)
In May, Canada’s Chartered Accountants entered into discussions with Canada’s Certified Management Accountants to explore the merits and feasibility of uniting our respective national and provincial organizations. In October, Canada’s Certified General Accountants joined the discussions at the national level, in addition to several provinces—including Alberta.
To bring our organizations together, the creation of a new designation is being considered—the Chartered Professional Accountant or CPA—along with a new common qualification program. Combining the strengths and expertise of both organizations, the uniquely-Canadian CPA designation could be equally strong for financial and management accounting, and it could be expected to evolve into an internationally recognized business credential.
The organizations have learned from previous attempts to unite professional bodies. The concept being considered does not require either accounting organization to issue its designation to members of the other; nor would any member be required to give up their current designation. To be clear, a CA would still be a CA, a CMA would still be a CMA, and a CGA would still be a CGA.
The transition to using the CPA alone would be complex and an abrupt change would not be in the best interests of members or the public. The designations hold significant meaning across Canada and around the world, and it would take time to promote the CPA brand so that it fully represents the best of all three designations. As such, the initial concept includes a transition period of approximately 10 years, during which members would use the new CPA designation in conjunction with their existing CA, CMA, and CGA designations. After this transition period, the new CPA designation could be used on its own.
From May until mid-September, the ICAA and other involved organizations undertook an extensive consultation process with our membership. The consultation officially closed on September 16.
An interactive member engagement website, www.CPACanada.ca, still serves as the hub for information. In June, face-to-face dialogues took place via a series of town hall meetings held across the province. The audio version of the Edmonton townhall meeting can be found above.
If you would like to provide further feedback to the Institute of Chartered Accountants of Alberta, please email us at feedback@icaa.ab.ca. The ICAA will keep members and stakeholders advised throughout this exploratory process. At the conclusion of the consultation, the organizations will review all member and stakeholder feedback to inform the way forward. If discussions were to proceed, a concrete provincial unification proposal will be presented to the respective memberships in 2012 for further consideration.