Canadian accounting profession unification


was the second nation in the world to formally organize its accounting profession, after the United Kingdom, but it occurred in a fragmented manner by both locality and specialty. It would only begin to experience significant consolidation from 2012 onwards.
After some controversy in the first part of the 20th Century, it has been generally agreed that regulation of the Canadian accounting profession falls within provincial jurisdiction over matters of a local and private nature, as well as under the provincial education power with respect to training for achieving such professional qualifications.

Timeline of Canadian accounting bodies

Creation of different specialties

Chartered accountants

Organization of provincial societies

Demand for trained accountants arose as early as the 1840s, when the first Canadian professional accounting firms were organized in Toronto and Montreal.
The Association of Accountants in Montreal was organized as the first accounting organization in North America in 1879, and was incorporated by an Act of the Legislative Assembly of Quebec. Ontario would follow several weeks later with the formation of the Institute of Accountants and Adjusters of Ontario, which was later incorporated as the Institute of Accountants of Ontario in 1883 under the direction of E.R.C. Clarkson, one of the founding members of Clarkson Gordon & Co, and a key member in the growth of the accounting and insolvency consulting industry in Canada. E.R.C. Further acted as a frequent advisor to the Canadian Senate in regard to the banking committee. It was reconstituted as the Institute of Chartered Accountants of Ontario in 1911.
As the AAM tended to have an anglophone membership, the Institute of Accountants and Auditors of the Province of Quebec was later incorporated to service growing demand within Quebec's francophone population. In 1919, the AAM began to offer admission for members of the IAAPQ.
Manitoba would be the third province to organize its chartered accountants, and it would later be instrumental in organizing similar professional bodies in British Columbia, Alberta and Saskatchewan.
Nova Scotia organized in 1900, followed by New Brunswick in 1916 and Prince Edward Island in 1921. The latter two bodies were organized in an irregular manner compared to those of other provinces, which resulted in their qualifications not being recognized by Nova Scotia until 1925, and by Quebec and Ontario until 1926.
Outside Canada, the Dominion of Newfoundland incorporated the Institute of Accountants in 1905, but was pressured to revoke statutory protection of its designation the following year. This was not reversed until Newfoundland joined Confederation in 1949.

Attempt to nationalize the profession

Tensions erupted following a disciplinary hearing in 1890 held by the Institute of Accountants of Ontario into an audit conducted with respect to Confederation Life. While the action itself affirmed the importance of auditor independence, it caused a rift in the IAO membership and the resignation of several prominent members of the governing Council in 1891.
The early CA bodies, with the exception of the AAM, also started to relax their entrance requirements to allow the admission of accountants who were not in public practice. An initial effort to create a national organization in 1901 was quashed due to local opposition, but this caused a concerted effort, sponsored by the AAM, to create one that would be restricted to practicing accountants. As a result, the Dominion Association of Chartered Accountants was created in 1902, in an attempt to create a national status for the profession through direct entry of qualified applicants to membership.
Ontario passed an Act in 1908 granting the ICAO exclusive rights to the CA designation, and, on DACA's petition, the Governor in Council disallowed it in 1909, on grounds of federal paramountcy in having created a national body, as described in a memo by Minister of Justice and Attorney General of Canada Sir Allen Aylesworth recommending the measure. A subsequent 1910 Act was disallowed for similar reasons in 1911. With the mediation of the President of the British Society of Incorporated Accountants at a meeting in Chicago, the ICAO and DACA leaders subsequently reached an agreement in which DACA would be reorganized as a federation of the provincial Institutes effective from 1909. The Act was subsequently passed again in 1911, with a concession granted to accountants who were members of DACA on December 16, 1909.
DACA would become the Canadian Institute of Chartered Accountants in 1951. It would expand internationally in 1973, when the Institute of Chartered Accountants of Bermuda was incorporated and subsequently obtained affiliation with the CICA.

Certified general accountants

The creation of large business and governmental organizations increased the demand for accountants on their payrolls, which called for efforts to address their unique needs without the necessity of apprenticeships demanded by the CA firms. The Canadian Association of Accountants was formed in 1908, arising from a technical self-study group of accountants working at the Canadian Pacific Railway, which led to the creation of the General Accountants Association in 1913. Despite initial assurances that its members would refrain from practicing public accounting, it began advertising examinations in that field in 1917, thus triggering conflicts with the CA bodies that would last for decades.
Because of such protracted opposition, it was only in 1999 that the GAA was able to change its name to the Certified General Accountants Association of Canada. Over the years, portions of its membership would be admitted into membership of other professional bodies, such as the admission into Quebec's Association of Accountants in 1920, the CGA/CA merger in Quebec in 1946, the CGA/CPA merger in 1949, and the CGA/CPA merger in Manitoba in 1950.

Cost and management accounting: from CA possession to the creation of RIAs and CMAs

Towards the end of the First World War, several significant issues forced organizations to invest resources into the creation of cost accounting functions:
In a move designed to prevent the newly-created General Accountants Association from moving into that field, DACA created the Canadian Society of Cost Accountants, with membership originally restricted to chartered accountants.
The CSCA would initiate efforts to standardize education in cost accounting, and entered into an affiliation agreement with the US National Association of Cost Accountants in 1922. When the CSCA tried to obtain NACA's educational materials at a more reasonable cost in 1926, NACA proposed a merger of the two organizations. This was rejected, and the affiliation was subsequently dissolved. The Society began to issue "Certificates of efficiency" in 1927 to its graduates.
In the 1930s, there would be internal tensions as to what areas of company accounting the CSCA should focus on, and, in 1939, members wishing to concentrate more on management accounting left to form the Controllers' Institute of Canada.
When provincial societies began to be formed in 1941, the "Registered Industrial and Cost Accountant" was created for its members. This initiative was generally accepted in most provinces, but there was resistance in British Columbia as the promoters of that effort were only CGAs and independent accountants. It would pass only when the enabling Act specified that the RIA designation was available only to those members who were also CAs.
The designation was simplified as "Registered Industrial Accountant" in some, but not all, provinces around 1967. It would be replaced by the Certified Management Accountant designation beginning in 1976, but the province-by-province implementation would be completed only in 1985.

Certified public accountants: the first CPAs

The first Canadian CPA designation arose from several parallel moves:
The CPAs subsequently gained statutory recognition in most, but not all, provinces. Because of CA opposition in Nova Scotia, it was only able to use the designation of "Registered Public Accountant".
The Quebec CPAs were forced to merge with the ICAPQ in 1946 upon the reorganization of the Quebec profession. In 1962, the CAs and CPAs agreed to merge nationally, and the remaining provincial CPA bodies either dissolved or became dormant.

Accredited public accountants

The "International Society of Commerce" was first noted in an advertisement in Hamilton, Ontario, as early as 1921, and its members were conferred with the designation of "Accredited Public Accountant". The ISC, located in Winnipeg, formed the "Institute of Accredited Public Accountants" in 1938, which was federally incorporated in 1946. It initially attempted to organize a provincial institute in British Columbia in 1937, but failed to receive legislative approval.
When Quebec consolidated the auditing profession in 1946, APAs in the province who had practiced accounting continuously from 1942 received statutory recognition in Quebec. The APA designation later received statutory protection in New Brunswick, Manitoba and Saskatchewan.
An attempt was made to form a body in Ontario by way of private bill in 1949, but it was withdrawn at second reading on grounds advanced by the CA and CPA bodies that a public bill would be a more appropriate choice for action. That option was never subsequently pursued. Similar efforts to secure recognition in British Columbia and Alberta were also pursued at the time, but they failed as well. Provincial societies were later organized in British Columbia and Ontario in 1957.
The APAs would later consolidate with other accounting organizations. They merged with the CPAs in New Brunswick in 1952, but other APAs revived the organization in 1961. Later efforts by other provincial bodies to merge with the CGAs proved to be more conclusive. The Ontario society, however, decided in 1963 to restrict its membership to those members who held public accounting licenses. As no future licenses would be conferred on APAs after 1962 as a result of that year's reorganization of the Public Accountants Council, it would gradually cease to exist over time.
While the APA designation is not now recognized by any Canadian jurisdiction as a professional designation in active usage, the Canadian Institute of Accredited Public Accountants continues to exist, in alliance with the Society of Professional Accountants of Canada. The SPAC confers the APA designation as an honorary title to Registered Professional Accountants of distinction.

Creation of uniform accounting standards

From 1946, the chartered accountants took the initiative to codify generally accepted accounting principles and generally accepted auditing standards in Canada:

Licensing of public accounting

In addition to conferring exclusive rights to use specified designations on the members of the various professional bodies, most provinces have also required those who pursued public accounting to obtain a separate permit. The permit is issued by:
  1. a specified professional body, either with or without the supervision of a provincial agency;
  2. a provincial agency, either generally or where a qualified accountant does not belong to a specified body.

    Consolidation: Rise of the Chartered Professional Accountants (2012-)

Implementation by jurisdiction

The various provincial bodies were federated nationally in the following bodies:
After a failed merger attempt in 2004, the CAs and CMAs began new discussions in 2011, and invited the CGAs to participate. While the three national bodies supported merger discussions, there was significant tension among their memberships, notably within the CAs, and at one point the CGAs and CMAs in Ontario withdrew from talks because of concerns over the potential loss of their identity. Proponents of the proposal argued that it would strengthen the influence, relevance and contribution of the Canadian accounting profession with domestic and international stakeholders and serve the public interest through common codes of conduct, disciplinary systems and licensing regimes.
Even though the legislative process took seven years to complete, the implementation was greeted with little controversy, with implementing bills generally receiving quick passage.
Federal recognition of the merger involved the amendment of various Acts to reflect the change of designation:

Reservation of other designations and descriptions by jurisdiction

In addition to preserving the legacy CA, CGA and CMA professional designations, the following are also protected:
In addition, Yukon and British Columbia have several other protected designations in use:
Yukon also grants an honorary designation known as "CPA ".
Alberta has opted to allow all those with legacy designations to use them in conjunction with "CPA" during the first 10 years from July 1, 2015, or to use the legacy designation alone during that time. After the 10-year transition period, the "CPA" designation can be used on its own by such legacy holders.

Implementation in Quebec

The unification initiative was the fifth such move since 1973, in which Quebec's accounting bodies sought to merge.
On March 28, 2012, a bill was tabled in the National Assembly of Quebec to create the Ordre des comptables professionnels agréés du Québec. It subsequently received Royal Assent on May 16, 2012, and went into force on the same date.

Implementation in Ontario

The implementation of the designation in Ontario followed a complex route:
Because of Ontario's separate licensing régime for public accountants, those holding licenses from the PACPO must identify themselves as "Licensed Public Accountants" or post the initials "LPA" immediately after their professional designation, such as "CPA, LPA", "CPA, CA, LPA", "CPA, CGA, LPA" or "CPA, CMA, LPA".

Implementation in British Columbia

In May 2013, a merger agreement was announced with respect to all three accounting bodies in the province. Pending the necessary legislative measures to create an amalgamated body, the designation was introduced in BC after the passage of by-laws by all organizations, as ratified in the Miscellaneous Statutes Amendment Act, 2014 by the Legislative Assembly of British Columbia. The actual implementing legislation for amalgamating the three bodies received Royal Assent in March 2015, and came into force in June 2015.

Implementation in Nova Scotia

Unlike other jurisdictions, Nova Scotia decided not to amalgamate its legacy accounting bodies into the new CPA provincial body. It has instead declared that members of the legacy bodies must pair their legacy designation with the new CPA designation. In a news release, the Province noted that this was the first of two steps in the process, with merger of the three accounting bodies and updating the regulatory framework taking place at a later date. A subsequent Act was passed in December 2015 to effect the amalgamation, which came into force on August 2, 2016.
A companion Act was passed at the same time to expand the role of the Public Accountants Board of Nova Scotia, so that it can issue separate licenses for performing auditing and non-auditing functions. That Act substantially came into force on the same date, with the exception of certain provisions allowing the licensing of public accountants from outside the Province. As of September 2019, this system of parallel regulation will be abolished, and CPANS will be granted the power to issue public accounting licences.

Impact on the Canadian landscape

During the years running up to the 2012-2018 consolidation, as well as thereafter, there has been debate as to the practical impact of the merger.
The 2010-2011 CA/CMA position paper on the proposed merger gave five reasons why it should be pursued:
  1. The existing regulatory framework was complex and costly.
  2. The differences in the functions pursued by the various designation holders were disappearing.
  3. A strong Canadian voice was needed on the world stage.
  4. It was necessary to compete with other accounting designations that were going global, such as the Chartered Global Management Accountant and CPA Australia.
  5. It was desirable to act proactively, instead of waiting for reforms imposed by various governments.
There was significant resistance by the CA membership at the time, who were concerned that their collective image would be diminished as a result.
Following the consolidation, the following observations have been made:
  1. Based on a social network theory analysis, it appears that those associated with the former chartered accountant bodies have generally had a disproportionate impact in the attainment of political power within the new CPA bodies, extending even to ousting the knowledge base that had been accumulated within the other legacy bodies.
  2. The new CPA bodies have adopted a more passive approach in recruiting new members, in contrast to the activity undertaken by the previous legacy bodies.

    Foreign professional bodies active in Canada

As possession of a Canadian professional accounting designation is not generally a mandatory requirement to hold a Canadian financial position, other professional bodies have members who also work in Canada, of which the most significant are:
The provincial CPA bodies have been active in seeking to protect the designation. In October 2019, however, CPA Ontario and the Quebec Ordre failed in their oppositions filed at the Trademark Opposition Board with respect to certain trademark applications filed by AICPA and CIMA, as the protections secured by provincial statutes were irrelevant in the face of their prior use by the foreign bodies as governed by federal law.

Academic writing

Case citations

Legislative proceedings

Professional media