CEOUpdate
An Update on the CICA and CMA Merger Discussion
Dear colleagues:
It has been a month since the Canadian Institute of Chartered Accountants and the Society of Management Accountants of Canada announced their intention to enter into merger discussions. Since the news broke, a few of you have contacted me directly, while others have expressed their opinion on social media sites such as LinkedIn, Twitter and at CGA-Canada’s www.visioncga.org. Although little has changed in the interval, it is important to update you on the issue. While a majority of people who contacted me supported CGA’s position, a small number were curious why CGA didn’t remain in the discussions and why ‘tagging’ was such a stumbling block. Others mistakenly thought that CGA had broken off the talks.
First, I would like to clarify some of the facts. When CGA learned that our competitors were in merger discussions, we approached them with a desire to see instead if this was a potential opportunity to unify the profession. We held exploratory talks and the other two bodies set several non-negotiable conditions before we could move on to formal discussions. Since two of these conditions (what is known as ‘tagging’ and their requirement that CGA withdraw its support for the Agreement on Internal Trade [AIT]) were not acceptable to CGA, discussions did not proceed. We did offer to explore other alternatives, but the CAs and CMAs rejected those overtures and terminated discussions.
I would like to elaborate a little on CGA’s perspective on tagging and the AIT.
One of our primary goals throughout the discussion process was to protect the interests of CGAs in a merged organization. This was one of our main concerns with ‘tagging,’ where CGAs, CMAs and CAs would have to state both their original designation and the new designation for a minimum period of 10 years. The requirement was for a member to use both, not simply the new designation. With tagging and a lengthy history of conflict over professional rights, there was the real prospect that the interests of CGAs could be compromised. We wanted a structure that would ensure that the interests of CGAs would be respected and that CGAs would have the same benefits as other members in the new organization. Reducing the 10-year term significantly or simply eliminating the ‘tagging’ as a requirement would mitigate that risk, as well as reduce confusion over introducing a fourth designation in the marketplace. However, the Institute felt tagging for a 10-year minimum period was required for their members to support this process.
The second issue was the AIT. Currently, there is a challenge led by the Government of Manitoba against Ontario for this exception under public accounting in support of the underlying principles of full labour and professional mobility. If the challenge is successful, this may benefit CGAs in all provinces. We were not prepared to drop our support of this challenge as we believe that CGAs must have full professional mobility across Canada under the AIT.
There are benefits in having a strong unified profession that certifies and speaks for all professional accountants and CGA fully supported exploring that option. We believed that the best route to a united profession was to bring all three parties together as equals and agree on the vision and principles at the start of any merger discussion.
Since this issue is ever changing, I encourage you to stay up to speed by visiting our website and visioncga.org, and also linking to us on Twitter and other social media sites. You can also email us directly with any comments at merger@cga-bc.org. In addition, as we visit the various chapters across the province, we will continue to update members about this issue.
Quebec Explores a Different Route
While the current two-way merger discussions are underway between the CAs and CMAs, a parallel three-way discussion among CGA, CA and CMA has been taking place in Quebec. The province of Quebec regulates the professions differently from other provinces and their regulatory body – the Office des professions du Québec – has required that the three bodies explore the possibility of creating a unified body. The professional accounting bodies in Quebec are in discussion at this time and are operating independently from the national bodies in this process. How this will impact national discussions, especially if the Canada-wide discussions do not proceed, is uncertain at this time. The Association will provide an update as it becomes available.