A Submission to the Federal Competition Policy Review Panel
by the Institute of Chartered Accountants of Ontario

As part of its CA Competitiveness Agenda initiative, the Institute of Chartered Accountants of Ontario has submitted a brief to the Competition Policy Review Panel emphasizing that our continued global competitiveness depends on addressing a wide range of issues.

The Panel, led by former BCE Inc. CEO Lynton (Red) Wilson, will report to the federal Minister of Industry in June. In October 2007 it issued a consultation paper offering stakeholders an opportunity for comment on issues related to investment and competitiveness. The Institute’s submission details the need for the following legislative and regulatory changes to support the financial services sector – and the finance professionals who keep it on the move:

National public accounting standards

Public accounting is the business of expressing independent assurance on financial statements and other financial information of enterprises of every size, to ensure that the information truly reflects their financial condition. Large and small investors, financial institutions and other third parties then use that assurance to help them make informed investment and lending decisions.

While the CA profession has consistent, internationally recognized standards of qualification and conduct for public accounting, the actual legislated standards vary from province to province, ranging from internationally recognized standards in Ontario and Quebec to no standards at all in some jurisdictions where non-CAs are authorized to practice. No other major country has such wide inconsistencies between internal jurisdictions, putting Canada at a disadvantage when raising capital to create jobs and finance innovation.

Legal liability reform

Currently, Canada is saddled with an antiquated system known as joint and several legal liability. Under such a system, a party that is found to be just one per cent responsible for a financial loss can be held to account for fully 100 per cent of a claim. This has a potentially tremendous negative impact on doing business in a jurisdiction as it increases the threat to financial advisors of being held responsible for disproportionately heavy costs in a legal case. This is especially relevant to the audit profession and is increasingly threatening to shut off access to vital financial and accounting services for businesses of every size. The current regime also acts as a constraint on Canada’s ability to attract and retain top professional talent, due to the fear of exposure to an unreasonable degree of legal liability.

Links to the Institute submission by section:

Submission Appendices: