Industry Committee on March 12th, 2009

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Now, the organization has been before committee when it was being studied here before, is that fair to say?

[Tamra Thomson]

Not for this bill, but for predecessors of this bill.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

For one of the previous incarnations of this bill, for pretty much the same as this one...?

[Tamra Thomson]

No.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

You haven't?

[David Stevens]

There was a submission in 2005.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

There was; it was before committee in 2005.

[Tamra Thomson]

In 2005, but I'm not....

[David Stevens]

I think it died on the order paper before there were committee hearings.

[Tamra Thomson]

Yes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

There have been committee hearings, I think, in a previous incarnation, have there not?

[The Chair, Conservative, Michael Chong]

Yes. In the 38th Parliament, we held committee hearings on one of the previous bills on this issue.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay.

Well, I was going to follow up with a question about any differences in your recommendations, but I guess not.

To the CGA, looking at this package—I don't know if it was submitted to all members or to the minister's office—I see that you recommend that the term “public accountant” be replaced with the term “auditor”.

What is the problem with the term “public accountant”? Maybe you can highlight that.

[Carole Presseault]

Thank you, Mr. Lake, for your question.

Actually, yes; in the spirit of time, or to ensure that we didn't run out of time, we really did focus on the top two of our three recommendations, and our top two concern, that second requirement, the independence required. But we have had discussions with the department and with the minister's office and others about the use of the term “public accountant”.

The term “public accountant” is not used at all in federal legislation. We've just actually completed our legal research, and it's a quagmire. I don't know if that's the right English word to explain it. It's just used so many different ways. The terminology “public accounting” means very different things when you go from jurisdiction to jurisdiction.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

But it is used in other jurisdictions.

[Carole Presseault]

It is used in other jurisdictions, but it means different things according to which jurisdiction you're in. It's not used in federal legislation, like the Bank Act, the Elections Act, the CMHC Act. It's not used. The word “auditor” is used in that legislation.

It becomes even more complex when you switch to the French, because in French they use the expression “expert comptable” when I think they want it to mean “public accountant”. And “expert comptable” means a professional accountant. Here's where it just gets a little bit trickier: not every professional accountant is a public accountant or provides public accounting services. There's an additional requirement.

I talked a lot about experience, examination, ethical requirements. There are additional requirements of those professional accountants, those experts comptables, who perform public accounting services. Not everyone can hang up their shingles. Professional associations require that extra.

That's is why we feel it's quite important to recognize in legislation that not everyone can provide these services; only those who have met the requirements of the regulatory bodies to provide public accounting services.

[The Chair, Conservative, Michael Chong]

Thank you very much.

[Carole Presseault]

I'm sorry; you must be so confused.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

No, no, that's fine.

[The Chair, Conservative, Michael Chong]

If I could, I'll just add a clarification. At one point the big issue, broadly speaking, with the previous legislation was between chartered accountants and certified general accountants. There was a concern that we were narrowing or being too specific as to which type of professional designation could be considered under the act.

[Carole Presseault]

We've had the benefit of a few years of study of this bill. I've seen different incarnations of the bill. We had the benefit, of course, on the independence standard, to see the development and evolution of the standard, which is why we've now come back seeking an amendment in that aspect.

The issue really is the ability of the federal legislation to establish who is competent to be providing these services. There's a lot of competition in the accounting marketplace. We know that and we live that. I don't think this is so much about competition as it is about having some equivalency or simplicity within federal legislation so that it compares well with the Elections Act, the Bank Act, the CMHC Act, or other legislation.

[The Chair, Conservative, Michael Chong]

Thank you, Madam Presseault.

Mr. Maloway.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Thank you, Mr. Chairman.

On Tuesday, I think it was, I listened to the presenters from Imagine Canada. It was hard to believe that we've gone through nine years of dealing with this bill. The presenter was telling us that there are 160,000 charities in Canada, or some huge amount anyway, and a lot of them don't even know that this legislation exists at this point. It would seem to me that at some point somebody should have been put in the position of notifying them by mail, or in some way, that legislation like this was going to come.

A lot of the non-profits, as you probably know, are really small. There's a statement here by Imagine Canada to the effect that probably half of them have no employees at all, so what we're doing here, more than likely, is choking them with compliance costs. We've seen that with election financing laws across the country. We all know that. We're dealing with a totally different reality than we were when I started in this business 23 years ago. It's totally different. We're passing on what we've done to ourselves to the charities and the non-profits, from what I can see.

Another issue, in addition to the compliance costs, is the whole area of the directors' and officers' liability. As you know with the insurance market, some years you can get insurance at a reasonable cost, and some years you can't. It can jump from $5,000 to $20,000 in one year. There are big deductibles of $5,000. Financial statements are the worst part of it. They require these little guys to produce financial statements. At the end of the day, a lot of them just walk away in frustration. They're not covered. A lot of these non-profits, I believe, can't find directors, because anybody who understands the law knows there's an exposure here.

With that in mind, I asked them whether there was a possibility that we could bring in some sort of limitation of liability to reduce the exposure and reduce their insurance costs overall. At that point, they said, well, tune in on Thursday, because the legal team will be here. And here you are.

I'm very pleased to hear that you're looking at Saskatchewan's system. I'd like you to explain to us how that is going to help the non-profits reduce their overall costs and whether we could go even further. In my mind, I don't like to see non-profits tied up in any kind of legal environment.

I don't know which one of you wants to answer the question, but it's an open forum.

[David Stevens]

I'm just looking for the excerpt that the Saskatchewan legislation itself is in.

[A voice]

We don't excerpt it.