As we covered last time, CPA Ontario and CPA Quebec announced that they intend to conclude their current arrangements with CPA Canada.

Since that last post, we have a little (not enough, but a little) more clarity on some of the underlying issues, in particular from a Globe and Mail article, none of which is likely to make anyone feel better about any of it. The situation made me think of how the unprecedently transgressive behaviour of someone like Trump exposes how our governing systems are often more fragile than we realize, depending on unstable norms and conventions which a strong-willed participant might simply choose to discard,. Not that I’d spent any time considering it before the blow-up, but I suppose I implicitly viewed CPA Canada as the main Canadian accounting body and the provincial bodies as a sort of administrative and regulatory adjunct; I imagine many others had the same general impression. The current situation exposes how wrong that was, how CPA Canada in fact has surprisingly limited power, once the provinces decide to start squeezing it (CPA Canada issued an FAQ document that reads like a hostage’s plaintive plea for mercy). It’s a brilliant, ruthless power play by the provinces, but one which carries a whiff of the sociopath, brutalizing the  profession’s overall standing for the sake of supposedly saving it.

Here’s an example of the issues, as reported by the Globe and Mail:

• the chairs of the Ontario and Quebec groups, Jean Desgagné and Mario Gariépy, said the four principal issues in the discussions (with CPA Canada) included a “need for structural governance changes” in the organization and “direct oversight of the profession” by the provincial and territorial bodies, or “PTBs.”
• One of their concerns, they said, was CPA Canada’s “insistence on testing our proposed governance framework with ‘key stakeholders’ ” and the PTBs’ member CPAs. To consult individual chartered accounts would “reject the PTBs as the voice of the profession.”
• In a “term sheet” attached to the letter, Ontario and Quebec included a “preamble” that said “the PTBs are solely accountable for the profession.”
• “There is no national profession and no legislative requirement for national co-ordination,” the preamble read. “Any such co-ordination is the choice of the PTBs in their judgment as to how to fulfil their mission and mandate.”

That may be true as a structural matter, but when the intention is to announce a summary withdrawal from CPA Canada altogether, it’s an astoundingly arrogant position (see my earlier remark about grudge-driven personal fiefdoms). Equally startling is the proposal “for the elimination of membership for individual CPAs, making the PTBs the only members of CPA Canada.” The intention seems to be to dilute the standing and visibility of CPA Canada, turning it into a largely unseen workhorse that generates what its provincial masters ask of it, and maybe not much more. No wonder that the article quotes CPA Canada’s CEO Pamela Steer as saying: “I’m really disappointed in my profession.”

In any event, governance matters generally only become urgent when the status quo is preventing a key constituency from fulfilling its objectives, and CPA Ontario and Quebec have yet to provide any clarity on what they’ll actually do, if handed all the authority and control they’re asking for, or alternatively, if they end up exiting the current arrangement. CPA Ontario’s original email promised “a significant cost reduction reflected in your annual membership dues” – presumably they have some concept then of how that would be achieved. Is the idea that much of what’s currently done by CPA Canada could be done provincially, with no loss in quality but at much less cost (see my earlier evocation of Brexit)? Is the idea that under a revised arrangement, CPA Ontario and Quebec would continue to proportionally fund some of CPA Canada’s activities, the ones that everyone would otherwise miss, but not the others – if so, shouldn’t we be given some sense of what goes into which group? It’s more than unfortunate that Canada put its dysfunction on display just days before the ISSB issued its first two standards, but is it that just a coincidence, or is Canadian Accountant right in implying that the money being spent by CPA Canada on sustainability matters plays some part in this? It reported that a new Canadian Sustainability Standards Board is expected to cost about $10 million, a hefty-sounding sum given all the work already done by the ISSB, and that the decision on whether to adopt those standards for public entities in Canada lies in the hands of the securities commissions. Whatever the answer, CPA Ontario and CPA Quebec should move beyond boardroom abstractions, to tell us tangibly what CPA Canada is doing wrong, and how they propose to do it better.

The initial CPA Canada statement advised “(working) with a world-class conciliator to guide future deliberations,” no doubt reflecting that we’re looking here at a world-class shitshow. My own sense though is that a better way forward lies with organic, practical, reconciliation-minded discussion within the profession. Whether the current leaders of the organizations are capable of that…well, that’s another thing on which we lack sufficient information…

The opinions expressed are solely those of the author.