Is Canada still a land of opportunity for CAs?

Pettigrew, Fukakusa, Colella
robert-outram By Robert Outram, CA Magazine

4 May 2016

ICAS recently met with leading figures in Canada to discuss the fall in oil prices and the global financial crisis. Robert Outram reports on whether the country has retained its appeal for CAs.

Canada was one of the few developed economies that came through the global financial crisis relatively unscathed.

Now, however, the fall in the oil price has hit Canadian GDP and its newly elected Liberal government is facing a deficit three times as big as previously estimated. How resilient is the Canadian economy and what are the opportunities looking like in a country that has historically been a magnet for ambitious CAs?

The CA magazine, with the kind support of the Royal Bank of Canada (RBC), brought together a panel of leading figures to discuss these questions at the RBC headquarters in Toronto, chaired by ICAS president Jim Pettigrew.

The first topic was the Canadian economy. Craig Wright, RBC’s chief economist, noted: “A lot of the challenges that Canada faces originate from outside our borders. With the recent falls in stock markets around the world, we are seeing fear overtaking fundamentals. The risk is that, even though the fundamentals may be strong, eventually the fear could itself become a fundamental.”

Wright also said that the world is experiencing an unprecedented, sustained period of low interest rates and there is no existing template for how to exit from this situation.

He added that there were, in his view, limits to what low or even negative interest rates could achieve: “We’ve asked monetary authorities to do a lot of the heavy lifting, but there’s a limit to what they can do. Monetary policy is meant to smooth out the economic cycle, not to reverse it. So, I think monetary policy is doing the best it can, but now it’s over to economic policy and/or fiscal policy.”

Anton Colella

Resilient banking

As Craig Wright pointed out, while the falling oil price has had a negative effect on Canadian GDP and employment, there is also a boost to exports resulting from an accompanying fall in the Canadian dollar.  Stronger US growth and a more competitive currency will help lift exports, he said, offsetting the weakness in investment as energy activity slows. Consumer spending will move in line with income growth, as consumer debt in Canada is running at elevated levels..

Janice Fukakusa, chief financial officer and chief administrative officer with RBC, commented that the Canadian banks have so far seen either continuing growth or flat earnings rather than significantly reduced earnings, adding: “It speaks to the diversification of Canadian banks, how they make decisions and the conservatism that is built into the system.”

She also pointed out that RBC’s exposure to the oil and gas sector, for example, is much less than the energy sector’s share of the economy might suggest.

The Canadian banks report under IFRS – in contrast with US banks – and, Fukakusa said, the difference in approach to provisioning for losses under IFRS requires some explanation for many investors.

Anton Colella, ICAS Chief Executive, said that his conversations with ICAS members in Vancouver, Calgary and Toronto highlighted the varying fortunes of the different areas of Canada. As he put it: “We had three groups of accountants giving three different narratives.”

Neil Blair CA, a corporate finance partner with KPMG in Toronto, said regional economic factors were definitely affecting the accountancy firms and their clients: “Firms are struggling in areas like Alberta, while in Ontario we’re seeing a booming mid-market M&A sector.”

He added that US private equity firms are currently very interested in acquiring Canadian assets, hoping to make the most of the exchange rate, but agreeing a price with vendors, given the volatility of forex, was a challenge. As he put it: “It’s interesting times for us.”

Accounting opportunities

Is Canada still a land of opportunity for CAs? Joy Thomas is incoming CEO and president of CPA Canada – the recently unified body representing Canadian accounting professionals – and at the time of the round-table event she was preparing to succeed outgoing CEO and president Kevin Dancey.

She said: “It’s a great time for the accounting profession because the competency set that accountants have is so relevant in such a complex and volatile world: technical expertise, strategic management, strategic leadership; those are fundamental for us. Layered onto that are the enabling skills of leadership, communication, moral judgement, decision-making, all grounded with an ethical base.”

Kevin Dancey said that thanks to demographic factors, in the near future immigration will be Canada’s only source of population growth.

He added: “Immigration is not always coming from the same countries as it used to. There were waves from Europe through the last century and now there is immigration from different parts of the world, especially Asia. But ICAS CAs will always be welcome!”

A CA who has been in Canada since 1982, James Waddell is chair of the ICAS community in Ontario and chief internal auditor of the TMX Group, which operates the Toronto Stock Exchange and other exchanges. He said the skills he is hiring for include the “soft skills” of perception and communication, as well as technical knowledge.James Waddell CA

He explained: “There are people who would like to keep internal audit focused on the low-level aspects of internal control…but business failure does not lie there, it lies in the lack of co-ordination of objectives, or in taking unnecessary risks because remuneration systems are not aligned with objectives, and so on.

“My challenge is bringing qualified people into internal audit who can see the big picture, individuals who will talk to people in the business, use their peripheral vision and not just focus on the minutiae.”


The panel also discussed access to the accountancy profession, noting the parallels between the ICAS Foundation’s programme of support and mentoring for students from deprived backgrounds and CPA Canada’s initiative to encourage the development of financial skills among the First Nations – the descendants of the original spre-European peoples of Canada.

CPA Canada also has a volunteer programme that trains its members to go into high schools to help develop financial literacy. Joy Thomas said: “They become ambassadors for the profession. Your pride as a professional accountant should be about the impact that you have on society.”

Diversity within accountancy and business is a key concern for the professional bodies on both sides of the Atlantic. Janice Fukakusa said: “Diversity and inclusion are core values within RBC. Our focused diversity programme is in its fifteenth year, but you must keep paying attention to the metrics to chart your progress.”

Jim Pettigrew CAShe added that the bank is looking at whether working practices sometimes discourage women from aiming for senior positions. In addition, they have taken opportunities to adapt working hours and the timing of meetings, to ensure that they are feasible for working parents.

Summing up, Jim Pettigrew CA said that he and his colleagues at ICAS have “enormous respect” for their Canadian counterparts and that, in terms of weathering the current economic storms: “If anyone is going to see their way through in a sensible, measured, prudent and thoughtful way, it is Canada.”

The full version of this article appears in the May 2016 edition of CA magazine.

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