Memo to the Prime Minister 

Perspective

Memo to the Prime Minister

FROM: MAR-APR 2004 ISSUE | BY JOHN NAGY, FCGA — CHAIR, CGA-CANADA

It's been some months now since Paul Martin became Prime Minister of Canada. As we all know, it's a job he's aspired to for many years. So now that he's finally installed in the Langevin Building, he has a chance to show us if indeed he has "the right stuff." To help orient the Prime Minister as he establishes his priorities, CGA-Canada recently sent him a memo, outlining our main concerns as a national professional accounting body.

First off, congratulations were definitely in order and are certainly well deserved. Mr. Martin has a tremendous track record as a prudent and responsible fiscal leader. As we all know, he wrestled the Canadian deficit to the ground, and for that feat of determination he will always have our respect.

But there are some pressing new issues on the horizon that we think deserve Mr. Martin'sundi­vided attention. Our recent memo laid out four general areas:

• Interprovincial trade
• Institutional reform
• Tax reform
• Improved government finances.

On the subject of improving trade among Canadian provinces, we told the PM we fully support the formation of the new Council of the Federation as promoted by the provincial Premiers with its goal of strengthening the Canadian economic union.

As we see it, the Canadian federation can be even stronger by encouraging freer trade between provinces in goods and services. This will be good for business and good for consumers. And that, of course, includes the realization of full professional mobility rights for CGAs everywhere in Canada.

On the matter of institutional reform, we focused on the need to improve the accounting standards setting structures in Canada, by moving away from direct control of the process by one sector of the accounting profession. Here we echoed a recent recommendation from the Senate Committee on Banking Trade and Commerce. It was time, we thought, to remind the PM that Canada is one of the few developed economies where accounting standards setters reside directly inside the profession. Changing the current structure will be essential to restoring confidence in capital markets in the post-Enron era.

When it comes to the issue of tax reform, the PM is no stranger to this issue. So how, we asked, can the tax system be made more fair, simple, and responsive to the needs of business? The impact of tax policy on investment, productivity, and innovation is well documented. However, current tax structures are often inefficient, and fall short of achieving stated policy objectives.

And finally, we spoke about improved government finances and the need for greater transparency and accountability. Recently we recommended to Ottawa that they put in place a permanent system to review government spending programs and priorities. And we said government managers must be regularly challenged to justify their spending of Canadians' hard-earned tax dollars. The Cabinet's new Committee on Expenditure Review is a good start. We also encourage that committee to regularly report out to Canadians through publications and other means.

As we said in our conclusion, these proposals are reasonable. Moreover, they are achievable. Now it's up to the new PM to deliver. We're keeping track, and keeping in touch. And we will report back on progress made.

Within the next few months, the Prime Minister will be out on the hustings seeking a mandate from Canadians. We know that CGAs across the country will want to raise these issues with Mr. Martin and his team.

To view the full text of our recent memo to the Prime Minister visit CGA-Canada's Web site at www.cga-canada.org.

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