News from CGA-Canada 

News from CGA-Canada

• Change to Education Tax Credit Highlights Federal Budget
• Luncheon Series Concludes After Eventful Season
• Former CGA-Canada Chair Named to IFAC Permanent SMP Task Force
• CGA-Canada Welcomes Parliamentarians
• CGA-Canada Board Hears from CPAB CEO
• Association Supports Study of Investor Activism

FROM: MAY-JUN 2004 ISSUE

CGA-Canada welcomed a change to the federal Education Tax Credit announced in Finance MinisterRalph Goodale's first federal budget on March 23. The change allows students to claim the costs of education programs related to current employment when those costs are not reimbursed by the employers. As a result, students enrolled in the CGA Program of Professional Studies will be able to claim the tax credit.

The change is a significant victory for CGA-Canada, which has long argued for it. As part of the Association's pre-budget submission this year, CGA-Canada enlisted the support of six other professional associations to bolster its position on this issue.

"The change to the Education Tax Credit is very positive news for students in the CGA program," said CGA-Canada President and CEO Anthony Ariganello, CGA. "The change will also benefit students in many other professional fields and will help to further the government's previously stated desire to encourage lifelong learning."

The Association also endorsed Goodale's move to re-introduce the office of Comptroller General of Canada. Under the measures, professionally accredited comptrollers will sign off on all new spending initiatives in every government department. "We view this as a positive step toward improving the government's overall financial management and accountability," said Chair John Nagy, FCGA.

The Association's budget response did include a cautionary note, however, pointing out that the government's spending plans are greater than projected economic growth rates. The budget projects Canada's economy will grow by 2.7 per cent in 2004 and 3.3 per cent in 2005. In the same period, however, federal expenditures will grow by 7.6 per cent and 4.4 per cent respectively.

CGA-Canada provides in-depth analysis and commentary on the federal budget as a component of its national advocacy role. A news release, scorecard, highlight document, and tax highlight document were posted on the CGA-Canada Web site and distributed to national media. A newsletter for practitioners was also produced for members.

As in past years, CGA-Canada's budget response team attended the budget lock-up to analyze the budget documents and prepare the Association's response. The Association's budget response team included Everett Colby, FCGA, Bob Harvey, FCGA, and Gisèle Prévost, LL.M. (tax), CGA, members of the Tax and Fiscal Policy Committee. They were joined by Vice-President of Public Affairs Barbara Cameron and Assistant Vice-President of Government and Regulatory Affairs Carole Presseault. Colby also served as an expert commentator for Global television's budget coverage.

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The 2003-04 season of Economic News Luncheons, hosted by CGA-Canada's Ottawa office, reflected a year of changes on the political, regulatory, and economic fronts.

Six luncheons were held in Ottawa between September and March. The series is presented by CGA-Canada and the National Press Club of Canada to stimulate discussion on economic issues of national importance. The series concluded March 10 with Steve Hindle, President of the Professional Institute of the Public Service of Canada, who spoke about public service renewal and reform.

Harold MacKay, Vice-Chair of the federal government's Wise Persons' Committee into securities regulation, spoke in February about the committee's recommendation that a national securities regulator should be created. In January, Don Drummond, Senior Vice-President and Chief Economist of the TD Bank Financial Group, presented his predictions for the federal budget and outlined the challenges facing Finance MinisterRalph Goodale.

Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce, laid out a blueprint for Prime MinisterPaul Martin's government at a luncheon presentation in November. Anne Golden, President and CEO of the Conference Board of Canada, presented the key findings of their annual Performance and Potential Report in October. Luc Bertrand, President and CEO of the Montreal Exchange, kicked off the luncheon season in September with a speech touching on the development status of the Montreal Exchange, the national regulatory debate, and governance issues.

The luncheons, held at the National Press Club, raise the Association's profile in Ottawa and attract a broad audience of government officials, politicians, national media, and business leaders. Information on all luncheon presentations is available on the CGA-Canada Web site.

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Dale Gislason, FCGA, has been appointed to the newly established Small and Medium Practices (SMP) Permanent Task Force of the International Federation of Accountants (IFAC). Gislason, who chaired the CGA-Canada Board of Directors in 2001-02, was one of 11 members named to the task force at the IFAC Board meeting in Jaipur, India, in March.

The task force was formed to address the unique concerns of SMPs and to give the SMP sector more input into the development of the accounting profession. IFAC initially created a working party in 2000 and then a task force in 2001 with a two-year mandate to identify the needs of SMPs. The task force issued a report in June 2003 that identified four operational issues particular to SMPs:

• lack of specialist resources,
• competition from "non-qualified" accountants and other sources,
• cost of compliance and lack of representation, and
• formulation of accounting and auditing standards.

Gislason, of Winkler, Manitoba, will serve a two-year term on the task force, which will be chaired by Angelo Casò of Italy.

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CGA-Canada President and CEO Anthony Ariganello greets Member of Parliament Wilfert Bryon(Oak Ridges, Ontario) at the Association's "Welcome Back" reception. Held at the Rideau Club in February, the reception attracted more than 100 people including Members of Parliament and Senators to kick off the third session of the 37 ^thParliament. It was held in conjunction with the issuing of an open memo to Prime MinisterPaul Martin (see " News from CGA", March-April 2004, CGA Magazine) outlining the four finance related priorities the Association wishes to see addressed in the coming year.

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David Scott, Chief Executive Officer of the Canadian Public Accountability Board (CPAB), addressed the CGA-Canada Board of Directors at its March meeting to present the structure and rationale of the CPAB organization. CGA-Canada board members questioned Scott on the transparency and inclusiveness of the current CPAB structure. There was also discussion about how CGA would be involved in the governance of the organization.

CGA-Canada has been critical of CPAB's structure since it was created in 2002 to oversee the auditing of public companies. Following Scott's presentation, the Board agreed to work with CPAB as it continues to evolve, while continuing to raise issues of concern regarding a lack of transparency, inclusiveness and independence.

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CGA-Canada is a sponsor of a study by the Public Policy Forum into the trend of institutional investor activism and the implications for market confidence and public policy.

There have been a number of examples in recent months of institutional investors and other shareholder activists exercising their power over corporate boards that they believe have not acted in the best interest of shareholders (see this month's Perspectives column). The Public Policy Forum study will examine this trend from a Canadian perspective and question whether it might lead to new corporate governance reforms. The research will include interviews with a broad range of stakeholders, a roundtable process and a final report.

The Public Policy Forum is a neutral, independent Ottawa-based forum for open dialogue on public policy issues.

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