Bill 213

The purposes of this guide are: 1) To provide background information about Bill 213 which was recently passed by the Ontario Legislative Assembly and 2) to record some of the information related to the bill that is found in newspaper advertisements  sponsored by various interested parties. It is not often that accounting issues engender such passion and since the issues involve a widespread reform of accounting standards it is thought that a summation of the arguments is worth providing. This is particularly the case since some of those arguments were presented in advertisements that are likely to be difficult to find in electronic versions of the newspapers in which they were placed. As well, the related position papers of the various accounting bodies that are now found in electronic form on their web sites, may be merely ‘broken links’ in the future.

The Bill

Bill 213 is known officially as the Justice Law Amendment Act, 2002. Although opponents argue that the Bill was passed too quickly with too little public debate, it was preceded by two independent investigations: 1) The Ontario Red Tape Commission and 2) a panel constituted under the “Agreement on Internal Trade’ which basically argued that the existing accounting standards unjustifiably restricted labour mobility. The Bill received first reading on November 26, 2002 and was given Royal Assent on December  9, 2002.

The Bill basically opens the door to the profession of public accounting for members of  professional bodies previously denied entrance and “effectively ends the 40-year monopoly of the Institute of Chartered Accountants of Ontario over admissions to licensed public accounting.”  It is our interpretation, however, that exactly how far the door will be opened will only be determined when the findings of the government-appointed accounting regulatory reform project are known. That project, headed by Dean Ronald Daniels of the University of Toronto Faculty of Law, is scheduled to release a report at the end of March 2003.

The Protagonists

       Proponents of Bill 213

The 55,000 Certified General Accountants (CGAs) and  43,000 Certified Management Accountants (CMAs) were in favour of the new legislation. They argued that the old, prescriptive rules-based approach encouraged an audit-only mentality that was too heavily based on compliance. The new principles-based approach is more likely to encourage initiative and attract new recruits to the profession, they argue. Examples of their arguments are found in the following releases:

“Different is Not Better: Canada’s Failure to Fully Adopt the IFAC Principles-Based Approach to Auditor independence will Not Restore Investor Confidence,” Canadian Newswire, October 30, 2002.

“CGA Ontario Applauds Eves Government Accounting Reforms: Consumers, Investors, Small Business Protected by Higher Standards and Modernized Licensing System,” Canadian NewsWire, October 30, 2002.

“Another Crucial Step in Eves Government Accounting Overhaul: CGA Welcomes the Justice Statute Law Amendment Act, 2002, Introduced Today: The Result: Higher Standards, More Choice for Consumers,” Canadian NewsWire, November 26, 2002.

“Certified General Accountants of Ontario Welcomes Passage of the Justice Statute Law Amendment Act, 2002, Canadian NewsWire, Dec. 5, 2002.

On November 6, 2003 a special supplement was issued with The Globe and Mail. The title is "Focus on CGAs" and it included  articles relating to Bill 213 from the perspective of the CGA organization. Their web site is found at www.cga-ontario.org.

      Opponents of Bill 213

The 33,000 members of the Institute of Chartered Accountants of Ontario were opposed and felt that Bill 213 represented a fine example of bad public policy. It was their position that it was a mistake to open access to the profession before the standards had been defined. For examples of arguments, see the following releases:

“P.C. Bill Lowers Public Accounting Standards: Ontario CAs”, Canadian Newswire, November 26, 2002.

Advertising Related to Bill 213

At this time (cFeb.2003), information about the debate from the partisans in the debate is found on the web sites of each accounting body. The ICAO, in particular presents detailed arguments at www.icao.on.ca. Apart from a “Brief History of Events Leading to Bill 213” they offer a 19 page FAQ section that is very useful and a “Statement on the Passage of Bill 213”. We are not sure how long information will remain at those links. We are more certain that the information presented by the various bodies in advertisement will be difficult to find electronically in the future since most online versions of newspapers do not include facsimiles of advertisements. For that reason, some of the ads have been transcribed and are presented below.

       CGA
“Good News, Good Business, Good Government: Ernie Eves and His Government Raising Accounting Standards,” The Globe and Mail, Wed. Dec. 4, 2002, A18.

“Bill 213 is a Good Step to Restoring Investor Confidence in Ontario,” National Post, Dec.12, 2002, A6.

       CMA
“Our Standards are Second to None,” The Globe and Mail, Dec.17, 2002.

       ICAO
“The Ontario Government is Finally Doing Something About Public Accounting Standards. “It’s Lowering Them",” Financial Post, Tues. Dec. 3, 2002
This ad consists of a letter from Brian Hunt, President and CEO of the ICAO, to “Concerned Ontarians”. The same advertisement is found in The Globe and Mail, on Wed. Dec. 4, on page A9.

“The Ontario Government’s Bill 213 Would Lower Public Accounting Standards: U.S. Regulators are Concerned,” The Globe and Mail, Dec. 4, 2002, p.A11.
This ad contains a letter to the Premier from NASBA (the National Association of State Boards of Accountancy in the U.S.) indicating a concern about changes in the qualification standards in Ontario.

Conclusion

There are likely to be more comments and articles about this legislation – especially when the recommendations of Dean Daniels are made available. For a recent account see: “Ontario CAs Count on Keeping Alive Standards Debate,’ Terrence Belford, The Globe and Mail, Dec. 9, 2002, p.B11. Some international reactions are also already in: “Professional Services – Canadians Overturn Accountancy Rules,” Mark Fenton-Jones, Australian Financial Review, Jan. 31, 2003. See also: "Ontario Introduces Self-Regulatory System That is 'Second to None'," The Accountant, Oct.31, 2003

Most of the sources cited here are found on Factiva – with the exception of the ads which were clipped from the original print publications. For assistance in researching this subject, consult with a staff member in the Business Library.

Business Library Staff
Feb. 2003 - updated in November 2003.
buslib@ivey.uwo.ca