CPA Ontario operations in fiscal 2017 resulted in a surplus of $15.5 million compared to a deficit of $4.4 million in fiscal 2016. The significant improvement in financial results is due to membership growth, robust growth of enrolments in CPA programs, student fees from new students, a focus on managing costs, and the absence of integration costs. These factors helped CPA Ontario absorb the loss of $7.6 million in contribution margin from legacy education programs in fiscal 2017, as the phase-out of these legacy programs was completed in fiscal 2016.
Total revenues of $97.1 million in fiscal 2017 (2016: $91.8 million) was derived from three main sources: member dues and fees, education, and professional development. These three revenue sources represent 96% of total revenues in fiscal 2017 (2016: 96%).
Member dues and fees. CPA Ontario collected $46.3 million in dues and fees from members in fiscal 2017 (2016: $40.8 million), representing 48% of CPA Ontario’s revenues (2016: 44%). Member dues and fees provide funding for CPA Ontario’s regulatory functions related to protecting the public trust, such as practice inspections; investigations and responses to complaints; and activities related to the Public Accountants Council for the Province of Ontario. In addition to our regulatory role, CPA Ontario delivers a wide range of member services, including ethics counseling, career services, networking opportunities, and affinity programs. Member dues and fees also help enable CPA Ontario to invest in technology and process improvements to enhance the member and student experience, and to deliver economies of scale in the years ahead.
Education programs. Education program revenue and student fees totalled $35.8 million (2016: $37.2 million), of which $22.3 million (2016: $12.9 million) was revenue from the CPA preparatory course and the professional education program; nil (2016: $17.1 million) was from legacy education programs, and $13.5 million (2016: $7.2 million) was from student fees. Revenue from legacy education programs ceased in the prior year as the phase-out of legacy programs was completed.
This year our education team focused on ramping up new CPA program registrations and on helping legacy students complete their transition into the CPA preparatory course and the professional education program. Overall, students enrolled in 8,949 preparatory courses (2016: 6,328) and 15,543 professional education program modules (2016: 9,550). The contribution margin from CPA programs in fiscal 2017 is $7.6 million, or 34.2% (2016: $4.3 million, or 33.6%). The significant increase in contribution margin dollars is due to higher enrolment in both CPA preparatory courses and the professional education program.
The increase of $6.3 million in student fees this year is due to two main factors. First, in fiscal 2017 all CPA Ontario students had to pay a full student fee, whereas in the prior year some students benefited from a fee holiday during the unification period. Second, the harmonization of the student fee rate resulted in a significant increase in student fee revenues from a segment of the student population.
Professional Development (PD) programs. PD revenue increased by $0.8 million, from $10.1 million in fiscal 2016 to $10.9 million in fiscal 2017. The increase in revenue was driven by new emerging channels of delivery, including webinars and seminar broadcasts, and higher affinity program sponsorship revenue from a new affinity partner contract.
Expenses. Total expenses for fiscal 2017 were $81.6 million compared to $96.3 million in fiscal 2016. The prior year included $14.4 million in one-time integration-related expenses. Therefore, expenses related to ongoing operations were slightly lower in fiscal 2017 compared to the prior year ($81.6 million vs. $81.9 million). These expenses include spending on regulatory work, the delivery of education and professional development programs, member counseling and support services, and the promotion of the CPA brand to students, employers, government and the public. Expenses in fiscal 2017 also included new spending in strategic areas, member research, risk management, and technology investments. Economies of scale were achieved in fiscal 2017 as lower expenses from operations supported higher revenues.