Throughout the past fiscal year, CPA Ontario was focused on our continuing digital transformation, implementing new processes and technology and building organizational infrastructure.

The investment in a digital and business transformation initiative, which began in earnest in fiscal 2018, accelerated in fiscal 2019. We launched the first phase of a new “My Portal” tool for members in November 2018. Subsequent phases, including a student portal, will be launched in early fiscal 2020. The new system will improve our service to members and students and boost our efficiency. In addition, we executed on the initial stages of the facility strategy that will see all our employees co-locate in fiscal 2020.

Our entire organization is making significant cultural and operational changes to ensure that our critical investments yield the greatest possible value for members, students, and other stakeholders and the long-term success of CPA Ontario.

The following discussion lays out the financial position, results of operations, and cash flows of CPA Ontario for the year ended March 31, 2019. This includes the key drivers of our revenues, expenses and investments. It should be read in conjunction with the summary audited financial statements and accompanying notes for the same period.


CPA Ontario’s net asset position remains strong at $66.8 million at March 31, 2019, as compared to $68.3 million in 2018. The $1.5 million reduction in net assets resulted from two factors:

  1. A $1.3 million deficiency of revenues over expenses, mainly due to technology implementation costs of our new Salesforce system, and costs associated with the facility strategy.
  2. $0.2 million net remeasurement losses from pension and employee future benefits.

CPA Ontario has net assets invested in land, buildings, equipment and other capital assets, as well as internally restricted and unrestricted net assets. We maintain an internally restricted operating reserve. It’s intended to support the organization’s day-to-day operations in the event of unforeseen shortfalls or special projects. In fiscal 2019, we increased the operating reserve by $2.0 million to $25.5 million.

During fiscal 2019, the net cash used in operating activities was $2.5 million and the net cash used in investing activities was $24.9 million. This compares to fiscal 2018, where the net cash provided by operating activities was $16.1 million and the net cash provided by investing activities was $11.0 million.

At March 31, 2019, the organization’s cash and cash equivalents totaled $1.8 million. That’s a decrease of $27.4 million from the balance of $29.2 million at the previous year end, as cash was shifted to long-term investments.

CPA Ontario believes that our current financial resources are sufficient to meet working capital and capital expenditure requirements for the next 12 months.

In fiscal 2019, our total capital expenditures were $0.6 million (compared to $1.2 million in fiscal 2018), of which $0.5 million related to information technology equipment and software.

Subsequent to year end, certain property comprising land and building was listed for sale. The property will be reclassified as asset held for sale, and recorded at the lower of its carrying value and estimated fair value less costs to sell. We expect to sell these assets within a twelve-month period.


CPA Ontario operations in fiscal 2019 resulted in a deficit of $1.3 million, compared to a surplus of $7.8 million in fiscal 2018.

For fiscal 2018, revenue from all sources surpassed $100 million for the first time in the organization’s history. We are pleased to report that revenue continued to grow in fiscal 2019, totalling $106.3 million (2018: $101.7 million). Our revenue came from three main sources: member dues and fees, education, and professional development. These categories delivered 95% of total revenue in fiscal 2019, the same proportion as in fiscal 2018.

Member dues and fees. CPA Ontario collected $46.4 million in dues and fees from our members in fiscal 2019, $1.1 million more than the $45.3 million collected in 2018. Member fees and dues represented 44% of the organization’s revenues (2018: 45%). There was no increase in provincial members dues in fiscal 2019, which remained at $580, as set in fiscal 2015 when dues were harmonized. The member population at March 31, 2019 is 92,814, an increase of 2,175 (2.4%) over the prior year.

Member dues and fees are the primary source of funding to enable CPA Ontario to fulfill our regulatory responsibilities. These include carrying out practice inspections, investigations, responding to complaints and working with the Public Accountants Council, among other roles that promote and protect the public trust.

Beyond regulation, CPA Ontario delivers a wide range of member services, including advising on ethical and regulatory matters, career services, networking opportunities and affinity programs.

Member dues and fees collected this year have also enabled CPA Ontario to continue to invest in technology and process improvements. These will enhance member and student experiences, enable improved professional development offerings and deliver economies of scale in the years ahead.

Education programs. Education program revenue and student dues totaled $42.6 million in fiscal 2019 (compared to $40.5 million in 2018). Of this total:

  • $28.3 million (2018: $25.5 million) came from the CPA preparatory course and the professional education program;
  • $0.2 million (2018: $0.5 million) came from other programs; and
  • $14.1 million (2018: $14.5 million) came from student dues.

Overall, students enrolled in 7,548 preparatory courses (compared to 7,120 in 2018) and 19,061 professional education program modules (2018: 17,417). The combined 8.4% increase in enrollment in the CPA programs represents the fourth straight year of growth. This continues to be a strong indicator of the relevance of our program offerings.

The contribution margin from CPA programs in fiscal 2019 is $8.6 million (30.4%), compared to $9.5 million (37.3%) in fiscal 2018. This decrease was driven mainly by higher delivery and support costs of the professional education program.

While student dues fell by $0.4 million this year, consider that the prior year included a $0.5 million one-time boost to revenue from the elimination of a fee subsidy related to a student magazine. The student population at March 31, 2019 stood at 21,598, very close to the prior year population of 21,547.

Professional Development (PD) programs. PD revenue increased by $0.3 million, from $11.3 million in fiscal 2018 to $11.6 million in fiscal 2019. This was driven mainly by higher registrations in seminars and executive programs, due to more courses being offered in fiscal 2019.

Expenses. Total expenses for fiscal 2019 were $107.6 million, up $13.7 million from $93.9 million in fiscal 2018. This increase is primarily due to higher expenses in four areas.

  1. Operations: Expenses increased mainly due to a higher spend in strategic areas, such as development and implementation of our new digital technology and execution of the facility strategy.
  2. Education programs: We saw higher enrolments in the CPA programs and served more students.
  3. Professional development: Expenses reflected a growth in registrations and investment in new learning content
  4. Professional standards: Expenses increased with more inspections performed and higher investigations costs

In the coming year, we expect higher expenses and capital expenditures as a result of completing key transformational initiatives and investments (now in progress), including the facility strategy to co-locate all our employees. We believe these initiatives and investments will yield an even stronger CPA Ontario, to the benefit of our members, students and all Ontarians.


Risks happen in the normal course of business. They can be heightened in complex environments and unusual circumstances. The ability to respond effectively and in a timely manner to both expected and unanticipated risk is critical to an organization’s success.

Enterprise Risk Management (ERM) is a crucial element of an organization’s strategic and tactical decision-making process and resulting actions. CPA Ontario places a priority on ERM. Here’s how.


Like many organizations, we are operating in a complex and rapidly changing environment. We face uncertainty, which can affect the implementation of our strategic and business plans. ERM supports the continued success of CPA Ontario by ensuring that we consider the effects of risk in pursuing our objectives. We regularly identify, assess, monitor and manage our risks to ensure that our top risks and emerging risks are considered within our risk appetite framework.

We embrace ERM by maintaining a program and framework that ensures that risk management is an integral part of the organization’s activities and management processes. The ERM program assists all areas of the business in managing risks within its risk appetite by bringing a systematic approach and methodology for evaluating, measuring, monitoring, managing, and reporting risks.

Our ERM framework is guided by the following key principles, under the leadership of the CPA Ontario Council and the Executive Team:

  • Governance and Oversight. Ensuring that we have the proper oversight on risk and that we make risk decisions within the framework of the organization’s risk appetite.
  • Infrastructure. Embedding the skills, tools and templates to enable risk identification, assessment and management.
  • Practices. Applying the ERM process for identifying, assessing, managing, monitoring and reporting key risks.

While Council and the Executive Team each has an important oversight role, employees at all levels in the organization are responsible for managing their day-to-day risks. Key risk management roles and responsibilities for the organization are described below:

  • Council: Council oversees the implementation and effectiveness of the organization’s ERM policy and framework, reviews key risks and mitigation strategies, and champions a culture that values the management of risk. Together with management, they also define the organization’s risk appetite, and reviews and approves it annually
  • CEO and COO: The CEO and COO act as Executive sponsors of the organization’s ERM framework to govern the organization’s risk profile and oversee management of enterprise-wide risks including key risks. They also champion a culture that instills the management of risk, support the integration of ERM with strategic management, decision making and business activities and processes, and cultivate open communication and transparency about risk and risk-taking expectations
  • Executive Team:The Executive Team is accountable for effective management of risks in their respective areas and ensures risk-taking is consistent with the organization’s risk appetite and also support the integration of ERM with strategic management, decision making and business activities and processes
  • Risk Owners: Risk owners apply decisions and activities that manage risk to acceptable levels and provide timely and accurate risk management information
  • All Employees: All employees manage risks within their functional area and reports emerging risks and changes in risks to management


A risk is an event that creates uncertainty in the achievement of objectives. Risk categories for CPA Ontario other than financial risks include brand and reputation risks, strategic (including regulatory) risks, operational risks, technology risks, and human capital risks. We face risks within these categories and have defined strategies to address them. Here are some risks we identified through our ERM process.

Future of the CPA profession. Like other professions, the accounting profession is experiencing unprecedented change resulting from factors such as new technology like artificial intelligence and machine learning, shifting demographics, evolving socio-economic perspectives and environmental issues. The profession faces risk if CPAs do not maintain the competencies and capabilities needed as the business environment evolves. We are working with the other CPA bodies across the country to plan for the future of the CPA profession and evolve core competencies. This includes updating the CPA Competency Map to enhance the foundation of the CPA certification program and ensure the relevancy of newly qualified CPAs.

CPA brand value proposition. There is risk that some stakeholders, including the public at large, do not perceive the significant value that CPAs bring to organizations across diverse industries. We are engaging in brand-building activities here in Ontario and across the country to enhance the profile of the profession and clearly communicate the value CPAs provide.

Cyber security. CPA Ontario faces the same information security risks that confront all organizations. Cyber risk is constantly evolving and on every organization’s radar given the potential impact whenever this type of risk materializes. CPA Ontario takes steps to protect member and student data from unauthorized access. We continually harden our systems to protect confidential information and reduce the likelihood of IT disruptions. We regularly educate, monitor and test our employees to encourage the use of appropriate cyber security practices. We also follow best-practice security processes, protocols and standards, and hold our third-party service providers and software partners to similarly rigorous security standards.

Technology transformation. CPA Ontario is implementing new IT systems that will modernize our digital footprint and transform foundational capabilities. Enhanced end-to-end online experiences and self-serve functionality will provide better services for all stakeholders. As with all complex IT projects, there are always risks, but we work to ensure that initiatives are appropriately delivered and implemented. We engage with appropriate best-in-class implementation partners and other service partners as well as use robust project management and monitoring as to ensure that initiatives meet their deliverables.

Workplace modernization. CPA Ontario is modernizing its workplace at 69 Bloor Street East to create a technology-enabled workplace of the future. This will protect the value of a key organizational asset, harness new ways of collaborating and provide modern services to our stakeholders. This will also allow us to consolidate our multiple locations as well as attract and retain top talent. This initiative, which includes a move to an interim leased office space over the next three to five years, comes with risk. To mitigate risk in this area, we are drawing on expertise in office planning and design to facilitate these moves and ensure that this multi-year initiative is accomplished smoothly and on budget.


In the normal course of business, CPA Ontario is exposed to certain financial risks. These have the potential to adversely affect our operating and financial performance. The risks associated with CPA Ontario’s financial instruments are: credit, liquidity and market (i.e. currency, interest rate, and other price risk).

CPA Ontario manages financial risks in accordance with internal policies, including our investment policy on managing our funds. The policy’s objectives are to:

  • safeguard our assets through prudent and diversified investments; and
  • ensure liquidity to meet cash flow requirements

The policy seeks to achieve these objectives by setting parameters for asset quality and for the proportions of fixed income and equity securities in which we invest. Council monitors compliance with the investment policy and reviews the policy on an annual basis to ensure it is relevant.

Given the nature of the organization’s investments, and the constraints imposed by the investment policy, it is management’s opinion that CPA Ontario is not exposed to significant risk in respect of financial instruments.

In addition, CPA Ontario has built a strong balance sheet through prudence in fiscal management. This serves to mitigate against economic contingencies.


Credit risk refers to the exposure resulting from the possibility that a counter party will fail to perform its obligations, or the exposure arising from a concentration of transactions carried out with the same party, such that CPA Ontario could incur a financial loss. Credit risk associated with accounts receivable is minimized as CPA Ontario’s accounts receivable arise mainly from transactions with many parties such as members, firms and CPA students, other provincial CPA bodies, building tenants, and contracted affinity product suppliers. Credit risk associated with investments is minimized substantially by ensuring that these assets are invested in financial instruments of governments and major corporations that have been accorded investment grade ratings by a primary rating agency and/or other credit-worthy parties.


Liquidity risk is the risk that CPA Ontario will not be able to meet a demand for cash or fund its obligations as they come due. CPA Ontario meets its liquidity requirements by ensuring sufficient cash and short-term investments are on hand at any given time that can readily be converted to cash to cover any expected and unexpected operating requirements.


Currency risk refers to the risk that the fair value of financial instruments or future cash flows associated with the instruments will fluctuate relative to the Canadian dollar due to changes in foreign exchange rates. CPA Ontario mitigates the currency risk exposure of its foreign cash, bonds and equities by limiting its currency exposure and investing mostly in Canadian securities.


Interest rate risk arises from fluctuations in interest rates and the degree of volatility of these rates. CPA Ontario is exposed to interest rate risk through holding certain investments, in which changes in interest rates can affect the valuation of the investment and the income received from the investment. CPA Ontario manages the interest rate risk exposure of its investments in guaranteed investment certificates and fixed income investments by using a portfolio with varying terms and maturity dates, which helps to reduce the sensitivity of the portfolio to the impact of interest rate fluctuations while enhancing the average portfolio yield.


Other price risk refers to the risk that the fair value of financial instruments or future cash flows associated with the instruments will fluctuate because of changes in market prices (other than those arising from currency risk or interest rate risk), whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all similar instruments traded in the market. CPA Ontario has an investment policy that restricts the types and amounts of its eligible investments and requires dealing with highly rated counterparties. Diversification of investments in different geographic regions and the use of different investment vehicles help to manage price risk and volatility of investment returns.


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A copy of the complete audited financial statements is kept on file at Chartered Professional Accountants of Ontario and can be provided upon request by contacting [email protected].