peter norwood, fca · beyond numbers is printed in british columbia and mailed eight times annually...

Supporting good public policyCPD deadline: Are you ready?Update on CA training in industryResidency status of foreign affiliates

In this issuePeter Norwood, FCA, brings apassion for education to the ICABC presidency + meet your 2010/2011 Council

On the Cover

September 2010

Peter Norwood, FCAYour 2010/2011 president

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Peter G. Lambb.a., clu, tep,

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Garry Zlotnikf.c.a., b.comm., cfp, clu, ch.f.c

Martin Zlotnikb.comm., ll.b

Mark A. Zlotnikc.a., clu

P.M (Pip) Steeleb.comm., cfp, clu,

ch.f.c.

Robert E. Olsonb.a.

H.G. (Howie) Young

cfp

Bruce K. Bergerb.a., cfp

W.A. (Bill) Finlayb.a., c.a.

Lynn NewsomeKen McNaughtoncfp, clu, ch.f.c.,

rhu, csa

Ross Gibsondipt.t

John V.R. Warkb.comm., c.a, cfp,

clu, ch.f.c

Amin E. Jamala.c.i.i., clu, tep

Michael A. Healeyb.a., cfp, rhu

John McKeachie

Carrie Lyleb.comm., mba,

cma, cim

Heidi U. Pullemcfp, cdfa

Matthew W.P. Anthonyb.a., cfp

Aeronn Zlotnikb.a.

Nancy Pereiragba.

Philip Levinsonc.a.

Daryl Kingb.sc., flmi

Peter Walmsleyepc

Trent Gurneycsa.

Jack Shaffercfp, clu, ch.f.c

Steven Koub.comm, b.sc., cga

September 2010 ica.bc.ca 3

contents

8

On the Cover

Meet Your New President+ Council 2010/2011

4 Notes from the CEO Supporting good public policy

6 For the Profession Furthering the profession’s

growth

20 Tax Traps & Tips Residency – mind and

management

22 PD News Fall PD highlights

24 Plugged In News for and about members

& students Member announcements AGM minutes PRL notice ICABC Social Networking

Group event Photos from the Member

Recognition dinner Nominate a peer for

Fellowship

34 Ethical Dilemmas The perils of blind faith

12CPD Deadline – Are You Ready? + How Member Services

can help you meet the

requirements

16Update on CA Training Offices in Industry Four EEO CATOs in industry

weigh in on the experience

so far + CASB launches new

portal for results release

10%

Cert no. SCS-COC-000648

ZLC Financial Group offers a wide-range of customized and innovative solutions to help grow, protect, and perserve your wealth.

For more information, contact our associates on: Vancouver 1200 Park Place, 666 Burrard St | Vancouver BC | V6C 2X8

Tel 604 688 7208 | Fax 604 688 7268 | Toll Free 1.800.663.1499

Victoria 3711 Grange Road | Victoria BC | V8Z 4S9Tel: 250.727.3445 | Fax: 250.479.9716 | Toll Free 1.800.906.5666

www.zlc.net

Your team of experts in Insurance & Retirement | Employee Benefits

Private Investment Management | Structured Settlements

Peter G. Lambb.a., clu, tep,

epc, csa

Garry Zlotnikf.c.a., b.comm., cfp, clu, ch.f.c

Martin Zlotnikb.comm., ll.b

Mark A. Zlotnikc.a., clu

P.M (Pip) Steeleb.comm., cfp, clu,

ch.f.c.

Robert E. Olsonb.a.

H.G. (Howie) Young

cfp

Bruce K. Bergerb.a., cfp

W.A. (Bill) Finlayb.a., c.a.

Lynn NewsomeKen McNaughtoncfp, clu, ch.f.c.,

rhu, csa

Ross Gibsondipt.t

John V.R. Warkb.comm., c.a, cfp,

clu, ch.f.c

Amin E. Jamala.c.i.i., clu, tep

Michael A. Healeyb.a., cfp, rhu

John McKeachie

Carrie Lyleb.comm., mba,

cma, cim

Heidi U. Pullemcfp, cdfa

Matthew W.P. Anthonyb.a., cfp

Aeronn Zlotnikb.a.

Nancy Pereiragba.

Philip Levinsonc.a.

Daryl Kingb.sc., flmi

Peter Walmsleyepc

Trent Gurneycsa.

Jack Shaffercfp, clu, ch.f.c

Steven Koub.comm, b.sc., cga

4 ica.bc.ca September 2010

September 2010, No.489

Published eight times annually by the Institute of Chartered Accountants

of British Columbia.

EditorMichelle McRae

Design Blindfolio Design

604-761-9212

AdvertisingAdvertising In PrintPhone: 604-681-1811Fax: 604-681-0456

Senior Director of External AffairsLesley MacGregor

Institute CouncilPeter R. Norwood, FCA

President

Lenard F. Boggio, FCA1st Vice-President

Gordon Holloway, FCA2nd Vice-President

Michael Macdonell, CATreasurer

Olin Anton, CAJohn (Jack) Arnold, CA

Linda Lee Brougham, CAKyman Chan, CA

Karen Christiansen, CAJohn Crawford, CA

Andrew (Sandy) Hilton, CADavid Hughes

Sheila Nelson, CAJohn Sims, FCAKenneth Tung

Praveen Vohora, CAEric Watt, CA

Chief Executive OfficerRichard Rees, FCA

Beyond Numbers is printed in British Columbia and

mailed eight times annually to more than 8,300

chartered accountants and more than 1,500 CA students

in public practice, industry, education, and government

service throughout BC, Canada, and other countries.

Beyond Numbers’ editorial and business offices

are located at:

Suite 500, One Bentall Centre, 505 Burrard St., Box 22

Vancouver, BC V7X 1M4

Phone: 604-681-3264

Toll-free in BC: 1-800-663-2677

Fax: 604-681-1523

Internet: www.ica.bc.ca

Opinions expressed are not necessarily

endorsed by the Institute.

Beyond Numbers supports the CA profession in BC

by sharing news from the Institute and news about

members, by sharing viewpoints on issues of specific

interest to members, and by promoting member

involvement in Institute activities.

Publications Mail Agreement No: 40062742

For the past eight years, the Institute and other leading business and industry associations have called on the provincial government to harmonize the provincial sales tax with the GST. Why? Because it’s smart tax policy. In our annual budget submissions, we have detailed the benefits that a harmonized sales tax (HST) would bring to our tax system and our economy. So last summer, when the government announced its intention to dismantle the antiquated provincial sales tax and replace it with the HST, the Institute applauded.Since that time, there has been considerable fallout. Over the past several

months, it has been impossible to avoid the controversy and public dissatisfaction surrounding the implementation of the HST. In fact, this has arguably become the most politicized public policy initiative in recent memory. Fuelling the flames, the anti-HST initiative has allowed for a one-sided and often misleading discussion that focused on the circumstances surrounding the introduction of the new tax, rather than on the pros and cons of an HST tax regime. As a result, there is a chance that the proverbial baby is about to get thrown out with the bathwater.For this reason, the Institute has joined the Smart Tax Alliance (STA), a group

comprised of more than 30 organizations, representing over 800,000 workers in BC. Over the coming months, the STA will actively advocate for the HST to better inform British Columbians about this crucial tax change, and explain why it is vital to BC’s long-term economic well-being.As I’ve stated previously, good public policy does not always equal good

politics, and the HST has gotten caught up in the politics. I’m sure many of you, like me, have had some uncomfortable moments over the past few months, as people have questioned not only the merit of the new tax, but also the Institute’s support of this policy. But our support must not waiver if we want the government to follow through on its commitment. Equally important is the need to better inform the public about how the HST can spur capital investment and create jobs. A strong economy will benefit everyone, in part by paying for the public services on which we all rely.I look forward to your comments on this and other issues during the upcoming

President’s Tour.

—Richard Rees, FCA

Notes from the CEO

Supporting good public policy

September 2010 ica.bc.ca 5September 2010 ica.bc.ca 5

Decisions matter.

The Chartered Accountant designation has always attracted bright young business minds. Until recently, CAs could only meet the requirements of their practical experience at an accounting firm. In today’s world – where over 60% of CAs are employed in industry, government or education – these numbers just didn’t balance.

The Chartered Accountant Training Office program now offers CA students the option of getting their hands-on practical experience by training in leading business and government organizations. Participating employers benefit from CAs trained from day one to understand the specific needs of their business.

The perfect CA for your business is

one who knows your

business.

Learn how you can join these industry

leaders and grow your own CAs.Visit www.catoadvantage.ca

BC TransitBeedie GroupBell AliantCanadian Western BankEnbridge Gas Distribution Inc. George Weston LimitedGovernment of New Brunswick – Office of the ComptrollerInmet MiningInsurance Corporation of British Columbia (ICBC)Investors Group Inc.J.D. Irving, LimitedLoblaw Companies LimitedManulife FinancialMatson, Driscoll & Damico Ltd.Navigant ConsultingNexenOffice of the Comptroller General Newfoundland and LabradorOffice of the Comptroller General of Canada OnexPRA GroupProtivitiResearch In Motion (RIM)Royal Bank of CanadaScore MediaSobeys Inc.TELUSThe BrickThe Great-West Life Assurance CompanyUnion Gas Limited


For the Profession

This month’s magazine features inter-views with four expanded experience opportunity (EEO) CA training offices

(CATOs) in industry (see page 16). These EEO CATOs are helping to further the growth of the CA profession by providing a broader range of training opportunities for prospective CAs. Fur-thering the profession’s growth in this manner will help us maintain the CA profession’s prom-inence in the marketplace.

The call is out to recruit more organizations in the corporate and public sector, and also to fur-ther expand the EEO program in public practice. But there are other ways in which members and firms can help the profession thrive, including participating in the matching scholarship pro-gram of the CA Education Foundation (CAEF).

Matching scholarships program creates win/win scenarioThe CAEF is a registered charity established by the ICABC in 1990 to support the endeavours of current and future CAs. One of the CAEF’s most important activities is to ensure that scholarships are available to students at every university and college in BC. To that end, the CAEF launched a matching scholarship program in 2002, through which it matches any new funds made available to a post- secondary institution by a CA firm or association.

The matching scholarship program is designed to benefit educational institutions and firms/associations alike. Firms/associations benefit by getting the opportunity to: •Namethescholarshiptheyhelpcreate; •EncouragetalentedcandidatestojointheCAprofession; •Participateintheeducationalinstitution’sannualpresentationceremonies; •Experienceincreasedvisibilitythroughscholarshipannouncementsinlocalmediaand

Beyond Numbers; •HavetheirnamelistedontheCAEFwebsite;and, •Receivethetaxdeductionresultingfromthedonation.

Over 30 scholarships are currently available each year, and they’re administered either directly by the universitiesorbytheCAEFitself.Someofthesescholarshipshelpstudentswithfinancialneed;othersrecognizeacademicexcellenceand/orleadership;allgotostudentswho’veindicatedtheirintentionstobecome CAs.

Four of these scholarships were created through the matching scholarship program, thanks to the involvement of the Kelowna CA Association, the Fraser Valley CA Association, Chan Foucher LefebvreLLP,andBurseyBurynQuiringCharteredAccountants.Wethankthemforparticipatinginthe program, and we encourage other firms and associations to become involved!

More infoPleasevisittheCAEducationFoundation’swebsiteatwww.caef.bc.ca or contact Amy Lam, CA, the ICABC’s senior director of Member Services and staff representative for the CAEF, at [email protected] for more information about the matching scholarship program.

Furthering the Profession’s GrowthBy Amy Lam, CASenior Director of Member Services

Furthering the profession through branding

Look for new CA ads on television and radio in late SeptemberThe national branding of CAs as critical decision-makers continues with a new ad campaign being launched at the end

of September. The new television, radio, print, and billboard ads have been developed to be both challenging and

entertaining, while reinforcing the notion that CAs help you make better decisions. The campaign will run from October

2010 through March 2011 in key markets across Canada.

While the general public will not start seeing the CA profession’s new ad campaign until the official launch, members will

be able to get a sneak peek. An “invitation” email from the CICA will be sent to you in the next couple of weeks, with

details on how to view the ads. More information about the launch will also be provided in the October 2010 issue of

CAmagazine.


Helping future CAsHave you ever wondered how you could help students who are interested in becoming members of our proud profession? Consider donating to the CA Education Foundation (CAEF).

The CAEF is a registered charity established by the BC Institute of CAs to support the endeavours of current and future CAs. One of the Foundation’s important activities is to ensure that scholarships are available to students at every university and college in BC. Currently there are more than 30 scholarships available each year, all of which go to students who’ve indicated their intentions to become CAs.

There are different ways to donate: • General donations – Mail, fax, or drop off a donation at the ICABC’s offices in downtown Vancouver. • Planned giving – Include the CAEF in your will. • Giving in memoriam – Make a gift in honour of a colleague or family member.• Matching Scholarship Program for CA firms and associations – Participate in the CAEF’s matching program.

Please visit the CA Education Foundation’s website at www.caef.bc.ca for more information.

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On the Cover

Peter Norwood’s soft-spoken, laid-backdemeanour belies the fact that he’s very driven—particularly in terms of his

commitment to education and the CA profes-sion. Focused and ready to lead the Institute, the full-time educator brings a unique perspective to the role of ICABC president.

“I think it’s important to have diversity in the leadership of the Institute,” Peter says. “Ourmembers don’t all work in the same sector or come from the same backgrounds, so it’s good to have different perspectives on Council.”

Peter’sownforayintotheworldofaccountinghappened in two stages. Born and raised in Edmonton, he attended the University of Alberta, where he completed a commerce degree in 1974. That same year, he accepted an articling position with a local CA firm.

“I knew I wanted a career in business, and the father of a good friend was a CA, which gave me someinsightintotheprofession,”hesays.“Plus,I liked the fact that the designation seemed to guaranteejobsecurity.Butatthatpoint,Iwasn’tsure that the CA profession was right for me. And I knew I wanted to go back to university.”

SowhenwordcameofalucrativejobpossibilityinBC,Peterhadabigdecisiontomake.

“A friend of mine was working for a contractor ontheMicaDamprojectnorthofRevelstoke,and he told me they needed someone to handle their purchasing,” he recounts. “The job paidsubstantially more than an articling position, so it meant that I’d be able to save up for school.”

Withthatgoalinmind,Peterquithisarticlesin April of 1975 and moved to Mica Creek, where he worked through the summer of 1976.

“It was the best decision I ever made,” he says. “NotonlywasIabletosaveupforuniversity,butIalsometmywifeHelenwhileIwasthere.”(OriginallyfromManitoba,Helenwasworkingfor BC Hydro in administrative services at the time. She retired from BC Hydro this summer, after working on and off for the Crown

Meet Your New President: Peter Norwood, FCA By Michelle McRae, Editor


corporation for approximately 35 years.)In1976,PetermovedtoOntariotopursuean

MBA at the University of Western Ontario(nowtheRichardIveySchoolofBusiness).

“It was the best MBA program at the time, and being a part of it was a great experience,” he says. “It was a general program, but I was focused on finance and management. I wanted to better understand the management side of things because I was thinking about pursuing a career in consulting.”

Peter earned his masters degree in 1978 (heand Helen were married that same year), andsoonreceivedjoboffersfromseveralconsultingfirms. But one question kept coming up.

“PeoplekeptaskingmewhyIhadn’tfinishedthe CA program,” he remembers, chuckling. “I figured I should clear the blemish off my resume and earn my CA designation. Besides—I quite liked accounting.”

AfterinterviewingwithseveralCAfirms,PeteracceptedanofferfromDeloitte&ToucheLLP(thenDeloitteHaskins&Sells)inJune1978.Itwas the firm that most supported his desire to head west.

“Bythen,HelenandIknewwewantedtomoveback to Western Canada,” he explains, “and Deloitte supported the idea of me relocating before I’d even earned my designation.”

The couple subsequently moved to Vancouver, BC,wherePetercompletedhisarticlesin1981.

Soonafterearninghisdesignation,Peterwasasked if he’d consider teaching. In 1980, Dr. Don Carter, FCA—then head of the School of CharteredAccountancy(SCA),andlatertheVPof the CA School of Business—asked CA firms to recommend teachers for the first year of the program.Peter’swasoneofthenamesputforward.

“I hadn’t really ever thought about teaching,” he admits, “but it sounded like an interesting opportunity.”

Peterbeganteachingpart-timefortheSCAin1981.Itprovedtobeanaturalfit,andhecarriedon teaching even after leaving public practice in 1985toworkinindustry.Hisworkinindustryincluded a role as assistant to the director of finance for Molson Breweries.

“I loved it,” he says of the job. “It had a marketing aspect that I found really interesting. But when Molson merged with Carling O’Keefe in 1990, they announced that they planned to consolidate the accounting departments to Toronto.AndHelenandIdidn’twanttomoveback to Ontario.”

So Peter stepped down from Molson, andjoinedtheVancouverlawfirmLadnerDownsascontroller.HeleftLadnerDownsafterjustoneyear when the opportunity arose to serve as director of Education Services for the Society of Management Accountants of BC (CMABC). As his first full-time position in education, it proved to be a turning point in his career.

He continued to teach part-time while working at the CMABC—teaching CA students in the SCA and CMA students in the CMA program—and made the leap to a full-time teaching position in 1994, after receiving an offerfromLangaraCollege.In1995,Peteralsobecame a sessional instructor in the Diploma Accounting Program at the Sauder School ofBusinessattheUniversityofBC.Hecontinuesto teach at both institutions.

“I never really dreamed of moving up the ladder in business to become a partner of a big firm,”he says. “I really enjoy education. I liketeaching, and I like the students—I think that

makes a difference in terms of my effectiveness as an instructor.”

In1996,Peterbegantakingonadministrativeduties at Langara as well. From 1996 to 2001, he served as the coordinator of its Accounting Program,andfrom1997to2003,heservedasamember of the College Foundation.

In2001,Langara’sAccountingProgrambecamethe “Financial Management Department,” and Peter took the helm as chair. While chairing the department for the next three years, he successfully negotiated an agreement with the CMABC to deliver the CMA FastTrack program attheCollege.Healsoservedaspartofateamproposing to expand the department’s diploma programintoadegree-grantingprogram;thisgoalwas reached in 2006, with the BBA becoming a reality at Langara.

That same year, the College’s various business faculties were amalgamated into what is now the Langara School of Management. Peter hasserved as chair of the School since its inception. In addition to his teaching duties, he is responsible for overseeing the administration of all business-related degrees and diplomas at Langara;thisincludescurriculumreview,sched-uling, budgeting, and student counselling.

“We’ve seen a nice, steady growth in theSchool over the past four years,” he says. “In the last two years alone, the School has doubled in size.”

In addition to his ongoing contributions to Langara and theSauderSchool atUBC,Peterhas long been contributing to CA education through volunteerism in the profession at the national and provincial levels. From 1997 to 2002, for example, he was a member of the CICA’s board of evaluators. It was a time of

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great transition for the CA program.“We were transitioning from the old ‘UFE’

exam to the new competency-based approach at that time,” he explains. “The board played an extensive and important role in developing this evaluation process.”

From 2006 to 2009, Peter participated in another pivotal transition for CA education—this time as a key contributor in the strategic planning of the CA School of Business (CASB), where he once again worked alongside Don Carter. Today, Peter continues to serve onCASB’s board of directors. In addition, he currently serves as chair of the board of gover-nors of the Chartered Accountants’ Education Foundation (CAEF), having previously served on the CAEF’s Accounting Educators’ Symposium Committee.

PeterisalsoaformermemberoftheICABC’sPDandPDManagementProgramcommittees.In addition, he is the co-author of a university accounting textbook, which is currently in its eighth edition.

HebecameinvolvedwiththeICABCCouncilin 2005, on the urging—once again—of Don Carter.

“Don wanted to ensure that there would continue to be an academic on Council after

Johan de Rooy [FCA] stepped down from his term,”Petersays.“I’mreallygladheencouragedme to get involved.”

Notsurprisingly,ashecontemplatesCouncil’sgoals for the comingyear,Peterhas educationon his mind.

“A lot of what Council focuses on depends on thenationalagenda,”hesays.“Itjustsohappensthat education and training are currently on everyone’s radar. There’s definitely a push to create more CA training offices with expanded experience opportunities. In recent years, we’ve had substantially more qualified candidates than training positions in BC, so it’s obvious that more training opportunities are needed. And I think we’re on the right track.

“It’s hard to imagine what you can accomplish inayear,butI’moptimistic,”headds.“Wehavea progressive, engaged Council that wants to keep the current momentum going.”

When not on campus or at the Institute’s offices, Peter’s favourite pastimes are golfing and ice hockey. An avid hockey player since childhood, Peter has been a member of theGreyhawks hockey team in Steveston for the past15years.HealsocoachedhockeywiththeRichmondMinorHockeyAssociationwhenhistwo sons were growing up, and served on the

Association’s board. He and Helen’s eldest son Chris (28) has a commerce degree with amarketing focus from the Sauder School at UBC, and currently works in artist management for Nettwerk Music Group in Vancouver; theiryoungestsonRyan(25)hasaphilosophydegreefromMountAllisonUniversity inNewBrunswick, and is heading back to Korea this month to teach English, having taught there last year.

PeternevertriedtosteerhissonsintotheCAprofession, but that’s only because he wanted themtochooseforthemselves.Hehasnoregretsabout his own career path.

“Finishing the CA program was the best career decision I ever made—second only to taking thatjobinMicaCreek,”hesays.“I’mveryawareof what being a member of the CA profession has given me. That’s why I think it’s so impor-tant give back.”

Peter was elected to the ICABC Fellowship in 2009. He is also a Fellow Certified Management Accountant.

PhotographyCover photo by Kent Kallberg of Kent Kallberg Studios Ltd. in Vancouver.dap_beyondnumbers_sep09.eps 9/9/2009 1:56:57 PM


2010/2011 ICABC Council

Peter Norwood, FCAPresident

Langara CollegeVancouver

Lenard Boggio, FCA1st Vice-President

PricewaterhouseCoopers LLPVancouver

Gordon Holloway, FCA2nd Vice-President

KPMG LLPAbbotsford

Michael Macdonell, CATreasurer

Office of the Auditor GeneralVictoria

Olin AntonDeloitte & Touche LLP

Vancouver

Jack Arnold, CAMacKay LLP

Surrey

Linda Lee Brougham, CA

LL Brougham Inc., CAVictoria

Kyman Chan, CAHayes Stewart Little & Co.

Victoria

Karen Christiansen, CAMeyers Norris Penny LLP

Kelowna

John Crawford, CAPacific Blue Cross

Burnaby

Andrew (Sandy) Hilton, CAUBC Okanagan

Kelowna

David HughesPublic Representative

Surrey

Sheila Nelson, CAChan Foucher LeFebvre LLP

Prince George

John Sims, FCAManning Elliott LLP

Vancouver

Kenneth TungPublic Representative

Richmond

Praveen Vohora, CAVohora & Company

Surrey/Prince Rupert

Eric Watt, CAKPMG LLP

Vancouver

Al McNair’s term as a public representative expired on April 30, 2010, and the Institute is currently awaiting the government’s appointment of a new public representative to fill the vacancy.

PhotographyPhotos of Peter Norwood and John Sims by Kent Kallberg of Kent Kallberg Studios Ltd.Photo of Linda Lee Brougham by Quinton Gordon.

Inmyjob,IlovetalkingtomemberswhoarejustasproudtobecharteredaccountantsasI am. The CA profession is prestigious not

only because candidates must pass gruelling qualification requirements, but also because of the high standards we must uphold once we’ve earned the designation. And one of the most important things we can do to uphold these high standards—and maintain the public’s trust and the reputation of the CA designation—is commit to continuing professional development (CPD).

From my discussions with members, I’ve learned that most of you consider CPD a given. You’ve told me you see it as an investment in your career and in your future, and that you expectotherCAstokeepupwithCPDaswell,to ensure the continuing pre-eminence of the CA designation. As one of you told me: “It’s just part of the privilege of being able to call ourselves CAs.”

So as the end of the first triennial cycle under the international education standard nears, where do we all stand when it comes to meeting themorerigorousCPDrequirements?AndhowcantheInstitutehelp?

CPD Status Update: First Triennial Cycle Drawing to a Close By Stella Lam-Leung, CA, Associate Director of Professional Development

First, a recap:In2008,theCPDrequirementsformembersoftheBCInstitutewererevisedtomeettheguidelinesset by the International Federation of Accountants (IFAC). These guidelines require members to completeatleast120hoursofCPDineachtriennialcycle,and20hoursannually.TheIFACstandardis theminimum levelofCPDcommitment expectedofmembers, irrespectiveofwhether they are involved in traditional accounting roles or otherwise. The increased requirements are timely given the rapid pace of change in today’s business environment.

So far, so good… but time to check inTheCPDactivitiesreportedbyBCmembersfor2008and2009indicatethatalmostallmembersareactuallyundertakingmuchmore than theminimumlevel required.Moreover, thevastmajorityofmembers are ahead of schedule in meeting the minimum triennial requirements, with few leaving the balance of the triennial requirements to the last year in the cycle.

This data is very encouraging. Still, given that 2010 marks the final year of our first triennial cycle under the IFAC standard, and that the deadline to meet the more rigorous requirements of this cycle is only a few months away (December 31, 2010), now is a good time for all members to review how muchCPDthey’vereportedtodate.Doingsoissimple:YoucancheckyourCPDreportinghistorybyloggingintoourCPDOnlineReportingSystemat www.ica.bc.ca/secure.

Recognizing that CPD needs varyWeknowthatCPDneedsvaryfromCAtoCA.Accordingly,thespiritoftheCPDprogramisto letmembersassesstheirownCPDneeds,anddeterminehowbesttomeetthem.Membershavethefreedom to choose the educational options best suited to their needs—whether these be formal education programs, one-day or multi-day seminars, or exchanges of information in technical discussion groups (including groups established by professional/industry organizations, created in-house at CAs’ workplaces, or comprised of peers with similar interests in the business community). In other words, CPDdoesnothavetobetakenthroughtheInstitute;nordoesithavetoconsistsolelyofaccounting,assurance, or tax courses.



More rigorous, but also more flexibleAlthough BC’s CPD requirements became morerigorous in 2008, the program itself actually becamemoreflexible.Priorto2008,thenumberof creditable hours was limited according to certain categories; for example, a maximum of25 CPD hours could be earned at technical conferences, and a maximum of 10 hours could come from unverifiable sources. In 2008, theselimits were eliminated, which means that memberscannowtakefullcreditforanyCPDhours they complete, as long as at least half of the minimum requirements are from verifiable sources. IFAC defines “verifiable CPD” as anylearningactivitythatcanbeverifiedobjectivelyby a competent source.

Because of the latitude inherent in the CPDprogram, the onus is on members to ensure that their learning activities are relevant to their pro-fessional roles and of sufficiently high quality. Furthermore, members are responsible to retain appropriate evidence to demonstrate their compliancewiththeCPDrequirements.

Recent changes to CPD program signal exemptions for some CAsWhen the IFAC CPD standard was first adoptedin2008,allmemberswererequiredtocomplywiththenew,morerigorousCPDrequirements.Some members subsequently informed us that they found it challenging to meet these new requirements,sotheProfessionalDevelopmentReviewCommittee,alongwithagroupofactiveand retired CAs and a public representative, reviewed our requirements within the IFAC guidelines to ensure that we create a better balance between reasonableness and public ex-pectations.

As a result of this review process, the CPD requirements for BC members in retirement and members out of the workforce caring for dependents—who meet certain criteria—were recently changed. Now, members in these categories who neither engage in the practice of public accounting nor serve on the board of a public company or reporting issuer may be eligible for exemption from the minimum CPDrequirementsiftheirgross annual earnings (a defined term) do not exceed $27,100 for 2010. Members in these categories must submit

a declaration form to the Institute confirming their eligibility for the CPD exemption. Note: This exemption applies in BC only—BC members who belong to other provincial CA institutes must check withtheseotherinstitutestomakesuretheymeetalloftheirrespectiveCPDobligations.

To access full details on exemption criteria and the declaration form, visit our website at www.ica.bc.ca/cpd.

The role of the Professional Development Review CommitteeThe Professional Development Review Committee (PDRC) is comprised of volunteer CAs. The PDRCadvisesCouncilonpolicymattersrelatingtotheCPDprogram;monitorsandensuresthatmemberscomply with the CPD Bylaws and Bylaw Regulations; and reviews and makes decisions about discretionarymatterspertainingtoCPDexemptionsinunusualorextenuatingcircumstances.

Any member who believes that they have a valid reason for a reduction in (or exemption from) the minimumCPDrequirementmaysubmitawrittenrequesttothePDRCforconsideration.ThePDRCreviews each request on a confidential basis, and bases its determination on the information submitted.

Note: Members who submit a request related to a medical condition must attach a letter from their medicalpractitioner.MemberswhowillnotbeabletomeettheirCPDobligationsforwhateverreasonbutdonotqualifyforareductionorexemptionshouldsubmitawrittenrequesttothePDRC,statingtheir reasons and their plans to restore compliance.

Helping you meet your CPD requirementsThe ICABC and the CICA have developed a number of tools to help you meet and report your CPDrequirements,someofwhicharedetailedonpage14.IfyouhaveanyquestionsaboutthesetoolsorabouttheCPDprogramorcompliancewithrequirements,[email protected] or contact Lisa Murray at [email protected]’reheretohelp!

Tools to help


Tools to help you earn, record, and report CPD creditsCPD offerings from the Institute and other providersAs part of the Institute’s member services program, we provide more than 500 seminar offerings each year. Topics

range from traditional accounting, assurance, and tax courses to broader, management-related courses, to conference

days for members in industry and public practitioners. To see what we’re offering this fall, visit www.icabc-pd.com,

where our fall program brochure is now available. (Highlights are provided on pages 22 and 23.)

Still, given the diversity of members’ CPD needs, we know that we can’t provide all of the courses that might be

relevant to each of you. We can, however, help you find what you’re looking for. To that end, we’ve compiled a list

of other CPD sources that might be of interest to you, and we’ve noted low-cost sources, verifiable online sources,

and sources accessible to members living outside the Vancouver area. This CPD source list is available at

www.icabc-pd.com/cpd.

Free PDThe Institute is committed to offering free PD sessions on topics of general interest whenever possible. Two free PD

executive breakfasts will be held this fall:

• October5,2010-Eric Turner, CA, a principal in the CICA’s Auditing and Assurance Standards department, will

present “Breaking Open Your New CAs Handbook.”

• December15,2010-Helmut Pastrick, the chief economist for Central 1 Credit Union, will present an early edition of

the “2011 Economic Forecast.”

Be sure to check monthly mailings and the website for updates about additional free PD sessions as they’re added

throughout the year.

PD on Audio – now eligible for verifiable CPD credits!Recognizing that many of you are unable to attend PD seminars in person, we’re committed to helping you meet your

CPD needs in alternative ways. So we’re pleased to announce that “PD on Audio” (direct recordings of select live PD

seminars) will be available on our website as downloadable MP3 audio files effective September 30, 2010, along with

any corresponding handout materials (in PDF format). After listening to an entire audio presentation and successfully

completing a short quiz (also accessible via the website), you will receive a certificate of completion and be able to

claim verifiable CPD credit!

CICA webinarsDid you know that you can claim verifiable CPD credit for live and archived webinars? The CICA offers free one-hour

webinars on a variety of topics, and these webinars are archived after being broadcast live, giving you more flexibility.

All you have to do to claim verifiable CPD credit for either live or archived webinars is register for a given webinar prior

to viewing it in order to trigger the verification trail, watch the webinar, and successfully complete a quiz. You will then

receive confirmation that you’ve earned these credits.

Online CPD reportingOnline CPD reporting was designed to simplify the record-keeping and annual reporting processes for members, and

we’re pleased to say that more than half of you are now filing your annual CPD reports online.

This service enables you to log CPD activities online throughout the year, as you complete them, and retrieve your BC

Institute seminar registration information at any time. Keeping a running log of CPD activities means that at the end of

the year, all you have to do to indicate that you’ve entered all of your CPD activities is click “submit,” and the reporting

obligation will be met.

As an added bonus, if you file your 2010 CPD report by January 31, 2011, you will be entered in a draw to win a

2011/2012 Personal PD Passport, valid for six days of passport-valid seminars. Lori Wanamaker, CA, deputy minister of

the Ministry of Tourism, Culture, and the Arts in Victoria, BC, won the 2010/2011 Personal PD Passport.

“The new CPD online reporting system is simple to use and efficient,” Lori says. “My 2009 report took less than 10

minutes to complete and submit.”

Congrats on winning the 2010/2011 draw Lori!

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An Update on Industry CA Training Offices in BC By Harp Bagri, CA, Manager, CA Training Office Liaison with the CA School of Business

Editor: In the September 2009 issue of Beyond Numbers, Lara Greguric, CA, the director of CA Training Offices for the CA School of Business, provided an update on the status of the CA profession’s expanded experience opportunity (EEO) program. Since that time, the number of CA training offices that are approved to train with paths outside of assurance has continued to increase across the country. This article focuses on four EEO training offices in industry. An update on EEO training offices in public practice will be provided in a future issue of the magazine.

In my role as manager, CA Training Office liaison with the CA School of Business (CASB), I speak to many organizations

about the process of becoming an approved CA training office (CATO). Many of these organizations are in industry (whether in the corporate or public sector), and they have a variety of questions about becoming a CATO—oneofthemorecommonbeing:“WhyshouldwebecomeaCATO?”Itellthemthattherearenumerous benefits to becoming a training office for future CAs, including: broadening university graduaterecruitmentanddevelopingexistingstaff;meeting successionplanningneeds;developingleadershipandlong-termfit;retainingkeyper-sonnel;reducinghigh-costsenior-levelrecruitment;and developing staff with an implicit corporate and industry knowledge-base.

Touching base with TELUS To further expand on these benefits, I thought it would be good to touch base with the first industry CATO in BC: TELUS. An approved training office in BC, Alberta, and Ontario since 2007, TELUS currently has six CA students on UFE study leave, each of whom will be writing the UFE this fall. Three of these students are training here in BC.

I spoke with Kimberly Ziprick, CA,themanageroftheCATrainingProgramforTELUS,tofindouthowbecomingaCATOhasaffectedtheorganization.Here’swhatshehadtosay:

Harp Bagri, CA: What impact has the CATO program had on TELUS so far?

Kimberly Ziprick, CA: Being part of the CATO program for the past three years has been a very positiveexperienceforTELUS.We’vehadtheopportunitytoreviewtherotationsystemthat’spartofourFinancialManagementDevelopmentProgram[FMDP],andstrengthenthelearningexperienceswe’re providing to our CA students and our accounting and finance professional students. We’ve expanded the number of TELUS team members who are involved in the program by inviting more of the CAs from across our organization to become CA counselling members and rotation managers. Being a counselling member to a student gives our CAs a chance to give back to the CA profession.

HB: Why did TELUS choose to become a CATO in the first place?

KZ:TELUSwasapproachedbytheCICAtobecomeaCATOin2007.Wefeltitwasaveryvaluableand rewarding opportunity to expand our existing FMDP and attract more of the top university graduates in the country to our organization, providing them with the practical experience to excel in theirfutureprofessionalcareers.OurFMDPhasrunatTELUSformorethan40years,andmanyofthose who have been through that program are now in a broad range of management positions—from juniortosenior—withinthecompany.

HB: Has TELUS met some of the goals it set in becoming a CATO?

KZ: Definitely. Our program has been very successful for candidates, especially because they can fill rotations in any of the three provinces in which we have training offices. Also, when we became a CATO, we found that CAs had unique skills that we desired, and we’re seeing some of those skills being developed in our CA students now. These skills will benefit the organization in the long term.

HB: Do you have any advice for industry organizations that are considering becoming CATOs?

KZ: Take a good look at your finance organization, and see where you would benefit in both the short and long-term by employing CA students. Also, you need to give CA students a good sense of corporate support from across the company, and enough diversity and growth so that they will stay with the organization post-designation.

WithitsCAtrainingprogramupandrunning—andsuccessful—TELUSplanstocontinuetrainingthenext generation of CAs. The organization’s ongoing support of CA students will help develop CAs in diverse training environments and ensure that the CA designation continues to be the most highly regarded financial designation in Canada.


A Q&A with three new CATOs in industryI’m pleased to announce that there are three new industry CATOs in BC: the Insurance Corporation of British Columbia (ICBC), the British Columbia Transit Service (BC Transit), and the Beedie Group, a private company that specializes in the design, construction, and management of industrial buildings in Greater Vancouver.

To find out what motivated these organizations to get involved in the training of CA students, I spoke with Susan Lucas, CA,directorofRiskManagement&CorporateAuditforICBC;Michael Kohl, CA,directorofFinancialReportingforBCTransit;andRandy Strandt, CA, director of Finance for the Beedie Group.

HB: Why did your organization want to become a CA Training Office?

Susan Lucas, CA:TheInsuranceCorporationofBCisacomplexfinancialorganizationwithlotsofinterestingfinancialwork.Wealreadyhaveanumberof CAs in the company—many in management and senior leadership roles. Everyone I’ve spoken to thought this would be a great opportunity to help grow theCAbrandand,atthesametime,develophigh-qualitystaff.WebelievetheprogramwilldevelopCAswhobringthefinancialandbusinessacumenweneed to run our business, and we have enough diversity in our company to provide a challenging learning environment for students.

Michael Kohl, CA: BC Transit has experienced significant growth in the last ten years, and along with that, an increasingly complex environment. Developing a partnership with the ICABC and CASB will help us ensure that we continue to attract top-quality individuals to the organization while continuing to maintain our leadership with our various provincial and municipal stakeholders. This program will help us develop our people internally, through the rigour of the CA program, and give them opportunities to grow within the organization.

Randy Strandt, CA: Our senior accountant at the Beedie Group expressed interest in the CA program and talked to me about becoming a mentor. The company supports career advancement and training, and we agreed to explore the option of becoming a CATO. The chief financial officer and I are proud CAs with a knowledge of the skills, abilities, and development that come from completing the CA program. The ability to support our own staff in this program and attract future candidates is a fantastic opportunity for us.


HB: What are the benefits of becoming a CATO?

SL:Thisprogramisconsistentwithourobjectiveof providing our staff with an employment experience where they can continually grow and develop their careers at ICBC. CA students joining ICBC will have the opportunity to develop depth in assurance or reporting and analysis, as well as experience rotations in up to four different business areas. They will be working with experienced managers who will guideandchallengethem.We’recommittedtoputting the time and energy into making this a rewarding experience for any student. After all, we’ll be making an investment as an employer, and we want our students to get the most out of this investment.

MK: We believe that having an opportunityto train CA students will attract outstanding individuals interested in careers outside of public practice. It allows us to invest in our people and develop outstanding individuals within the organization in what we view as a win-win relationship for both us and the Institute.

RS: The Beedie Group has been in business for over 50 years, and it has always been a priority to hire and retain highly skilled and loyal staff. Becoming a CATO will help us continue this tradition in our finance department to develop current staff, and also as we look forward to attracting new talent. As our organization continues to expand, the need for skilled people in the areas of finance and accounting continues to grow as well. By training CA students, we will gain staff with increased knowledge, skills, and ability, and at the same time build loyalty, expertise, and skill sets in our finance department. It means that we will be able to meet some of our

expanding needs for financial professionals through internal development, as opposed to constantly looking outside for CAs trained in public practice.

HB: Can you please describe the CATO application process?

SL: The application process was so easy, thanks to your help! I pulled together a meeting of colleagues who would be participating in the program by way of having students doing rotations in their business areas. You explained the program (since it was new to all of us!), and made it really easy to document our competen-cies and our areas of breadth and depth. It made the application process painless.

MK: We definitely appreciated your feedbackand updates during the application process. The attention to detail throughout was second to none.

RS: The application process was well done, with excellent materials in place to support the background of CASB, the training program, competencies, and requirements. Information provided at each level was informative but focused. The support and assistance from the staff at the Institute made the process much easier and quicker.

HB: What was the reaction of staff members when they learned that your organization had become an approved CATO?

SL: Excitement! Not just from the staff, butfrom management and our in-house counsel as well (I think they might be envious of the program). They think it’s exciting to qualify and are already asking me about next steps.

MK: BC Transit is very excited at the opportunity. Being designated as a training office will help the company attract, train, and develop strong candidates in what we view as a great opportu-nity for both the company and the candidates.

RS: We all felt very proud to be associatedwith CASB and involved with the training of leading finance professionals in Canada. It’s an exciting opportunity for the company to enhance the skills in our finance team. Innovation, leadership, and knowledge have been keys to our success, and our approval as a CATO is one more step in supporting this vision.

HB: How many CA students do you plan to have on staff by the end of 2010?

SL: Our plan is to hire two students in 2010 for a 2011 start.

MK:Wewereapprovedfortwotrainingpositions,and we will have at least one CA student on hand at the end of 2010.

RS: One student for 2010.

HB: Any final thoughts you’d like to share on the CATO process?

SL: I participated in an Institute focus group a few years ago when the idea was first floated, and I must say, I wasn’t in favour. I worried about what would happen to the CA brand—about the quality of the training and consistency. Whataboutbeinglimitedtoonlyonecompany?But after going through the presentation and understanding the program’s structure, those fearsdissipated.Publicpracticemaynotbefor

Candidate portal improves CASB results releaseInMay2010,CASBannouncedanewmethodfordeliveringresultstostudentsandtheirtrainingoffices.BeginningwiththeresultsreleasedinJuly2010,detailedstudentresultsarenowavailableonlinethrougha“CandidatePortal”forstudentsand“CATOPortal”forCAtrainingoffices(CATOs).

Previously,studentsandtheirfirmshadtowaitweeksforcasefeedbackforms,transcripts,andacademichistoriestoarriveinthemail.Throughtheportal, students can now view their case feedback forms at the same time as they learn of their status in the module, and they can download their transcripts and academic histories one week later.

This change marks a significant service delivery improvement from CASB, as students can use the case feedback forms to debrief the module evaluation at an earlier date. It also considerably reduces CASB’s carbon footprint, as two copies of each multi-page result package for 4,000 students (one copy for the student, and one for their firm) are no longer being printed and mailed from the Learning Centre in Vancouver.


everyone. I look at my peers at ICBC, and we all made the choice to work in industry and love it. Wethinkthereareothersouttherelikeus,andwe look forward to attracting those people to our organization and to the CA program.

MK: I would encourage more private businesses to pursue becoming a CATO in BC. The benefit of being an approved training office will only aid in recruiting talent who aren’t necessarily inter-ested in public practice, but realize why the CA designation has a long tradition of being the foremost professional accounting designation in Canada.

RS: Becoming a CATO certainly provides the Beedie Group with enhanced training and recruiting abilities for our expanding group but it also forces us to maintain an appropriate level of technical competence and skills in our management team to ensure that we’re able to train and support our staff internally.

Expanding the EEO and CATO programs furtherEstablishing CA student positions in various industry organizations gives students a choice when it comes to the training environment for their CA designation. This, in turn, expands the relevance of the profession to a larger student audience.WiththehelpofourEEOCATOsinindustry, we will be able to provide an increased number of training positions to help secure the future supply of CAs. In addition, this initiative will ensure international consistency, as our CA peers in foreign countries have been training CA students in industry organizations for quite some time now.

To get more information about becoming an approved training office, visit our website at www.catoadvantage.ca. You can reach me at 604-488-2648(direct)[email protected].

Currently approved* CATOS in industry, across Canada:

Corporate SectorOrganization Province(s)Beedie Group BCBell Aliant NS, NBCameco SKCanadian Western Bank ABEnbridge Gas Distribution Inc. ONGeorge Weston Limited ONGreat West Life MBInmet Mining Corporation ONInvestors Group Inc. MBJD Irving Limited NBLoblaw Companies Limited ONManulife Financial ONMatson, Driscoll and Damico AB, ONMorgan & Partners ONNavigant Consulting ONNexen ABONEX Corporation ONOZZ Electric Inc. ONPRA Group BCProtiviti ONResearch In Motion (RIM) ONRoyal Bank of Canada ONScore Media Inc. ONSMART Technologies ABSobeys NSTELUS AB, BC, ONThe Brick ABUnion Gas ONViterra SKWilliams & Partners Forensic Accountants Inc. ON

Public SectorOrganization ProvinceAlberta Education ABBC Transit BCInsurance Corporation of British Columbia (ICBC) BCOffice of the Comptroller General of Canada ONOffice of the Comptroller General of Newfoundland NLOffice of the Comptroller General of New Brunswick NB

*The list of approved employers increases regularly. For the most current listing, please visit www.CATOadvantage.ca.

Reaching a milestoneInJuly2010,Kuldip Mann, CA, became the first candidate to qualify for the CA designation in BC aftertrainingoutsideofpublicpractice!HearticledwithPRAGroup,anassuranceandbusinessadvi-soryservicesproviderthatwasapprovedasanindustryCATOin2008.CongratulationsKuldip!


Tax Traps & Tips

Residency – Maintaining “Mind and Management”By Maggie Chan, CA

The concept of residency is fundamental to the Canadian tax system. A complete analysis is beyond the scope of this

article, so let’s focus instead on one of the key tax-risk management considerations for many Canadian multinationals: the residency of foreign corporate group members.

A company’s residency status is often relevant when determining its exposure to foreign and domestic taxes. For example, a resident company in Canada would be liable to corporate tax on its worldwide income, whereas a non-resident company’s liability would be restricted to the income arising from Canadian activities. There-fore, Canadian companies should be monitoring the residency of their foreign affiliates on an ongoing basis.

Place of incorporationFor Canadian tax purposes, our current test is a combination of place of incorporation and central management and control.

A corporation is generally deemed to be resident in Canada if it is incorporated in Canada. At the same time, a company incorporated in another jurisdiction may also be considered resident in Canada, provided that its residency is not resolved in favour of a country with which Canada has entered into a tax convention, under the terms of the relevant tax convention.

Central management and controlFor corporate central management and control—sometimes referred to as “mind and management”—the Canadian courts have generally followed the principles applied in De Beers Consolidated Mines Limited v. Howe (Surveyor of Taxes), [1906] A.C. 455 (De Beers), a precedent-setting case in the United Kingdom. The principles of the De Beers case are still applicable today with respect to corporate residency under common law in Canada.

De Beers was incorporated in South Africa—the location of its head office and its main trading operations.Nevertheless,thecourtheldthatthecompanywasaresidentoftheUK,basingitsdecisionon the following factors: •ThemajorityofthedirectorsandthelifegovernorslivedinEngland; •ThecompanyheldgeneralmeetingsinSouthAfrica,butthedirectors’meetingsinLondonwerethe

meetings where the real control was exercised in practically all of the important business aspects of the company, except the mining operations.

The court concluded that the test of residency is not where the company is registered, but where it actually keeps house and conducts its real business. The real business is carried on wherever the central management and control actually abides, which in the De Beers case, was the UK.

This ruling was confirmed in the much later case of Unit Construction Co Ltd. v. Bullock [1959] 38 TC 712 (Unit Construction). In this case, three wholly owned subsidiary companies were incorporated in Kenya. By their articles of association, powers of management were vested in the directors who were locatedinKenyaanddidnotholdmeetingsintheUK.However,thesemanagementpowerswerenot,in fact, exercised by the local directors, but instead by the board of directors of the parent company in the UK, which effectively made all the decisions. This resulted in the subsidiaries being held as residents of the UK.

The decisions in both the De Beers and Unit Construction cases make it clear that the place of central management and control is primarily a question of fact. Both cases also demonstrate that it is the highest level of control of the business that counts. That control may be exercised by the board of directorsinaccordancewiththearticlesofthecompany,asinDeBeers;orthecontrolmaybeexercisedby some other person—for example, a parent company or individual shareholder who has, in fact, assumed management and control of the business, as in the Unit Construction case.

Onbalance,morerecentjurisprudencecontinuestosupportthenotionssetoutintheoriginalUKdecisions.

2008 Update to the OECD Model Tax ConventionSometimes a corporation can be resident in two countries at the same time under the respective domestic lawsof eachcountry.Wherea corporation is resident in twocountries, a taxconventionbetween those countries often resolves residency in favour of the country wherein the place of effective management resides.

InJuly2008,thecounciloftheOrganizationforEconomicCooperationandDevelopment(OECD)1 approved the recommendations of the 2008 Update to the OECD Model Tax Convention; theserecommendations included a technical change to the concept of “place of effective management.” The text of paragraph 24 of the 2005 edition of the Model Tax Convention offered guidance to tax authorities and taxpayers regarding the term “place of effective management,” providing that: “The place of effective management will ordinarily be the place where the most senior person or group of persons (for example a board of directors) makes its decisions, the place where the actions to be taken by the entity asawholearedetermined;however,nodefinitiverulecanbegiven…”Pursuanttotheapprovalofthe2008 Update recommendations, this sentence has been deleted. An alternative is now offered in paragraph 24.1, under which countries may wish to resolve cases of dual residence through a competent authority on a case-by-case basis.

Factors such as where the meetings of the board of directors are held and where the chief executive officer and other senior executives usually carry on their activities would be taken into consideration by the competent authorities to determine the residency of the corporation.

Whilethemeetinglocationoftheboardofdirectorsisstillrelevant,itshierarchyofimportanceasafactor in determining residency may be different under this new approach. The removal of a hierarchical test further complicates the process of determining where the real central management and control is located.

Corporate residency tipsThe residency of the shareholders and the fact that they elect the directors should not be relevant in determiningresidency;norshoulditimpactcorporateresidencyaslongasthedirectorsmakethemajordecisions.However,caremustbeexercisedifthereistobeashareholders’agreementunderthetermsof which any of the powers will be taken away from the directors and given to the shareholders.

As residency is a question of fact, companies should pay attention and monitor the residency of the foreign subsidiary’s directors. In addition, to ensure non-residency, it is advisable that certain of the foreign subsidiary’s activities/administrative details are conducted/exist outside of Canada. These include: •Meetingsoftheboardofdirectors; •Thesigningoflegalandbusinessdocuments; •Corporatebanking; •Theaddressandtelephonenumbersoftheheadoffice; •Accountingandbookkeeping;and •Theresidencyofthedirectorsandpeoplewithsigning,contracting,anddecision-makingauthority.

Ensuring due diligenceCorporate residency is a key consideration in international tax planning. The residency of a Canadian company’sforeignaffiliatewillberelevantindeterminingwhetherornottheaffiliateissubjecttotaxin Canada, and whether or not earnings of the affiliate will be eligible for exempt surplus treatment. The exempt surplus treatment would allow the repatriation of dividends to Canada, free of Canadian tax.2 As such, due diligence must be exercised to ensure that mind and management is maintained, where intended.

Maggie Chan, CGA, is a tax manager with the Mergers and Acquisition team of Deloitte & Touche LLP in Vancouver. Albert Baker, FCA, is a partner in Deloitte’s International Tax Services group.

1 www.oecd.org2 To be eligible for the exempt surplus treatment, the foreign affiliate must be resident in the foreign

jurisdiction for the purposes of the relevant tax treaty and under common law principles.

2011

604-738-7134

604-688-5100

2011

1275 West 6th Avenue, Suite 300Va n c o u v e r, B . C . V 6 H 1 A 6w w w. m ox o n p e r s o n n e l . c o m


PD News

FALL PD PROGRAMWe have another great selection of courses tochoose from this year. Our fall PD programalone offers more than 190 titles, with 370 offer-ingsaroundtheprovince.Herearesomeofthehighlights:

Mark Your Calendar!PD WeeksKelowna Nov 1-5 Parksville Nov 1-5 Prince George Oct 18-22Surrey Oct 25-29Victoria Nov 15-20 Vancouver Nov 22-27

PD passportsDon’t forget to purchase one of our PD Passports to enjoy incredible savings on either classroom seminars or PD products.

For more information, visit our web-site at www.icabc-pd.com or contact the PD Department at 604-681-3264.

Free PD seminarsBreaking Open Your New CAS HandbookThis session, presented by Eric Turner, CA, of the CICA’s Auditing and Assurance Standards Department, will highlight areas that might come as a surprise to practitioners who are using

the new Canadian auditing standards (CAS) for the first time. Oct 5, 7:30-9:30am, Vancouver

Economic OutlookThis session will provide an overview of current and quickly evolving financial and economic developments.

Helmut Pastrick, the chief economist for Central 1 Credit Union, will share his perspective on the economic outlook for the year ahead.Dec 15, 8-9:30am, Vancouver

Note: Pre-registrationisrequiredforthesefreeseminars, and seating is limited, so be sure to register early!

Audit & AccountingASPE: A Comparison to Canadian GAAP This seminar will help participants understand which aspects of current practice (in all areas) will change under the new accounting standards for private enterprises (ASPE), and how thesechanges will affect the financial statements such enterprises.Oct 18, 9am-5pm, Kelowna

Oct 19, 9am-5pm, Prince George

Oct 20, 9am-5pm, Vancouver

Oct 27, 9am-5pm, Surrey

Nov 1, 9am-5pm, Vancouver

Nov 2, 9am-5pm, Parksville

Nov 5, 9am-5pm, Abbotsford

Nov 9, 9am-5pm, Kamloops

Nov 17, 9am-5pm, Victoria

ASPE: The BasicsThis course will help participants gain a base level of understanding about the new accounting standardsforprivateenterprises(ASPE),whichare now included in Part II of the CICA Handbook - Accounting.Theprimaryobjectivewill be to help participants understand the aspects of current accounting practice that will change underASPE.Oct 22, 9am-12:30pm, Kelowna

Oct 29, 9am-12:30pm, Prince George

Nov 5, 9am-12:30pm, Surrey

Nov 5, 9am-12:30pm, Victoria

Nov 10, 9am-12:30pm, Kamloops

Nov 22, 9am-12:30pm, Vancouver

Auditing in the New CAS EnvironmentThe new Canadian auditing standards (CAS) will become effective for periods ending on or after December 14, 2010. Are you ready for the transition? Is your firm? If not, what can you and your firm start doing now to ensure a successfultransition?

This course will give participants a solid foundation in the practical application of CAS in the new auditing environment. Using case studies, participants will get an opportunity to enhance their understanding of the standards, and to practice applying these standards to a set of client-specific facts. Sep 23-24, 9am-5pm, Vancouver

Oct 21-22, 9am-5pm, Vancouver

Oct 27-28, 9am-5pm, Prince George

Nov 22-23, 9am-5pm, Vancouver

Nov 29-30, 9am-5pm, Surrey

Dec 13-14, 9am-5pm, Victoria

Practitioner’s PotluckWe’re pleased to once again offer this highlypopular conference to our public practice members.

The conference provides a forum in which public practitioners can address issues relevant to managing a successful public practice in BC. It is a great opportunity for practitioners to obtain an overview of key changes and challenges, and to interact with and learn from peers.

The conference will feature a line-up of plenary presentations, and participants will get to choose their breakout sessions during the day. Oct 26, 8:30am-5pm, Vancouver

Finance/Controllership/ Management AccountingDue Diligence for AcquisitionThis seminar will help participants plan and execute due diligence assignments, identify key issues and risks, and know what to look for when undertaking business and financial reviews. The seminar will focus on helping participants understand the objective of the due diligencereview as part of the overall acquisition or divestiture process.Oct 28, 9am-5pm, Vancouver

Nov 15, 9am-5pm, Kelowna

Financing StrategiesThis seminar will provide an in-depth review of the various forms of financing used to fund capital projects, acquisitions, or restructurings of existing capital structures. It will review the various forms of financing, including operating lines, term debt, subordinated debt, and private and public equity. The course will examine the practical details sought by capital providers, the issues that can arise, and how companies should prepare themselves to execute a financing transaction.Nov 25, 9am-5pm, Vancouver

Stay tunedFall 2010


Improving Financial Performance for Controllers and CFOsFinance professionals face increasing pressure to do things better, smarter, and cheaper. This course will help them: improve financial perfor-mance; deal with short-term issues, such asreducing expenses and increasing cash flows;change internal procedures and processes to help their businesses prosper; and understand thechanging business environment to prepare themselves for the future.Nov 9, 9am-5pm, Vancouver

Project Management – Tips & TrapsProjectmanagement(PM)istheorganizationofresources to meet specific outcomes.

This coursewill provide anoverviewofPM,explaining why and by whom PM should beused. The course will address the components of a good plan, how to organize for success, and potential barriers. In addition, some PMbest practices will be described, and the final wrap-up will include some advice on practical problemsassociatedwithPM.Oct 28, 9am-5pm, Kelowna


ManagementSuccess – From Assessment to AchievementNothingofgreatsignificancewilleverhappenifwe stay rooted in our comfort zones and only do “ordinary”work.Wesucceedwhenwecanconnectand collaborate with others. requires some critical skill sets and a workable plan of action.

This workshop will give you the structure, ingredients, and insights to help you get there.Oct 20, 9am-5pm, Vancouver

CFO’s Role in Family BusinessBeing a CFO in a family business brings significant challenge and enormous personal opportunity. Dealing with entrepreneurs and owner-managers creates a much different operating environment for a CFO.

This seminar will show you how best to apply your skills to drive success for your business. It will provide insight into how family business differs from other business, and will give you a chance to share your experiences with peers.Nov 10, 9am-5pm, Vancouver

Effective Marketing Techniques to Build Your PracticeThis course is designed to get practitioners thinking about how they can improve on what they do today to yield far better results tomorrow.

This seminar will benefit those who do little or no real marketing, as well as those who already

do some marketing. It will give you a range of ideas and tips to take back to the office and use immediately.Oct 27, 9am-5pm, Vancouver

TaxationCatching Up: 5 Years of Income Tax DevelopmentsIncome tax changes and evolves over time. Keeping up with these changes is, by necessity, an ongoing process. Unfortunately, many people don’t have the time or resources to stay current and end up having to catch up on a few years’ worth of changes at one time.

This seminar will give those who haven’t regu-larly taken tax update seminars an opportunity to get up to speed on the notable income tax developments of the past five years.Oct 18, 9am-5pm, Vancouver

Oct 25, 9am-5pm, Victoria


Nov 9, 9am-5pm, Abbotsford

Dec 3, 9am-5pm, Kelowna

GST/HST RefresherTheapplicationofGST/HSTisoftenfarmorecomplex than practitioners or businesses realize, and the harmonization of BC and Ontario in July2010furthercomplicatedthisarea.

The course will review several important concepts,including:HSTplaceofsupplyrules;taxablesuppliesanddeemedsupplies;inputtaxcredit entitlements; and some of the morecommon and important exemptions and zero-rating provisions. Overlooking these complexities can result in lost opportunities, or worse: large tax assessments.Oct 15, 9am-5pm, Vancouver

Oct 18, 9am-5pm, Prince George


Nov 1, 9am-5pm, Parksville

Nov 10, 9am-5pm, Kelowna

Nov 15, 9am-5pm, Victoria


Owner-Manager CompensationBonusing down profits of the owner-managed business has long been the most common method adopted by tax practitioners. While bonusingdown can decrease the integrated tax liability arising on the corporate profits, the owner- manager still has to pay a significant portion of thebonustoCRA.Theremustbeabetterway!

This seminar will review what’s hot and what’s not in the area of owner-manager compensation.Oct 6, 7:30-9:30am, Vancouver

Settlement Strategies in Tax DisputesThis two-hour seminar will examine various issues pertaining to settlement strategies in tax disputes. The session will be valuable to those who deal with tax disputes and wish to learn about the possible settlement strategies available to them.Oct 22, 7:30-9:30am, Vancouver

Taxation of ProfessionalsThis seminar will provide a comprehensive review of the taxation of professional corporations, including: the importance of consent and subsection 56(2) of the Income Tax Act;currentintegrationandthesmallbusinesslimit;incomesplitting;taxdeferral;thetransferofpre-existinginvestments to a professional corporation; characterization issues (partnership and personal servicebusinessincome);strategiestomaximizeentitlement to the small business limit, including advance income tax rulings; and other tax advantages (including corporate loss utilization, inter-provincial tax planning, housing loans, and IPPs),disadvantages, andchallengesmadebytheCanadaRevenueAgency.Oct 21, 9am-12:30pm, Vancouver

To Be or Not To Be:The Executor – Powers, Obligations, and LiabilitiesActing as an executor can be financially rewarding foraCAoraCAclient.However,thejobcanalso be onerous and fraught with complexity, acrimony, and personal risk.

By attending this seminar, you will learn about and examine the various stages of estate administration—from the date of death through to distribution, final accounting, and release. The seminar will also provide a thorough examination of the steps and precautions that should be taken by executors.Oct 28, 7:30-9:30am, Vancouver

PD on Audio – Now web-based and eligible for verifiable CPD hours!For more information, see the flyer enclosed in this month’s mailing or visit the PD website at www.icabc-pd.com.

For detailed course descriptions or a complete schedule of upcoming PD seminars, consult your fall 2010 PD brochure or visit our website at www.icabc-pd.com. To register, call the PD department at 604-681-3264.

24 ica.bc.ca September ’09

Plugged In: News for and about members & students

Congratulations!Kristine Bienert, CA, of the BC Utilities Commission, has been elected president of the United Way of the Fraser Valley’s board of directors. Bienert has served on the local United Way board for three years. Her first role was in 1999 as a campaign chair in Edmonton. Also joining the board is Jason VanGarderen, CA, of Meyers Norris Penny.

PricewaterhouseCoopers recently welcomed three CAs to the partnership: Nicole Clark, CA, is a partner in Tax Services, specializing in tax accounting services. Clark also assists clients in the technology, information, and communication industries with tax planning, structuring, and related services. Tim Johnston, CA, is an associate partner in Tax Services, focusing on tax planning and compliance for domestic and international mining companies. Sarah Marsh, CA, is an associate partner in Audit and Assurance, providing external and internal audit services, as well as working on business advisory projects. Marsh worked for six years in the public sector group in the UK, and continues to specialize in government and not-for-profit organizations in Canada.

David Devana, CA, became the chief administrative officer (CAO) for the Municipality of North Cowichan this summer. Devana has more than 20 years of experience in senior management positions. Prior to taking on his latest role, Devana served as director of finance and deputy CAO for the District of Sooke.

Kevin Hiebert, CA•IT, has joined ICBC in North Vancouver as a senior functional analyst and SAP Finance team lead in the IS Finance Services department. “After years of ‘extreme commuting’ to the USA for several weeks each month,” he says, “I’m glad to now work in the same city as my wife and cat.” Hiebert continues to serve on the boards of several Vancouver-based charities, including the Pacific Centre for Discipleship Association and the Quiring Chamber Music Camp. He also volunteers as webmaster of the Point Grey Inter-Mennonite Fellowship.

Bill Huxham CA, has resumed public practice and will be concentrating on serving other chartered accountants by providing monitoring, quality assurance, and mediation services.

Peter Leitch, FCA, has received an honorary doctor of law degree from Capilano University in North Vancouver. Leitch is the president of North Shore Studios and Mammoth Studios, and chairs the Motion Picture Production Industry Association of BC. Leitch has been an advocate of Capilano University, aiding in the movement to re-designate the school as a university and helping the new Film and Animation Centre acquire government funding.

Susan Mehinagic, FCA, managing partner of Grant Thornton LLP in Victoria, has been elected chair of the University of Victoria’s board of governors for a one-year term.

Announcements

FVCAA Event NoticeThe Fraser Valley CA Association (FVCAA) will be hosting a presentation entitled “Ethical War Stories” at their meeting on September 9, 2010. The event, postponed from June, will be held at the Cascade Community Centre in Abbotsford, and will feature the ICABC’s Director of Ethics, Chris Utley, CA. Register online at www.fvcaa.ca.

PRL Notice – Cancelled Licences Pursuant to its meeting of July 16, 2010, the Practice Review & Licensing Committee announces that the following firms are no longer in public practice under these names:

Firm Name CityScott Busfield, CA New Westminster

Richard G. Calkins, CA Penticton

Notice to all BC Members – 2010 ICABC AGM draft minutesThe 105th annual general meeting (AGM) of the Institute of Chartered Accountants of BC was held on June 23, 2010, at the Fairmont Hotel Vancouver. The draft minutes of the meeting are now available online at www.ica.bc.ca. If you would like to review the minutes but do not have access to the Internet, you can request that a hard copy of the draft be mailed to you by contacting the Institute office at 604-681-3264 or 1-800-663-2677 (toll free in BC).


ICABC Social Networking Group Event Recap

By Jennifer Tokarek, CA, and Angela Semeniuk, CA

On May 20, 2010, the ICABC Social Networking Group hosted an exclusive evening ofnetworking for CAs over martinis and appetizers at one of downtown Vancouver’s hotspots: theOLoungeatCoastRestaurantonAlberniStreet.The“MartiniMingler”eventwasheld

insupportoftheBCChildren’sHospitalFoundation,withmembersinvitedtodonatetothecharity.TheSocialNetworkingGrouphasbeenfortunatetoworkwithexcitinglocalvenuesliketheOLoungeto provide unique and memorable networking events for CAs. Members who attended the martini-themed spring networking evening were greeted at the entrance by an impressive ice sculpture into whichtheICABClogohadbeenhandcarved.Notonlywastheicesculptureaconversationpiece—italsodoubledasamartiniluge!Guestscouldchooseeithera“French”ora“Passionista”martini,whichthenflowedthroughtheicelugebeforelandingintheirglass.Guestsalsoenjoyedavarietyofdeliciousappetizers while mingling and getting acquainted.

We’repleasedtosaythatthiseventattractedabigcrowd,ashaveourpastevents,andthatwesawalot of new faces. More and more members from industry are becoming aware of the Group’s activities, and their increased participation enhances the networking environment for all BC members.

Events such as these provide excellent opportunities for each of us to stay in touch with an invaluable network of CA peers. They also provide huge opportunities for industry and public practice colleagues to reconnect and discuss potential new business opportunities.

September “Speed Networking” event We hope you can join us at our “Speed Networking” event, which is being held in downtownVancouveronWednesday,September15,2010.Theoutdooreventwilltakeplace,rainorshine,onthegorgeouscoveredpatiooftheMarketRestaurantintheShangri-lahotel.

For more details about this and future events, you can reach the Group’s co-chairs by emailing us at [email protected] or [email protected] (Angeline Zioulas, CA).

Jennifer Tokarek, CA, is the regional tax manager for TD Waterhouse Private Client Services in Western Canada, and co-chair of the Social Networking Group. Angela Semeniuk, CA, is the manager of tax accounting and regulatory reporting at Great Canadian Gaming Corporation in Richmond, and a member of the Social Networking Group.

Angela Semeniuk, CA, and George

Kondopulos, CA, check out the martini “luge.”

From left to right: Richard Wong, CA;

Emma Whibley, CA; John MacKenzie, CA;

and David Spicer, CA.

From left to right: Monique Van Vliet, CA;

Ingrid Morse, CA; and Steve Lux, CA.

Robyn Campbell, CA, (centre) enjoys her

first Social Networking Group event.

Organizers were gratified to see a packed

house once again.


Member Recognition Dinner 2010On June 23rd, the Institute held its 10th annual Member Recognition dinner, bringing together ICABC honourees and their family members, friends, and peers, along with Council members and Institute staff, to celebrate CA achievement. The event took place in the Pacific Ballroom of the Fairmont Hotel Vancouver, and as always, there was a great turnout.

Photos by Kent Kallberg of Kent Kallberg Studios Ltd.

The Institute’s 2009-2010 award winners (from left to right) – Standing: Elio Luongo, FCA; John Gunn, FCA; Peter Norwood, FCA; Erfan Kazemi, CA (Community Service); Norm Mayr, FCA; Gord Cummings, CA (Ritchie W. McCloy Award); Peter Leitch, FCA; Bud Kanke, FCA; Dale Barkman, FCA; Ian Petrie, FCA; Ted Robinson, CA·IFA/CBV (Community Service); Bob Wiens, FCA. Seated: Leonard Zirnhelt, FCA; Arvinder Bubber, FCA; Steve Lake, CA (Community Service); Riz Gehlen, CA (Early Achievement); Ran Clerihue, FCA (Lifetime Achievement); Joanne Hausch, CA (Community Service); David Sinclair, FCA (Lifetime Achievement); Allan Neale, FCA; and Larry Van Hatten, FCA. Not photographed: Scott Jeffery, CA (Early Achievement); Maria Pinelli, FCA, and John Webster, FCA (Community Service). Not in attendance: Bob Byford, FCA; Michael Calyniuk, FCA; Gary Chan, FCA; Nadir Mohamed, FCA; John Palmer, FCA (Lifetime Achievement); Tony Swiderski, FCA; Allan Wiekenkamp, CA (Early Achievement); and Garry Zlotnik, FCA.

Past president Doug Murphy, FCA, with Lifetime Achievement Award winner David Sinclair, FCA.

Early Achievement Award winner Riz Gehlen, CA, with the Institute’s new president, Peter Norwood, FCA.

Newly elected FCA Arvinder Bubber with client and friend Tony Singh.


Community Service Award winner Joanne Hausch, CA, with Peter Norwood, FCA.

Doug Murphy, FCA, with newly elected FCA Allan Neale.

Ritchie W. McCloy Award winner Gord Cummings, CA, with wife Yvette Franc, CA.

Newly elected FCA Ian Petrie with wife Carolyn.

Newly elected FCA Larry Van Hatten with wife Bev.

Community Service Award winner Erfan Kazemi, CA, with wife Virginia Wigmore.

Newly elected FCA Leonard Zirnhelt takes the podium.


Newly elected FCA Maria Pinelli with son Christopher, husband Paul Fletcher, CA, and daughter Vanessa.

Newly elected FCA Peter Leitch shares the evening with his proud mother.

Lifetime Achievement Award winner Ran Clerihue, FCA, with wife Lorraine.

Early Achievement Award winner Scott Jeffery, CA, with wife Laura Smith, CA.

Newly elected FCA Elio Luongo with wife Rosanna.

Community Service Award winner Ted Robinson, CA·IFA/CBV, with wife Heather.

Peter Norwood, FCA, with Community Service Award winner Steve Lake, CA.


Do you know a CA who’s gone the extra mile in the community, made an exemplary contribution to the profession, or achieved outstanding success early in his or her career? Acknowledge their achievements by nominating them for an ICABC award!

You can nominate a colleague for:Fellowship (FCA)Lifetime AchievementThe Honorary CA DesignationEarly AchievementCommunity ServiceThe Ritchie W. McCloy Award for CA Volunteerism

Nomination deadlines:•Fellowship,LifetimeAchievement,HonoraryCA:October 15, 2010•EarlyAchievement:November 1, 2010•CommunityService:January 31, 2011•RitchieMcCloyAward:January 31, 2011 Nomination forms Forms are available on the Institute website at www.ica.bc.ca under Member Centre/Forms and Dues/Member Recognition/Nomination Forms.

The ICABC Member Recognition Program

Nominate a Peer for ICABC FellowshipCall for FCA NominationsEach year, members are asked to identify peers who have provided outstanding service to the profession and/or brought distinction to the profession, and to nominate these individuals for election to the Institute’s Fellowship. The Fellow Chartered Accountant (FCA) designation recognizes a CA’s leadership and outstanding performance in at least two of the areas detailed in number three of the official procedures below.

TheFCAnominationformisavailableinbothPDFandWordformatontheInstitute’swebsiteatwww.ica.bc.caunderMemberCentre>Forms>MemberRecognition>NominationForms>FellowshipDesignation. Alternatively, you can access the form directly at www.ica.bc.ca/pdf/fca_nomination.pdf orbycontactingSandyParcher,manageroftheInstitute’sExecutiveOffice,[email protected] or 604-488-2602.

NominationformsmustbereceivedattheInstituteofficenolaterthanOctober15,2010.

Procedures for the Election Of Fellows1. NominationsfortheelectionofFellowsshallbesoughtfromallmembersoftheInstituteandthe

FCANominatingCommittee.

2. Nominationsshallbesubmittedviaanapprovednominationformsignedbyaproposerandtwoseconders.

3. Nominatorsmustdemonstratethattheirnomineehasshownleadership,givenoutstandingservicetothe profession, or brought distinction to the profession in the following areas:*

a) IntheworkoftheBritishColumbiaoranotherCanadianInstitute; b)In theworkof anAssociationhavingobjectives relating to the candidate’s chosenbusinessor

profession; c) Inthepursuitofhis/hercareerasanowner,employee,orasacorporatedirector; d)Inservice(civic,community,political,ornot-for-profitorganizations); e) In research, teaching, writing, or speaking on professional matters.

*Except in extraordinary circumstances, the nominee must have provided leadership and service with distinction in more than one of these areas.

4. The fullest possible information on the nominee is to be provided, together with reasons why he/she should be considered for Fellowship, supplemented by additional comments where necessary. To be recognized as having brought distinction to the profession, the member must have been clearly identified as being a Chartered Accountant while performing the activity cited. In addition, service must have been rendered while the nominee was already a member of the Institute of Chartered AccountantsofBritishColumbiaoranotherCanadianInstitute.Proposersorsecondersmaywishtocontact the assistant, spouse, or business associate(s) of the candidate, or the candidate directly, if additional information is required for certain sections of the form.

5. SittingmembersofCouncil,exclusiveoftheInstitute’sFirstVice-President,arenoteligibletobeelected Fellows.

6. An FCA designation may be awarded posthumously only if the candidate dies after the Member RecognitionCommittee recommends theawardingofhis/her fellowship.AnexceptionmightbemadeifanoutstandingcandidatediesbeforethenextMemberRecognitionCommitteemeeting,incircumstances where the Executive Committee refers that individual to the current Member RecognitionCommitteeforitsconsideration.

7. NominationformsshallbesubmittedtotheMemberRecognitionCommittee,consistingof a minimum of five members. The Chair of theMemberRecognitionCommitteeshallbean FCA appointed by Council at its Julymeeting, and he/she shall select his/her Committee at his/her discretion from the Fellowship. The Member RecognitionCommittee must always include a past president of the Institute.

8. The Chief Executive Officer should attend all meetings as staff liaison and resource person.

9. The procedures for the election of Fellows are to be published in the September issue of Beyond Numbers, with a view to educating the members on the election process and eliciting nominations.

10.NominationsshallbesoughtbetweenAugust1 to October 15 inclusive each year.

11. The Chief Executive Officer shall review each nomination form, deleting information known to be in error, and adding information known to be omitted. If necessary, the Chief Executive Officer shall contact the proposer or seconders for additional information.

12. The Committee shall perform the following duties:

a) Reviewthenominationsreceivedfromthemembers,acceptorrejectthem,andcorrectoraddtodatasubmitted;

b)Prepare its ownnominations, asdeemednecessary;

c) Ensure that all nominations have been vetted by the Chief Executive Officer for disciplinarymatters;and

d)Present a slate of award nominees toCouncilforapproval.Note:Councildoesnot conduct individual ballots on each candidate.

13.The Chair of the Member RecognitionCommittee shall report to Council during an in-camera session on the process undertaken by the Committee and on the results of its deliberations.ReviewsofFCAcandidatesareto include information regarding any viola-tions of the Rules of Professional Conductthrough the disciplinary process, regardless of when the offences occurred, except in cases where an anonymous Determination and Recommendation was issued more than two years prior to the FCA review and was accepted by the member cited.



14. All Council members shall vote on the slate of nominees presented by the Member Recognition Committee. At least 70% ofCouncil members must vote in favour of the slate of candidates for any candidate to be elected. If the government-appointed public representative(s) deem(s) it appropriate to withdraw from the voting, the withdrawal will not represent an abstention, and Council will be regarded as complete without his/her/their participation.

15. An announcement regarding the successful candidates shall be made to Council as soon as the result is known. Those elected shall be informed immediately. The ICABC mem-bership and the media shall be advised of the results of the election as soon as conveniently possible.

16.Proposersofunsuccessfulcandidatesshallbeadvised of the candidate’s lack of success at either the nomination stage or the election stage (without disclosing which) by the Chair oftheMemberRecognitionCommitteeand/or a member of this committee as delegated by its Chair.

17.Nomination forms for those members notelected shall, on the recommendation of the outgoingMemberRecognitionCommittee,be brought forward to the incoming Com-mittee the following year for consideration. The outgoing Committee will forward appli-cable forms to the incoming Committee, with a transmittal letter, and the incoming Committee will be responsible for contacting the original proposers for the purpose of updating the information.

18.TheMemberRecognitionCommittee shallmeet again in late spring or early summer for the purpose of preparing a list of potential nominees for submission to the incoming Committee, which will then be responsible for preparing and processing the forms.

Last revised December 2009

$110,000 – Senior Controller

A CA who has gained a majority of their

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A senior level student who is nearing

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The Perils of Blind FaithBy Chris Utley, CA Director of Ethics

In the last few years, we’ve heard tell of a variety of schemes and promotions, all designed to raise money for the public flota-

tion of one corporation or another. Often these schemes and promotions involve resource companies, and lately we’ve seen investment schemes branch into the area of environmental or“green”technologies.Highratesofreturnarepromised, and the benefits of “getting in on the ground floor” are touted, and time and time again, investors readily provide cash in the hopes of gaining quick and generous returns.

As we’ve seen rather too often, some of these companies don’t make it to market, leaving investors out of pocket. Unfortunately, this happened recently to a company led by a CA. And although unaware of some inflated promises made to investors, this CA subsequently foundhimselffacingthePCEC.

The situationSince becoming a CA in 1984, Wilson* hasspent the bulk of his career working with public companies.InSeptember2005,WilsonandhispalDonald,*aCPA,startedacompanybasedinHong Kong called Fresh Water Technologies(FWT).Theybecamethecompany’sdirectors,withWilsonalsoassumingtheroleofCEOandDonald assuming the role of treasurer.

The company lay dormant for one year, after which the two partners issued a management insiderblockof275millionsharesat$0.0001HKper share. Wilson entrusted Donald with theresponsibility of providing the relevant corpo-rate and financial data for the preparation of the registration statements to be filed with the SECintheUS.HealsoaskedDonaldtohelpfind investors for an upcoming acquisition: eight million shares of a company called Hydro

Ethical Dilemmas Green,apubliclylistedcompanyonboththeTSXVentureExchangeandtheNASDAQOver-the-CounterPinkSheetExchange.HydroGreenheldtherightstoaninterestingnewwaterpurificationtechnology that had far-reaching applications, especially in Asia, where the provision of sanitary sewer infrastructure was (and remains) inconsistent.

Donaldmadeabigpitchtosomehigh-profileHongKonginvestors,andthroughthefallandwinter of2006,FWT successfully raised$15millionHK—agoodportion resulting fromDonald’s efforts.Unbeknownst to Wilson, however, Donald had promised his investors that FWT would go publicwithin 12 months, increasing their investments ten-fold.

InMarch2007,FWTenteredintoanagreementwithHydroGreentoobtaintheexclusivedistributionlicenceforthewaterpurificationtechnology.Aspartofthisagreement,FWTpaidacashamountof$1.5millionCdnfor3.5millionsharesofHydroGreen,andalsogave50millionsharesofFWTtoHydroGreeninexchangefortherightstothetechnology.ByDecember2007,FWThadpurchasedenoughsharestoown15%ofHydroGreen.

What happenedInMarch2008,Donaldrealizedhe’dbeenoverlyoptimisticinhisprojections,sohearrangedameetingwithsomeofFWT’sinvestorstobuysometime.WilsonremainedunawareofDonald’sactions.

Allwould sooncome to light,however.ByApril2008,FWT’scorporate structurehadbegun tounravel—no products had been produced or distributed, investors were becoming increasingly edgy, and the SEC approval process was bogged down. Then the market crashed.

Thenetresult?InMarch2009,HydroGreenreportedtoshareholdersthatitwasoutofcash,with$2.5millioninpayables.Ofcourse,thisbadnewsreverberatedtoFWT,andthepartywassoonoverforWilson,Donald,andFWT’sshareholders.

Madeline* was one of these shareholders. Through Donald, she’d invested a substantial sum in both FWTandHydroGreen;infact,herpersonalstakeintheformerwasalmost5%.Earlyin2010,shecontactedtheInstitute,claimingthatWilson—astheCEOofFWT—wasresponsibleforanumberofbreaches;theseincludedmisfiledformsandfinancialreports,anarbitraryexerciseofauthority,poorjudgmentconcerningcorporateacquisitions,andnon-existentcorporateoversightmechanisms.

APCECinvestigationwaslaunched.InresponsetoMadeline’sallegations,Wilsonsaidthefilingswere late—notmisfiled.Hesaidthe

timelagwascausedbyDonald’sresignationasdirectorandtreasurerofFWTinJuly2009,andbychangestheSEChadmadetoitsfilingprocedures.Healsopointedoutthattherewasnostatutoryregulation requiring FWT to file quarterly statements. In addition, Wilson said that FWT had requested filing extensions from the Securities Commission, and that this had resulted in cease trade orders being imposed on both companies. He added that the severe drop in the stock market hadworsenedthesharevaluation.Finally,hetoldthePCECthathehadprovidedshareholderswithinformation,inwriting,aboutthestrugglesFWTexperiencedingoingpublic.

WilsonacknowledgedthatthemarketdeclinehadsentthestockpriceofHydroGreenbelowtheprivateplacementprice,whichhadmadetakingFWTpublicatenuousproposition.Healsoacknow-ledged that he’d entrusted Donald with too much responsibility, and admitted he’d been unaware of his former partner’s representations to some of their investors.

The outcomeThePCECconsideredwhetherWilsonhadcontravenedRulesofProfessionalConduct201.1(Maintenanceof theReputationof theProfession),202 (Integrity andDueCare), and205 (FalseorMisleadingDocuments&OralRepresentation).Intheend,thePCECconcludedthattherewerenogroundstosupportacomplaintagainstWilson.

Nonetheless,thereisalessontobelearnedhere.WilsongenuinelyplannedtotakeFWTpublic,butby relying rather blindly on his partner and friend, he found himself in the uncomfortable position of defending his actions before a committee of public representatives and his peers as part of the discipline process.

Comments or questions? Contact me at [email protected].

*Please note: This fictionalized account is based loosely on an actual case before the PCEC (Professional Conduct Enquiry Committee). Names and circumstances have been changed to preserve anonymity. The contents of this article are only intended for the general guidance of readers. The PCEC deals with each case individually, based on its specific facts and circumstances.

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