OTN - CARICOM-Canada Professional Services Brief


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OTN - CARICOM-Canada Professional Services Brief

  1. 1. CARICOM-Canada Trade and Development Agreement TradeBrief The Export of Professional Services in the Context of the CARICOM-Canada Trade & Development Agreement: Opportunities & Challenges1 Introduction For the rest of the world, Canada is a tangible services import market. Just for reference, in 2008, Canadians spent over US$87bn on services imports, and this spending grew by an average of over 10% per year between 2004 and 2008 signalling some import dynamism. In 2008, Canada’s largest professional services import sectors included: Business and management consultancy services (US$4.2 bn); Architectural, engineering and technical consultancy (US$2.7bn); Computer services (US$1.6bn); and Legal services (US$826mn). Canada’s most dynamic professional services import sectors include architectural, engineering and technical consultancy (15% growth in import spending between 2004 and 2008); legal services (14.2%); and education services (13%). The rest of the world is increasingly penetrating Canada’s professional services market and exploiting specific business opportunities. Existing services data shows CARICOM trade with Canada primarily in financial services and tourism, travel and business services, which includes professional services. However, other types of activities are occurring through various modes of delivery though there is relatively less CARICOM services export through commercial presence in Canada. Further information on these activities should be obtained through consultations and research, and business support organisations and professional bodies such as CAIC have an important role to play. The OTN is also trying to improve the information available on CARICOM-Canada services trade at the provincial level through a study scheduled for completion in August 2010. Caribbean Professional Services Overview I am now going to spend a brief moment outlining Canada’s framework for market access for our legal services, accountants, architects and engineers as these seem to be priority areas of export interest. 1 Excerpts of Presentation made by OTN’s Private Sector Liaison, Mr. Lincoln Price at the 5th Annual Private Sector Meeting/Dinner with CARICOM Ministers of Trade and Ministers of Finance, June 12th 2010 at Rex Resorts, Grenada OTNBARBADOSOFFICE 1 st Floor, SpeedbirdHouse,Bridgetown BB11121, BARBADOS Tel:(246)430‐1670 Fax:(246)228‐9528 Email:barbados.office@crnm.org OTNJAMAICAOFFICE 2 ND Floor,PCJBuilding,Kingston5, JAMAICA Tel:(876)908‐4242 Fax:(876)754‐2998 Email:jamaica.office@crnm.org Ref: 31000. 6-2010-10-03
  2. 2. Page 2 www.crnm.org CARICOM-Canada Trade and Development Agreement Legal Services Legal services in Canada are provided by lawyers, notaries (in Quebec), and foreign legal consultants. In December 2005, the 11 provincial and 3 territorial law societies of Canada had approximately 98,000 member lawyers and notaries. To practice law in Canada requirements include admission to one of the law societies, each setting its own rules, ethical standards and codes of practice. In the province of Alberta, members of a law society are required to be permanent residents in Canada. Lawyers from different provinces and territories may exercise mobility across provinces provided they meet the requirements of the legal profession’s National Mobility Agreement or the Territorial Mobility Agreement. The National Mobility Agreement sets common principles to govern the temporary and permanent (transfer) mobility of lawyers among common law provinces (Quebec is the only non-common-law province). Internationally trained individuals may have their legal credentials evaluated by the National Committee on Accreditation, a standing committee of the Federation of Law Societies of Canada (FLSC, or by the equivalent accreditation body of Quebec, for admission to one of the Canadian law societies. The Committee also evaluates qualifications from Quebec for the purpose of entry into the bars of the common law provinces. Foreign lawyers may be licensed as foreign legal consultants to provide legal advice only on the law they are permitted to practise in their home jurisdiction. Accounting Services There are three main professional accountancy titles in Canada: Chartered Accountant (CA), Certified Management Accountant (CMA), and Certified General Accountant (CGA). At end 2005, there were some 72,000 CAs, 37,000 CMAs, and 42,000 CGAs. Each title is regulated and protected by provincial legislation under a provincial body, and is represented at the national level by its respective national professional body. To provide accountancy services as a CA, CMA or CGA, it is necessary to be a member of, or licensed by, one of the registered professional bodies in the province where the practice is to take place. A mutual recognition agreement (MRA) of CA qualifications was signed in 2002 by the accounting professions of Canada, Mexico, and United States. The three Governments issued a statement encouraging their respective competent authorities to implement the agreement in a manner consistent with NAFTA. Additional MRAs for CA qualifications have been signed by Canada Institute of Chartered Accountants (CICA) with professional accounting bodies in England and Wales; Scotland; Ireland; South Africa; New Zealand; Australia; Hong Kong, China; Belgium; France; Mexico; and the United States. CMA Canada has established MRAs with two professional accounting associations in the United Kingdom.2 In December 2006, CGA-Canada signed a global MRA with the international accountancy body, the Association of Chartered Certified Accountants (ACCA). CGA-Canada has also signed Memoranda of Understanding with several professional accountancy bodies world-wide. Architectural and Engineering Services The professions of architect and engineer are individually regulated at the provincial/territorial level and a licence is required for the provision of either service. Licences are issued by the respective provincial association of architects and engineers, whose requirements vary between provinces/territories. A licence is valid only for that specific 2 The two U.K. professional accounting associations are: the Chartered Institute of Management Accountants and the Chartered Institute of Public Finance and Accountancy.
  3. 3. Page 3 www.crnm.org CARICOM-Canada Trade and Development Agreement jurisdiction. However, in the engineering profession, a mobility agreement among provinces/territories, called the Inter-Association Mobility Agreement, allows engineers licensed in one jurisdiction in Canada to obtain a full licence in another jurisdiction. Foreign architects wishing to obtain a licence must have their academic qualifications certified by the accrediting body, the Canadian Architectural Certification Board (CACB). Foreign architects may also apply for a temporary licence to practice in collaboration with a registered architect of the given province. Licences are for one specific project and must be renewed after one year. There are no residency requirements to obtain an architectural licence. Foreign engineers wishing to obtain a licence must have their academic and experience qualifications assessed by the relevant provincial engineering association. Temporary licences are not linked to a specific project, but are for one-year and renewable, except in Quebec where the temporary licence is project-specific. To practice under a permanent licence, citizenship or permanent residency is required in Alberta, British Columbia, New Brunswick, Ontario, and Saskatchewan. Several mutual recognition agreements (MRAs), signed by the different regulatory bodies cover the architecture and engineering professions. An agreement under NAFTA exists for engineers. The Canadian Council for Professional Engineers has also negotiated MRAs with professional engineering bodies in France (La Commission des Titres d'Ingénieur) and Hong Kong, China (Hong Kong Institute of Engineers). For architects, a Canada-United States Inter-recognition Agreement signed between the Committee of Canadian Architectural Councils (CCAC) and the U.S. National Council of Architectural Registration Boards (NCARB) grants reciprocity to 55 jurisdictions in the United States and 11 jurisdictions in Canada. In October 2005, the CCAC also signed a Tri-National Mutual Recognition Agreement for International Practice with the United States and Mexico, which provides for the recognition of credentials between the three countries. On this note, we are pleased that we have obtained some funding for assistance with negotiating MRAs for the Architects and engineers under the EPA. Hence, our capacity for negotiating MRAs will be improved, enhancing our prospects of negotiating MRAs with Canada in the future. CARICOM Positions on Exports of Professional Services to Canada Now let me spend a few moments on CARICOM’s position on exports of professional services to Canada within the framework of a CARICOM-Canada Trade and Development Agreement. CARICOM has examined Canada’s commitments and planned commitments/offers in the World Trade Organisation and determined that these should set the floor for Canada’s market opening to CARICOM in the context of a bilateral agreement. In addition, CARICOM has noted that Canada’s bilateral agreements are significantly more liberal, and include for example a general obligation to disallow any requirement for commercial presence or residency as a condition for cross-border services supply of a service, although reservations could be made. In addition, Canada’s bilateral also encourage MRA negotiation and include guidelines for the negotiation of MRAs based on the NAFTA model. MRAs sets out, among other things, accreditation, licensing and registration; eligibility for registration/licensure in the export market; as well as information exchange, and; dispute resolution. Although Canada’s proposed text provides that commitments in the agreement would apply at the sub-national level, CARICOM Member States recognise that the federal nature of Canada provides specific challenges for effective market access in Canada and reviewed a recent study commissioned by the OTN on Regulatory Regimes at the Provincial Level that Limit Effective Market Access for Services in Canada. The study covers accounting, auditing, bookkeeping, architecture, engineering, management consulting, tour operators and travel agency services, and entertainment services. Member States have noted that signature of an FTA by the federal government of Canada does not necessarily bind provinces and that some provinces and sectors are more open than others. The member
  4. 4. Page 4 www.crnm.org CARICOM-Canada Trade and Development Agreement states have further noted the possible need to focus on specific sectors and specific Canadian provinces in identifying trade prospects under the agreement. The Member States identified several provincial restrictions on market access and national treatment identified in the study that could be the subject of CARICOM requests to Canada. These include: 1. removal of residency, citizenship requirements, and joint venture requirements; 2. introduction of temporary licensing for CARICOM architects in those provinces that do not have such a system; 3. recognition of CARICOM services suppliers certified in one Canadian province in other Canadian provinces; 4. exemption from examination fees for engineers; 5. acceptance of CARICOM work experience to meet accreditation requirements as done for engineers in British Columbia; and 6. market access and national treatment for technicians, as done in the Canada-Peru FTA. The Member States have noted that other requests could be made in the context of development cooperation; such as, • waivers for professional registration and license fees; • licensing of CARICOM professionals for work on specific projects in partnership with Canada as done for Architects in Alberta; • facilitation of business-to-business matching where joint venture requirements are maintained by Canada; and • facilitation of increased contact with Canadian counterpart bodies. The Member States have proposed that Mutual Recognition Agreements could be useful in facilitating services exports from the Caribbean to Canada and that the eventual CARICOM-Canada agreement should include more detailed provisions relating to such MRAs than was included in the EPA. Member States have stressed that CARICOM should seek commitments from Canada at all levels of Government, particularly since such challenges did not arise for Canadian service providers seeking to trade in the Caribbean. CARICOM service providers could also be effectively disadvantaged in the Canadian market because of the cost and time associated with the approval process in the Canadian provinces for the provision of services by CARICOM service providers. Furthermore, The Member States have noted that most CARICOM nationals require a visa to travel to Canada and that the requirement acts as an impediment to CARICOM services providers supplying services in Canada via the temporary movement of natural persons. The Member States are proposing to seek cooperation on visa and immigration issues to the extent feasible, while recognizing that traditionally immigration matters are outside the scope of trade agreements. Development In discussing the area of development as it relates to services, The Member States have noted that the approach taken by Canada in its previous FTAs, was either very limited or very broad, which erects various challenges for project implementation flowing from the provisions of the agreement. The member states also consider the previous statements from Canada in the context of the preliminary interchanges which were not supportive of the development approach favoured by CARICOM. It is proposed that gap analysis be conducted to ensure that there is no overlap between specific proposals to be made by CARICOM and development-related actions that were either already contemplated or being implemented by CIDA or any other Canadian donor vehicle. Member States also reiterate the
  5. 5. Page 5 www.crnm.org CARICOM-Canada Trade and Development Agreement importance they placed in the regional strategic plans to be developed further to the July 2009 Regional Symposium on Services and on the need to link regional and national projects. Conclusion In closing, external trade negotiations play a key role in attempting to reduce the transaction costs of doing business internationally for our lawyers, accountants, nurses, software developers, teachers and other professional service suppliers, and it is important that the end users of these agreements continue to inform the negotiations, or begin to participate. In the area of professional services, national services coalitions are at differing levels of operation. As such, the approach to professional services in these negotiations are in need of a central interlocutor, and it is hoped that the CAIC will seek to play this coordinating role in the same way that it does, and has been recognised by COTED for the merchandise sector. For example, one starting point is the indication of the specific professional services market access interests of member states. This is a basic input that member states are having some difficulty articulating to date, and may signal the need for private sector involvement. ****************