Canada is the second largest destination for United States accounting service exports and the third largest source of imports of accounting services to the United States. According to Statistics Canada, the operating revenue of the accounting, tax preparation, bookkeeping and payroll services industry in Canada increased by 5.2% to $21.4 billion in 2019.1 While overall revenue increased, the industry as a whole experienced a modest decline in profit margins year over year - from 27% to 26.8% - based on increases in operating expenses which rose 5.5% to $15.7 billion. The accounting industry in Canada is relatively concentrated, with the top 10 companies representing 47% of operating revenue across the industry. Regionally, the distribution of operating revenue across the industry is spread primarily between Ontario (43.5%), Quebec (19.4%), British Columbia (14.7%), and Alberta (13%).
According to the OECD’s Services Trade Restrictiveness Index (STRI), which measures certain countries’ trade restrictiveness by services sector on a scale of relative openness, Canada’s accounting sector is relatively more open to foreign service providers than the average of the 48 countries evaluated in the STRI.2 Canada’s STRI score on accounting services in 2020 was 0.22, on a zero to one scale (with zero representing an open market and one representing a market completely closed to foreign services providers).3 In 2019, a majority of trade barriers in Canada’s accounting sector were restrictions on foreign entry and restrictions to movement of people.4
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––-
1 Statistics Canada, “Top Ten Companies Drive Growth in the Accounting Services Industry in 2019,” November 30, 2021. Available: https://www150.statcan.gc.ca/n1/daily-quotidien/201130/dq201130e-eng.htm.
2 Organization for Economic Cooperation and Development, “OECD Services Trade Restrictiveness Index (STRI): STRI Sector Brief: Accounting Services 2020,” January 2021. Available: https://www.oecd.org/trade/topics/services-trade/documents/oecd-stri-sector-note-accounting.pdf.
3 Organization for Economic Cooperation and Development, “Compare Your Country: Services Trade Restrictiveness Index.” Available: http://www.compareyourcountry.org/service-trade-restrictions. Organization for Economic Cooperation and Development, “Services Trade Restrictiveness Index (STRI): Legal and Accounting Services,” November 4, 2014. Available: https://www.oecd-ilibrary.org/trade/services-trade-restrictiveness-index-stri-legal-and-accounting-services_5jxt4nkg9g24-en.
4 Organization for Economic Cooperation and Development, “OECD Services Trade Restrictiveness Index (STRI): Canada 2019,” December 2019. Available: https://www.oecd.org/trade/topics/services-trade/documents/oecd-stri-country-note-canada.pdf.
