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Professional Services
Background Information
The professional service sector which includes accountancy services, architectural services, engineering services and foreign legal consultancy services accounted for nearly $4 billion in export revenues in 2000. Over 290,00 people are employed in Canada in the various services that make up the professional services sector.
On legal services, the Federation of Law Societies of Canada (the umbrella organization of the 14 governing bodies of the legal profession) reported that as of December 31, 2002, it had a total of 85,272 members, with the majority concentrated in Ontario, Quebec and British Columbia. The Canadian legal services industry is composed of 53 firms with more than 50 lawyers, over 4,250 firms with 2-25 lawyers and over 13,500 sole practitioners. Total revenue from export activities was $439 million in 2000. Two-thirds of that activity was with the United States; the other third was distributed among other countries such as the United Kingdom and Hong Kong.
The public accounting industry in Canada is characterised by a few very large national accounting firms, a number of medium-sized regional firms and numerous smaller local firms and sole practitioners. There were approximately 120,000 people employed as financial auditors or accountants in Canada in 2000. The Canadian Institute of Chartered Accountants, together with the provincial and territorial institutes, currently represent a membership of 60,000 professional accountants in Canada and Bermuda. CGA Canada is the association for the 56,500 certified general accountants and CGA students, while the Society of Management Accountants of Canada represents more than 29,000 CMAs and over 3,500 CMA candidates in Canada. Statistics Canada reports that export revenues for the accounting industry in 2000 totalled $2.8 billion (includes other management services which includes management consultants).
The architectural services industry comprises about 3,500 private firms and employs 11,500 workers, plus approximately 7,000 registered architects. Statistics Canada estimates total industry revenues in 2000 at $1.2 billion. Although Statistics Canada data appear to exclude some sole proprietorship and other small or part-time practices, they capture the activities of the main producers of architectural services. The architectural industry is almost wholly Canadian owned. Most architectural firms are small; according to a recent survey by the Ontario Association of Architects, three quarters of the provincial firms have fewer than 5 full-time employees (excluding principals), and only 6 percent have more than 10 employees. Firms in British Columbia tend to be larger than average. In Alberta, 78.5% of architectural firms are in the 10-24 Employee ranges, with the remainder being under 10 employees.
The engineering industry has traditionally been one of Canada's strongest and most internationally competitive service industries. Currently, Canadian firms rank third in the world in export revenue with firms providing services in more than 125 foreign markets. Main export markets are Asia and Africa (50%), the United States (30%) and Europe and South America (20%). Approximately one-third of the industry's annual revenues are generated by exports. Engineering services account for nearly half of the export revenues of the professional services sector. Exports for engineering services have grown by more than 20% over the last five years, with the industry contributing nearly 1.2% of Canada's Gross Domestic Product. Definition of sector in the GATS
The classification system that is used in the GATS by most WTO members, divides Professional Services into the following overall five categories:
- Legal consultancy services;
- Accounting, auditing and bookkeeping services;
- Architectural services;
- Engineering services;
- Integrated engineering services.
The category of Accounting, auditing and bookkeeping services is further sub divided, as follows:
- Accounting and auditing services;
- Financial auditing services;
- Accounting review services;
- Compilation of financial statements services;
- Other accounting services;
- Bookkeeping services, except tax returns.
The category of architectural services covers the following services: (not including those classified under urban planning and landscape architectural services)
- Advisory and pre design architectural services;
- Architectural design services;
- Contract administration services;
- Combined architectural design and contract administration services; and
- Other architectural services.
Engineering services covers engineering services and integrated engineering services. Engineering services are sub-divided into:
- Advisory and consultative engineering services;
- Engineering design services for the construction of foundations and building structures;
- Engineering design services for mechanical and electrical installations for buildings;
- Engineering design services for the construction of civil engineering works;
- Engineering design services for industrial processes and production;
- Engineering design services;
- Other engineering services during the construction and installation phase; and
- Other engineering services.
Legal services is sub divided into:
- Legal advisory and representation services concerning criminal law;
- Legal advisory and representation services in judicial procedures concerning other fields of law;
- Legal advisory and representation services in statutory procedures of quasi judicial tribunals, boards, etc.;
- Legal documentation and certification services; and
- Other legal and advisory information.
What We Heard in Previous Consultations
Priority Markets
The priority export markets vary slightly by industry.
For legal consultancy services, the priority export markets identified to date are:
- United States
- European Union member States (focus on the United Kingdom)
- Hong Kong
For accountancy services, the priority markets identified to date are:
- United States
- European Union Member States
- Japan
- Latin America
For architectural services, the priority markets identified to date are:
- United States
- European Union
- Japan
- China
- Latin America
- Taiwan
- Korea
- Caribbean (Trinidad & Tobago, Jamaica and Guyana)
- ASEAN
For engineering services, the priority export markets identified to date are:
- Japan
- European Union
- China
- Russia
- United Arab Emirates
- Middle East
- Latin America
- ASEAN
Market Access Barriers
For legal consultancy services, no specific information has been reported to date as regards the identification of barriers to trade. However, three issues of concern for legal consultancy services were identified for the negotiations:
- restrictions on forms of association;
- scope of practice rights;
- domestic regulation (licensing and qualification requirements and procedures).
For accountancy, architectural and engineering services, no specific information has been reported to date as regards the identification of barriers to trade
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