View the most recent version.

2006 survey detailed results

Operating revenue

The Canadian accounting services industry enjoyed another prosperous year in 2006. Operating revenue reached $11.1 billion in 2006, up 12.1% over 2005. This jump comes on the heels of substantial growth of 13.7% in 2005.

In 2006, firms for which the primary activity is the delivery of accountant services (NAICS 541212) accounted for 82% (84% in 2005) of the industry’s operating revenue. They were followed by firms for which the primary activity is bookkeeping and payroll services (NAICS 541215) and tax return preparation services (NAICS 541213), which respectively generated 13% (12% in 2005) and 5% (4% in 2005) of industry operating revenue. Notwithstanding these slight variations, the proportions have remained steady from year to year.

Operating revenue by province

Western Canada, and Alberta (+25.4%) and British Columbia (+14.2%) in particular, reported substantial growth in operating revenue in 2006. In comparison, increases were much more modest in Quebec (+10.5%) and Ontario (+9.0%).

The Canadian accounting services industry is dominated by firms in Ontario as they earned almost half (44.0%) of the industry’s national operating revenue in 2006. The share held by both Alberta (from 12.3% to 13.8%) and British Columbia (from 13.7% to 14.0%) rose between 2005 and 2006. During this same period, Quebec (from 19.7% to 19.4%) and Ontario (from 45.2% to 44.0%) both lost ground.

Sales by type of goods and services

Based on the “survey” data (which excludes estimates derived from administrative sources), no less than 57% of the industry’s sales in 2006 came from audit, assurance, compilation, review, bookkeeping and payroll services. This was followed by tax return preparation, tax planning and consumer tax management services (25%), consulting, marketing, human resource and executive recruitment services (7%), and other sales of goods ans services (11%).

Operating expenditures

In 2006, the industry’s operating expenses reached $7.8 billion, up 12.9%, slightly larger than the 12.1% growth in operating revenue.

Salaries, wages and employee benefits represented 52% of the industry’s total operating expenses, a proportion that has remained relatively unchanged since 2003.

Based on the “survey” data (which excludes estimates derived from administrative sources), salaries, wages and employee benefits is the only major category of operating expenses (accounting for 55%); the remaining 45% of operating expenses fall into a number of other expenditure categories.

Operating profits

Expressed in percentage, the industry’s operating profit was 29.6%, down from 30.1% in 2005. Since 2001, operating profit has remained quite stable, ranging between 28.8% and 30.2%.

From 2005 to 2006, operating profit rose substantially in Alberta (from 26.2% to 30.6%) but fell in most other provinces.

Industry’s 20 largest firms

The accounting services industry consists of a small number of high-revenue firms and a large number of more modest-revenue firms. Year after year, the 20 largest firms account for half of the industry. These firms generated 49% of the industry’s operating revenue, expended 49% of its operating expenses and earned 47% of its operating profit. These proportions are almost identical to those reported in 2004 and 2005.

The 20 largest firms posted 9.1% growth in operating revenue in 2006, well below the 15.1% increase reported by all other firms in the industry. This performance is a reversal of the situation in 2005.

Expressed in percentage, the operating profit in 2006 was less for the 20 largest firms (28.7%) than for the other firms (30.6%). This situation is similar to that found in 2004 but in contrast to that of 2005.

Client base

According to the 2006 “survey” data, almost all (99.6%) of the industry’s sales were to clients in Canada. Of these sales in Canada, the vast majority were directed to the business sector.