Provincial CPA rules on contingent fees

1Summary

Canada regulates accountants province by province. Each provincial body of Chartered Professional Accountants (CPA) publishes its own code of professional conduct, and the codes we were able to open contain a rule on contingent fees numbered Rule 215.1234 The rule has two parts. The first forbids a contingent fee for a short list of services: work that requires independence under Rule 204, compilation engagements and, in most versions, the preparation of an income tax return. The second permits a contingent fee for any other professional service, provided the client agrees in writing to the basis for the fee before the engagement is substantially complete and the arrangement does not impair objectivity on other work for the same client.1

The codes do not mention the Scientific Research and Experimental Development (SR&ED) program. An SR&ED claim is made on a prescribed form, Form T661, which the Canada Revenue Agency (CRA) asks claimants to file with their income tax return.56 Whether preparing that form is "preparation of an income tax return" for the purpose of Rule 215 is not answered by the text of the codes.

Separately from the professional codes, federal law has required since 2014 that every SR&ED claim identify each paid claim preparer and the billing arrangement, including whether a contingency fee was used.78 This paper describes those rules, the one published disciplinary record we found that concerns an SR&ED engagement, and the gaps in what we could confirm. It is factual only and makes no recommendation for Canada.

2Scope and method

2.1What this paper covers

The paper covers the conduct rules that provincial CPA bodies apply to their members and registrants when they charge fees that depend on an outcome. It also covers the federal disclosure rule for SR&ED claim preparers, because it is the only part of the Canadian system that records contingency fees on SR&ED claims as a matter of law.

It does not cover the rules of other professions, such as lawyers, and it does not cover advisers who are not members of a CPA body. The CPA codes bind CPA members and registrants. They do not reach a person who prepares SR&ED claims without holding a CPA designation.

2.2Sources

We read the codes directly from the websites of the provincial bodies. For each code we record the version date printed on the document, because several of the copies we found are older than the date of this paper and may since have been amended. Where we could not open a code, or could open only an older version, we say so and mark the point for checking.

The federal material comes from the Income Tax Act as published by the Department of Justice, the CRA's guide to Form T661, and the Budget 2013 annex in which the claim preparer disclosure rule was first proposed.5768

2.3What we did not find

We did not find any provincial code that names SR&ED, any published guidance from a provincial body on contingent fees for SR&ED work in particular, or any official data on how many SR&ED claims are prepared for a contingency fee. The CRA collects billing arrangement information on Form T661, but we found no publication of aggregate figures from it. Where data does not exist in an official source, this paper does not estimate it.

3The common Rule 215

3.1Definition of a contingent fee

The codes we opened define a contingent fee in the same words: "a fee that is calculated on a predetermined basis relating to the outcome of a transaction or the result of services performed by the member or firm."1 The definition then excludes a small number of fees, including a fee fixed by a court or other public authority, fees for insolvency work and fees for administering trusts or estates that are based on a percentage of realizations or assets under administration by statute or tradition.1

A fee calculated as a percentage of the investment tax credit (ITC) that an SR&ED claim produces would fall within the wording of this definition, because it is calculated on a predetermined basis relating to the result of the service. The CRA's own guide uses the same idea when it describes billing arrangement code 1 as "a contingency fee as a percentage of the investment tax credit earned."6

3.2The prohibition in Rule 215.1

In the Ontario code, Rule 215.1 provides that a member or firm engaged in the practice of public accounting, or in a related business or practice, "shall not offer or engage to perform a professional service for a contingent fee" where the service is:1

one for which independence is required under Rule 204;
a compilation engagement; or
the preparation of an income tax return.

The Nova Scotia, Saskatchewan and New Brunswick codes contain the same three exclusions, with small changes in wording. Nova Scotia and New Brunswick refer to "a registrant" rather than "a member or firm".24 Saskatchewan's version applies to a registrant "engaged in the practice of professional accounting or other regulated services".3 The copy of the Newfoundland and Labrador rules we found contains the same text.9

3.3The conditional permission in Rule 215.2

For every other service, Rule 215.2 permits a contingent fee "provided the client has agreed in writing to the basis for determining the fee before the substantial completion of the engagement" and the arrangement meets one of two objectivity tests.1 The first is that the arrangement does not impair, or in the view of a reasonable observer would not impair, the judgment or objectivity of the member or a partner on an engagement that requires independence. The second is that the arrangement does not influence, or in the view of a reasonable observer would not influence, the result of a compilation engagement or an income tax return prepared by the member or a partner for the same client.1

The guidance to Rule 215 adds that a member or firm "is entitled to charge for professional services such fees as the member or firm considers to be fair and reasonable for the work undertaken" and that it is "generally prudent" to set out fees and their basis in an engagement letter.1 It reminds members that the rules on integrity and due care, competence, false or misleading documents and generally accepted standards (Rules 202, 203, 205 and 206) continue to apply to work done for a contingent fee.1

3.4The guidance examples

The guidance gives two lists of examples. The first lists services that "might be undertaken on a contingent fee basis", provided that other provisions including Rule 204 would also permit the service for an assurance client. In the Ontario code the list has two items: commodity tax refund claims, and preparing notices of objection to tax assessments and reassessments.1 The second lists engagements that, if undertaken on a contingent fee basis, "may be seen to impair professional judgment or objectivity" on another engagement for the same client. It includes assisting with income tax appeals, valuation engagements, business interruption insurance claims and several others.1 The same two lists appear in the Saskatchewan and New Brunswick codes.34

The guidance states that the examples "are not intended to be exhaustive or conclusive" and that a member "must always exercise professional judgment" in deciding whether a particular engagement may be undertaken on a contingent fee basis under Rule 215.2.1 Neither list mentions SR&ED claims or investment tax credits.

3.5Value billing

The guidance also refers to Rule 214, which permits what the code calls value billing. A bill may take into account, among other factors, the degree of risk and responsibility the work entails, the priority and importance of the work to the client and "the value of the work to the client".1 The code describes value billing as an exception to the definition of a contingent fee and cautions, in its guidance on independence, that value billing "should not be used to justify what is in substance an otherwise inappropriate contingent fee".1

4Province by province

The table below records what we were able to read for each province. It reports the version printed on each document. It does not state that the version shown is current unless the document says so.

Province	Body and document	Version shown	Income tax return exclusion in Rule 215.1	Written agreement condition in Rule 215.2
Ontario	CPA Ontario, CPA Code of Professional Conduct	Adopted 26 February 2016; ratified 22 September 2016	Yes	Before substantial completion
Nova Scotia	CPA Nova Scotia, CPA Code of Professional Conduct	Adopted 15 July 2016	Yes	Before substantial completion
Saskatchewan	CPA Saskatchewan, Rules of Professional Conduct and Guidance	Board approved 1 June 2022 (file name)	Yes	Before substantial completion
New Brunswick	CPA New Brunswick, CPA Code of Professional Conduct	February 2023	Yes	Before substantial completion
Newfoundland and Labrador	CPA Rules of Professional Conduct (copy on a CPA Newfoundland and Labrador web host)	Not shown	Yes	Before substantial completion
Alberta	CPA Alberta, Rules of Professional Conduct with Guidance	September 2015	Not in this version	Before completion of the engagement
British Columbia	CPABC guidance article on the CPA Code	Article revised 1 March 2018	Yes, as described by CPABC	In writing and in advance, as described by CPABC
Quebec, Manitoba, Prince Edward Island	Not opened	Not confirmed	Not confirmed	Not confirmed

Sources: Ontario,1 Nova Scotia,2 Saskatchewan,3 New Brunswick,4 Newfoundland and Labrador,9 Alberta,10 British Columbia.11

4.1Ontario, Nova Scotia, Saskatchewan and New Brunswick

These four codes contain the full three part prohibition and the same conditional permission. The Ontario code states that it was adopted by the CPA Ontario Council on 26 February 2016, ratified by members on 22 September 2016, and continued under the Chartered Professional Accountants of Ontario Act, 2017.1 The Nova Scotia code states that it was adopted by the Board of CPA Nova Scotia on 15 July 2016.2 The New Brunswick code is dated February 2023.4 The Saskatchewan document we read is the Rules of Professional Conduct with Guidance published by CPA Saskatchewan.3

4.2Newfoundland and Labrador

The copy of the Rules of Professional Conduct that we found for Newfoundland and Labrador contains the same Rule 215 text as Ontario, including the income tax return exclusion.9 It is hosted on a web address that appears to belong to a development site rather than the body's main website.

4.3Alberta

The CPA Alberta document we opened is dated September 2015. In that version Rule 215.1 lists only two prohibited services: work requiring independence under Rule 204 and compilation engagements. It does not list the preparation of an income tax return. Its Rule 215.2 requires the client to agree in writing to the basis for the fee "before the completion of the engagement".10 We could not confirm whether CPA Alberta has since amended Rule 215 to match the other provinces.

4.4British Columbia

We did not open the CPABC code itself. A CPABC guidance article, "Avoiding complaints about fees", states that Rule 215 "prohibits contingent fees when the professional service is" one that requires independence under Rule 204, a compilation engagement or the preparation of an income tax return, and that outside those services a contingent fee may be used if "the client has agreed to the contingent fee structure in writing" in advance.11 The article advises members to consider "the impact of the contingent fee on their perceived objectivity" and to refrain from this billing method when their objectivity "could be reasonably questioned".11

4.5Quebec, Manitoba and Prince Edward Island

Quebec's chartered professional accountants are governed by a code of ethics made as a regulation under the Professional Code, published on LégisQuébec. The site refused our request, so we have not read its provisions on fees and make no statement about them. We also did not open the current codes for Manitoba and Prince Edward Island.

5How SR&ED work meets Rule 215

5.1The program and the form

The CRA describes the SR&ED tax incentives as intended to encourage businesses to conduct research and development in Canada, and lists two incentives: a deduction against income and an investment tax credit.12 A taxpayer that claims SR&ED expenditures must file a prescribed form with the Minister "on or before the day that is 12 months after the taxpayer's filing-due date for the taxation year", containing prescribed information about the expenditure and claim preparer information.5 The prescribed form is Form T661, and the CRA's guide says that Form T661 and the related schedule "should be filed with your income tax return for the year."6

5.2The open question

The prohibition in Rule 215.1(c) applies to the "preparation of an income tax return". The codes we read do not define that phrase and do not say whether it includes a separate prescribed form, such as Form T661, that is filed with the return or within 12 months after its due date.15 The guidance examples do not resolve the point either, since SR&ED claims appear in neither list.1

Two readings are therefore possible on the text alone. On one reading, an engagement to prepare Form T661 and the related schedule is part of preparing the income tax return, and a contingent fee is prohibited for a member who does that work. On the other, SR&ED claim preparation is a separate professional service, and a contingent fee is permitted if the Rule 215.2 conditions are met. We found no published ruling or guidance from a provincial body choosing between these readings. In Alberta's 2015 version, which has no income tax return exclusion, the question does not arise in the same way.10

5.3The one published record we found

CPABC publishes summaries of the determinations of its Investigation Committee. One summary, numbered 2021 #22 and published without the member's name, records that the member "prepared an application for the Scientific Research and Experimental Development Tax Incentive Program on behalf of a client" and "charged a contingent fee for the work without agreement on the basis for the fee in writing with the client".13 The committee found contraventions of several provisions, including Code 215.1 and 215.2, listed under the heading "Contingent fees", and recommended that the member accept a reprimand and pay expenses of $1,687.13 The summary also records breaches unrelated to the fee and states that the member did not hold public practice licensure from CPABC at the time.13

The summary does not quote Rule 215 or explain which part of it applied. The only fee conduct it describes is the lack of a written agreement on the basis for the fee, which is the condition in Rule 215.2. It does not state that a contingent fee for SR&ED work is prohibited outright.13 It is one record from one province and should not be read as showing how often such cases arise.

6The federal disclosure rule

6.1What the law requires

The provincial codes govern the conduct of CPA members. The federal Income Tax Act governs every SR&ED claim, whoever prepares it. Since 2014 the prescribed form must contain "claim preparer information", which the Act defines as prescribed information about the identity of the claim preparer, if any, and "the arrangement under which the claim preparer agrees to accept consideration in respect of the preparation of the form".57

A "claim preparer" is a person or partnership that agrees to accept consideration to prepare, or assist in the preparation of, the form. Employees preparing the form in the course of their employment are excluded.7 The definition does not depend on professional membership. It reaches CPA members and non-members alike.

6.2The penalty

Under subsection 162(5.1), every person or partnership that makes, participates in, assents to or acquiesces in a false statement or omission in claim preparer information is liable, jointly and severally or solidarily with any claim preparer of the form, to a penalty of $1,000.7 Subsection 162(5.2) relieves a claim preparer who exercised "the degree of care, diligence and skill" that a reasonably prudent person would have exercised in comparable circumstances.7 The CRA's guide puts it in practical terms: a penalty of $1,000 may be assessed for each SR&ED claim with missing, incomplete or inaccurate preparer information, and the claim preparer is jointly and severally, or solidarily, liable with the claimant.6

6.3What Part 9 of Form T661 records

Part 9 of Form T661 asks, for each claim preparer, for the name, the business number, a billing arrangement code, a billing rate, any other billing arrangement and the total fee "paid, payable or expected to be paid".6 The guide gives billing arrangement code 1 for a contingency fee calculated as a percentage of the ITC earned, and explains that a contingency fee arrangement with variable rates is entered on separate lines.6 Its worked example records a contingency fee of 15.5 percent on the first $10,000 of ITC and 6 percent on the next $5,000, alongside a flat fee and an hourly rate charged by a second preparer.6

Part 9 line	What the claimant reports
940	Name of each claim preparer
945	Business number of the claim preparer
950	Billing arrangement code (code 1 is a contingency fee as a percentage of the ITC earned)
955	Billing rate (for code 1, the percentage)
960	Any other billing arrangement, in 10 words or less
965	Total fee paid, payable or expected to be paid

Source: CRA guide T4088, Part 9.6

6.4Confidential filing of the fee details

In 2014 the CRA introduced an administrative measure that lets Part 9 be filed separately where a claim preparer has confidentiality concerns. Under that measure, the billing arrangement code, billing rate, other arrangements and total fee (lines 950 to 965) are left out of the copy filed with the claim and given to the CRA on a separate paper copy.1415 The information is still reported to the CRA. It is not published.

6.5Why the rule was introduced

Budget 2013 announced the measure as one of several to help the CRA "better respond to the minority" of SR&ED tax preparers and performers "who participate in claims where the risk of non-compliance is perceived to be high". It said the information on preparers and billing arrangements, "including whether contingency fees were used and the amount of the fees payable", would "facilitate the identification of SR&ED program claims with a higher risk of non-compliance."8 The CRA's summary of the measure records Royal Assent on 12 December 2013 and an effective date of 1 January 2014.1617

7How the two layers fit together

7.1Different reach

The provincial codes and the federal rule do different jobs. The codes decide whether a CPA member may charge a contingent fee at all, and on what conditions. The federal rule does not limit fees. It requires the fee arrangement to be reported for every SR&ED claim, whoever prepared it, and attaches a penalty to inaccurate reporting.17

Question	Provincial CPA codes	Income Tax Act and Form T661
Who is covered	CPA members and registrants in that province	Every SR&ED claimant and every paid claim preparer
Does it restrict contingent fees	Yes, for listed services; conditional permission otherwise	No
Does it require disclosure of the fee	Written agreement with the client under Rule 215.2	Fee type, rate and amount reported to the CRA on Part 9
Who enforces it	The provincial body's discipline process	The CRA, through a $1,000 penalty per claim
Mentions SR&ED by name	No, in the codes we read	Yes

Sources: provincial codes,1234 Income Tax Act,57 CRA guide.6

7.2Non-members

An adviser who is not a CPA member is outside the provincial codes entirely. The Rule 215 prohibition and its written agreement condition apply only to members and registrants.1 The federal disclosure rule applies to such an adviser in the same way as to a CPA, because it turns on accepting consideration to prepare the form, not on professional status.7

7.3Variation between provinces

Because each province adopts its own code, a CPA firm with offices in several provinces may face rules that are worded the same in most places but differ in at least one version we read. The Alberta document dated September 2015 omits the income tax return exclusion and uses "before the completion of the engagement" rather than "before the substantial completion of the engagement".101 Whether that difference still exists depends on whether Alberta has amended its rules since, which we could not confirm.

8What the record shows

The documents we were able to read show a common structure. Rule 215 in the provincial CPA codes bars contingent fees for assurance work requiring independence and for compilation engagements, and in every version we read apart from Alberta's 2015 text it also bars them for preparing an income tax return.1234910 For any other service, a contingent fee is permitted if the client agrees in writing to its basis before the engagement is substantially complete and objectivity on other work is not impaired.1

The codes do not name SR&ED, and we found no guidance from a provincial body on whether preparing Form T661 is part of preparing an income tax return. One published CPABC record concerns a contingent fee for an SR&ED application. It records a reprimand where the fee was charged without a written agreement on its basis, and it does not state that the fee was prohibited outright.13

At the federal level, the Income Tax Act has since 2014 required every SR&ED claim to identify each paid claim preparer and the fee arrangement, including contingency fees, with a $1,000 penalty for missing or inaccurate information.576 The stated purpose was to help the CRA identify claims with a higher risk of non-compliance.8 We found no published aggregate data from these disclosures.

Several points remain unconfirmed: the current texts for Alberta, British Columbia, Quebec, Manitoba and Prince Edward Island, and the official location of the Newfoundland and Labrador rules. They are marked for checking above.

References

Chartered Professional Accountants of Ontario, CPA Code of Professional Conduct (adopted 26 February 2016, ratified 22 September 2016), Definitions ("contingent fee"); Rule 214 guidance; Rule 204.4 guidance on contingent fees, paragraph 5; Rule 215.1, 215.2 and Guidance to Rule 215, paragraphs 1 to 6. https://assets.cpaontario.ca/members/regulations-guidance/pdfs/CPA-Ontario-Code-of-professional-conduct.pdf (accessed 11 October 2026). Back
CPA Nova Scotia, CPA Code of Professional Conduct (adopted 15 July 2016), Rule 215.1 and 215.2. https://cpans.ca/common/Uploaded%20files/Bylaws/Code%20of%20Professional%20Conduct%20(February%207,%202020).pdf (accessed 11 October 2026). Back
Institute of Chartered Professional Accountants of Saskatchewan, Rules of Professional Conduct and Guidance, Rule 215.1, 215.2 and Guidance to Rule 215, paragraph 4. https://www.cpask.ca/public/CKeditorUpload/Protecting_the_Public/Documents/2022-06-01_FINAL_BOARD_APPROVED_RPC_with_Guidance.pdf (accessed 11 October 2026). Back
CPA New Brunswick, CPA Code of Professional Conduct (February 2023), Rule 215.1, 215.2 and Guidance to Rule 215, paragraph 4. https://cpanewbrunswick.ca/common/Uploaded%20files/Documents/Regulatory/CPA%20New%20Brunswick%20Code%20of%20Conduct%20EN%20February%202023.pdf (accessed 11 October 2026). Back
Income Tax Act, RSC 1985, c 1 (5th Supp), subsection 37(11) (current to 21 September 2026). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-37.html (accessed 11 October 2026). Back
Canada Revenue Agency, Guide to Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim (T4088, Rev. 20), filing guidance and Part 9, lines 940 to 965. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4088/guide-form-t661-scientific-research-experimental-development-expenditures-claim-guide-form-t661.html (accessed 11 October 2026). Back
Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 162(5.1), (5.2) and (5.3). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-162.html (accessed 11 October 2026). Back
Department of Finance Canada, Economic Action Plan 2013, Annex 2, Tax Measures, "Scientific Research and Experimental Development Program". https://www.budget.canada.ca/2013/doc/plan/anx2-eng.html (accessed 11 October 2026). Back
CPA Rules of Professional Conduct (Newfoundland and Labrador copy), Rule 215.1 and 215.2. https://cpanldev.imiscloud.com/common/Uploaded%20files/About%20Us/Regulatory/ROPC%20ONLY.pdf (accessed 11 October 2026). Back
Chartered Professional Accountants of Alberta, CPA Rules of Professional Conduct and Related Guidance (September 2015), Rule 215.1 and 215.2. https://www.cpaalberta.ca/-/media/Files/Protecting-the-Public/Governing-Documents/CPAAlbertaRulesofProfessionalConductwithGuidance_070115.pdf (accessed 11 October 2026). Back
CPABC, Avoiding complaints about fees (CPABC in Focus; last revision 1 March 2018). https://www.bccpa.ca/kbase/kbase-search/cpabc/cpabc-code-of-conduct/guidance/avoiding-complaints-about-fees/ (accessed 11 October 2026). Back
Canada Revenue Agency, Scientific Research and Experimental Development (SR&ED) tax incentives. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program.html (accessed 11 October 2026). Back
CPABC, Investigation Committee determinations and recommendations, 2021 #22. A Member. https://www.bccpa.ca/member-practice-regulation/ethics-and-discipline/discipline-summaries-search/investigation-committee-determinations-and-recommendations/2021-22-a-member/ (accessed 11 October 2026). Back
Canada Revenue Agency, SR&ED T661 Claim Form: revised optional filing measure for Part 9 (30 May 2014). https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/whats-new-program/t661-claim-form-revised-optional-filing-measure-part-9.html (accessed 11 October 2026). Back
Canada Revenue Agency, Form T661 (13): questions and answers, Q6. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/form-t661-13-questions-answers.html (accessed 11 October 2026). Back
Canada Revenue Agency, Budget 2013: Scientific Research and Experimental Development (SR&ED) Tax Incentive Program (archived). https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2013/budget-2013-scientific-research-experimental-development-tax-incentive-program.html (accessed 11 October 2026). Back
Canada Revenue Agency, SR&ED T661 Claim Form, 2013 Revision: claim preparer information (31 October 2013). https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/whats-new-program/t661-claim-form-2013-revision-claim-preparer-information.html (accessed 11 October 2026). Back

Cite this paper

Summary

1Summary

2Scope and method

2.1What this paper covers

2.2Sources

2.3What we did not find

3The common Rule 215

3.1Definition of a contingent fee

3.2The prohibition in Rule 215.1

3.3The conditional permission in Rule 215.2

3.4The guidance examples

3.5Value billing

4Province by province

4.1Ontario, Nova Scotia, Saskatchewan and New Brunswick

4.2Newfoundland and Labrador

4.3Alberta

4.4British Columbia

4.5Quebec, Manitoba and Prince Edward Island

5How SR&ED work meets Rule 215

5.1The program and the form

5.2The open question

5.3The one published record we found

6The federal disclosure rule

6.1What the law requires

6.2The penalty

6.3What Part 9 of Form T661 records

6.4Confidential filing of the fee details

6.5Why the rule was introduced

7How the two layers fit together

7.1Different reach

7.2Non-members

7.3Variation between provinces

8What the record shows

References

About this paper

Cite this paper

Summary

1Summary

2Scope and method

2.1What this paper covers

2.2Sources

2.3What we did not find

3The common Rule 215

3.1Definition of a contingent fee

3.2The prohibition in Rule 215.1

3.3The conditional permission in Rule 215.2

3.4The guidance examples

3.5Value billing

4Province by province

4.1Ontario, Nova Scotia, Saskatchewan and New Brunswick

4.2Newfoundland and Labrador

4.3Alberta

4.4British Columbia

4.5Quebec, Manitoba and Prince Edward Island

5How SR&ED work meets Rule 215

5.1The program and the form

5.2The open question

5.3The one published record we found

6The federal disclosure rule

6.1What the law requires

6.2The penalty

6.3What Part 9 of Form T661 records

6.4Confidential filing of the fee details

6.5Why the rule was introduced

7How the two layers fit together

7.1Different reach

7.2Non-members

7.3Variation between provinces

8What the record shows

References

About this paper

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