The accounting shortage in Canada is neither a thing of the past nor a future worry anymore. It is a challenge to squeeze CPA firms across Canada from Vancouver Island to Nova Scotia. CPA firms across Canada have more client demands than they can handle, more regulatory complexities than they can tackle, and a lot fewer hands than they actually need, right now. As a result, every CPA firm in Canada is bearing the brunt of the situation they find themselves in. While some are tackling it in-house, others are seeking external means to overcome these challenges.
This is where outsourcing stops being a stopgap solution and becomes a strategic growth alternative. When done right, outsourcing helps CPA firms tackle the accounting shortage at the structural level by freeing your in-house team from burnout, offering you instant access to talent you can’t get locally, and letting you shift into high-value advisory work your clients crave.
Let us have a deep dive into the accounting shortage in Canada and how outsourcing becomes a strategic lever for Canadian CPA firms in 2026 and beyond.
What is really behind the accounting shortage in Canada?
While the talent shortage/staffing shortage in the accounting world is nothing new, it certainly is no longer a buzzword. The ongoing accounting shortage is essentially transforming the entire industry. According to CPA Canada’s 2023 Labour Market Study, the accounting profession in Canada is facing a severe talent gap that is expected to worsen through 2025 and beyond. We are already seeing an increasing number of retirements colliding with a constantly decreasing number of enrolments in accounting programs, and the result. An ever-growing talent shortage that is leaving firms scrambling.
As a CPA firm, you would have noticed significantly fewer responses to your job posting. At some point, you would have even turned down clients because you simply did not have the required bandwidth. Therefore, the situation is clear: the accounting shortage in Canada is not affecting CPA firms of any specific size or type of work; it is uniform across firms of all sizes. However, the small- to mid-sized practices are feeling it most acutely. Small- and mid-sized firms already can not compete with the Big Four’s compensation brackets, and even if they could, there aren’t enough qualified candidates to go around.
Now, let us talk about what’s driving this crisis.
To begin with, there is a significant demographic shift. A major chunk of experienced CPAs are either on the verge of retirement or have already retired. According to Statistics Canada data, nearly 30% of accountants and auditors are aged 55 or older. Furthermore, the number of students enrolling in accounting as a career path is constantly declining. The CPA profession saw a 15% decline in the number of new CPA candidates between 2019 and 2022. And finally, the burnout. Irrespective of the role you are in, if you are associated with the accounting profession in some shape or form, you’d have felt the stress of demanding hours and workload, which is pushing people out of the profession entirely.
Traditionally, Canadian accounting practices relied primarily on the tried-and-tested “hire locally, train, retain” model; however, with no one to hire, train, or retain, that model is no longer working. This is where outsourcing becomes such a tempting alternative. It is not a band-aid for your small wounds; it is a fundamental shift in how you structure your practice.
How does outsourcing fix the accounting shortage for small to mid-sized firms?
For years now, “outsourcing” has been a dirty word in the accounting and bookkeeping industry. It was normally associated only with low-quality data entry tasks. But that has changed now. For CPA firms today, it is a lifeline. Modern accounting and bookkeeping outsourcing services are not about “replacing” your existing team; it’s about augmenting them. By outsourcing high-volume, repeatable tasks such as monthly bookkeeping, basic T1/T2 preparation, and GST/HST filings to a dedicated offshore partner, CPA firms in Canada can free up their in-house staff to focus on the high-value advisory work they excel at.
By partnering with an accounting and bookkeeping outsourcing service provider, you enable them to spend their valuable time analysing tax strategies for your clients as opposed to hunting down missing receipts in February. This also helps CPA firms tackle the shortage of accountants by making the roles you do have locally much more attractive. Partnering with an outsourcing service provider no longer means hiring a “paper pusher”; if anything, it means hiring a consultant. Furthermore, it also helps CPA firms scale up during the April crunch without the need to hire permanent staff they won’t need in July.
Resource Comparison: In-House vs. Outsourced
| Feature | Local In-House Hire | Modern Outsourced Partner |
|---|---|---|
| Average Salary (Senior) | $95,000 – $120,000+ | $35,000 – $55,000 (equiv.) |
| Time to Productivity | 3–6 Months | 2–4 Weeks |
| Hiring Difficulty | Extremely High (87% struggle) | Instant Scalability |
| Overhead (Tech/Rent/Benefits) | Significant (20-30% on top) | Included in Service Fee |
| Burnout Risk | Very High during tax season | Managed via global time zones |
What are Canadian CPA firms outsourcing and why it matters?
For CPA firms, the days of outsourcing low-skill tasks are over. Modern accounting and bookkeeping outsourcing service providers are far more capable and competent to meet the demands of current CPA practices.
Here’s what CPA firms in Canada commonly outsource:
- Accounts payable and accounts receivable
- Bookkeeping
- Tax preparation & filing
- Audit
- M&A assistance
- General ledger maintenance
- Bank reconciliations
- Financial reporting
- Payroll support
According to a recent industry study, nearly 90% of CFOs now outsource at least some accounting functions, and those that do can easily find qualified talent, compared with CPA firms that don’t.
And that entirely capsulizes the advantage of outsourcing in the face of the CPA shortage in Canada, as it allows you to plug into a wider ecosystem of expertise.
How outsourcing supports growth and advisory services?
By freeing your in-house talent from the everyday transactional work, accounting outsourcing services allow them to focus on high-value advisory services. With no transactional work to slow them down, your in-house team of accountants can focus on:
- Strategic client advisory
- Business process improvement
- Financial planning and forecasting
- Client relationship development
- Value-added consulting services
All of these services are instrumental in growing your practice as they generate higher margins, help you build deeper client relationships, and create real differentiation in your market.
A majority of modern Canadian businesses is outsourcing just to stay competitive and agile, with over half of SMBs having already outsourced core accounting functions, and that number keeps rising.
A proven framework for successful outsourcing engagement
While outsourcing has proven its worth as a strategic growth lever, you need to set clear expectations, provide thorough documentation, and establish review processes to yield the best results for your firm. You will need to be hands-on in your first few engagements to help your outsourced team understand your firm’s specific procedures and preferences. It is pretty much like onboarding a new employee; there is a significant learning curve.
Here’s a proven outsourcing framework that works:
- Start small: Start your outsourcing journey with lower-risk tasks like bookkeeping or data entry.
- Document everything: Create detailed procedures, templates, and style guides.
- Implement review protocols: Establish quality checkpoints before you hand over the work to your clients.
- Communicate regularly: Schedule daily/weekly calls to address questions and provide feedback.
- Measure performance: Track accuracy rates, turnaround times, and client satisfaction
You can start with a small pilot of 2-3 months to assess your offshore team’s performance, and then ramp up operations as needed. The accounting shortage should not force you to compromise on quality, and hence, when done right, outsourcing actually enhances it by letting your CPAs focus on high-value activities.
Conclusion
The shortage of accountants in Canadian CPA practices is real. As a CPA practice owner, you can wait for the situation to get better, or adapt your firm’s operating model to thrive despite talent constraints. Partnering with an outsourcing accounting services provider offers a practical and proven alternative to address capacity issues, control costs, and enable your in-house team to focus on delivering high-value clients.
If you are not sure about outsourcing, we’d suggest you start small or run a pilot if needed. The key here is to take the plunge. And if you are ready to explore how outsourcing can help your firm overcome the accounting shortage and unlock new growth, write to us at marketing@datamaticsbpm.com, and we will have our team of Canadian accounting experts reach out to you to understand your specific challenges and build a customized solution for your practice.
Is it legal to outsource Canadian tax preparation offshore?
Absolutely. However, you must comply with CRA regulations regarding data privacy and disclosure. Generally, you need to inform clients if their data is being processed outside of Canada and ensure your partner has bank-level security protocols.
How do I handle the time zone difference?
Most high-end partners for Canadian firms offer “shifted” hours, where their team works during our morning or late evening. This actually creates a “follow-the-sun” model where you can send a file at 5 PM and have it ready for review by 9 AM the next morning.
Can outsourced teams use my specific software?
Yes. With cloud technology like Xero, QBO, and remote desktops for CaseWare, your outsourced team works directly in your environment. There is no need for messy data transfers.
Will my clients be upset that I'm outsourcing?
Most clients care about two things: accuracy and deadlines. If outsourcing allows you to deliver a higher-quality return on time and offer more advisory meetings, they rarely care who did the initial data entry.
What is the average cost saving?
Most Canadian firms report a 40% to 60% reduction in labor costs for the same volume of work when compared to hiring a full-time, local employee with benefits and overhead.
