January 2008 Issue
Compliance
The Whole Truth About Permits
BY DAVE TODD, P.ENG.
Director, Compliance
Industry and the public generally know that individuals must be registered if they practice or hold themselves out to practice engineering, geology or geophysics in Alberta. Not as commonly known, however, is that the Engineering, Geological and Geophysical Professions Act contains a similar requirement for partnerships, corporations and other entities.
It’s called the permit to practice, and the EGGP Act has required it for
about 40 years.
In earlier times, enforcement centred only on consulting companies. Then in 1981,
Council decided to extend enforcement to operating companies as well.
What the Act Says
The EGGP Act is clear. The authority for the registration of individuals and
permit holders to practice is contained in the Part 1, Sections 2(1), 5(1) and
7(1).
Section 2(1) says:
“Except as otherwise provided in this Act, no individual, corporation,
partnership or other entity, except a professional engineer, a licensee so authorized
in the licensee’s license, a permit holder so authorized in its permit
or a certificate holder so authorized in the certificate holder’s certificate,
shall engage in the practice of engineering.”
The EGGP Act does not differentiate between sizes of corporations. It does not differentiate between practice for internal and practice for external purposes. It is straightforward.
If your corporation practices any of the APEGGA professions, a permit to
practice is required.
Still, there is confusion. And some of it may stem from this: a professional
member or licensee of APEGGA who engages in the practice of engineering, geology
or geophysics in his or her own name does not require a permit to practice. In
those situations, personal registration is, in effect, a permit to practice.
If this same individual practices through a corporation, then the corporation requires a permit to practice, even though the member is the only employee
The Awareness Gap
Among the membership and within industry, there appears to be a lack of awareness
about how the permit system works. Some people we talk to believe — incorrectly — that
there is no requirement for a permit for individual corporations, as long as
they provide professional services exclusively to a single, permit-holding client.
That is not the case.
Another persistent misconception is that engineering or geoscience is carried out only by the individual and never by the company. That is not the case, either. When services are invoiced through a corporation and not a human being, the corporation is, in fact, legally practicing.
Our legal counsel advises that in law, a corporation is an independent legal “person” with all the rights and powers of a natural person. This is recognized by the Business Corporations Act of Alberta. In addition, the Interpretation Act of Alberta provides that the use of the term “person” in legislation includes a corporation.
The EGGP Act recognizes that professional services may be provided through
a corporation, as reflected under the sections mentioned earlier in this article.
The law is clear that a corporation can enter into contracts, including the provision
of professional services through that corporation.
The law does recognize that corporations must act through individuals. However,
an individual’s acts are in the name of a corporation whenever those acts
are provided under the corporation’s employ.
Enter the Permits
Since corporations may be managed, owned or controlled by non-APEGGA members,
APEGGA has adopted the permit system. This allows your Association to regulate
the conduct of professional practice corporations in Alberta.
As noted earlier, this applies to both consulting and operating companies that offer professional services through their corporate entity.
Therefore, as long as professional services are provided through the corporation, rather than a trade name or proprietorship, it is our view that the law is clear. A permit to practice with APEGGA is required to avoid a violation under the EGGP Act.
How the System has Changed
Over the years, APEGGA Council has thoroughly discussed and considered ways to
improve the administration of permits to practice, including the requirement
of a permit for individually incorporated companies.
Several changes have been implemented, such as
• allowing use of a permit number in lieu of a permit stamp
• making it mandatory for each Responsible Member to attend the permit
to practice seminar.
• requiring permit holders to prepare a professional practice management
plan.
Council has continued to maintain its position that a permit is required by all corporations, partnerships or other entities, regardless of whether they practice exclusively under the umbrella of an existing permit holder.
A few years ago, in an effort to lessen the burden on small, private companies, APEGGA Council did make it easier for them to secure and maintain registration, and therefore comply with the requirement to register as permit holders.
Here’s how it works. Some companies qualify for a 50 per cent reduction of the $375 permit fee at renewal. These companies must have only one professional member as a full-time employee, and generate gross revenues not exceeding $250,000 in the previous 12 months.
Our Mandate
APEGGA is an independent corporate body established by statute. The Government
of Alberta has delegated the responsibility of enforcing the EGGP Act to APEGGA.
This includes enforcement of the reserve title and exclusive scope of practice provisions contained in Part 1 of the act. The consequences for corporations that engage in professional practice while unregistered could include
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conviction of a provincial offence as contemplated in Section 98 of the EGGP Act
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an injunction pursuant to Section 9 of the act
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or both.
If you are practicing engineering, geology or geophysics through a corporation, partnership or other entity but don’t have a permit to practice, we advise you to get one immediately. Details and application forms are available on APEGGA’s website, www.apegga.org.
If you are aware of companies practicing without a permit, provide the Compliance Department with some tangible evidence, such as a business card, a report or a website address. Our follow-up will begin without us revealing the source of the complaint.