REPORT OF THE
SPECIAL ADVISOR ON AGENCIES
December 20, 2010
Rita Burak
REPORT OF THE SPECIAL ADVISOR ON AGENCIES
December 20, 2010
Rita Burak
December 2010
Dear Minister Takhar:
Attached is my report on the review of Ontario agencies. It has been a privilege to work on this project.
I would like to extend my personal thanks to the Agency Review Project Team and to the staff of the Ministry of Government Services and the Public Appointments Secretariat. I also thank the Ministers' chiefs of staff, deputy ministers and agency chairs and CEOs who took the time to speak with me and share their insights and knowledge.
I believe the recommendations in this report, if implemented, will strengthen the governance and accountability frameworks which apply to the agencies as well as improve the monitoring and evaluation practices of ministries and central agencies.
Yours truly
Rita Burak
Purpose and Mandate
Scope and Approach
How to Read this Report
An Overview
Non‐classified Agencies
Classified Agencies
Current Accountability Framework
Role of Ministries and Central Agencies
Role of Officers of the Legislature
Role of Conflict of Interest Commissioner
Appointments Process
Jurisdictional Review of Policy and Accountability Frameworks
Latest Trends and Best Practices in Governance
Recommendations at a Glance
Discussion and Rationale behind the Recommendations
A. Key Informant Interviews
B. Agency Establishment and Accountability Directive
C. List of Classified Provincial Agencies
D. Adjudicative Tribunals Accountability, Governance and Appointments Act
There are many reasons for creating agencies outside of the conventional government structures. The most common are to ensure independence in quasi‐judicial matters, to obtain independent expert advice and to deliver a service or operate an enterprise using specialized expertise or capabilities.
The topic of agencies and their role in public administration has been studied periodically over many years. For example, Report Number Nine of the Committee on Government Productivity, dated March 1973, reviewed their purpose and made recommendations for improvement.
Today, ensuring that all its agencies operate within an appropriate governance and accountability framework is a priority for the Ontario government and the reason it called for this review.
To this end, Ms. Rita Burak was appointed through an Order in Council as a special advisor reporting to the Minister of Government Services and given the following mandate:
A small project team comprised of public servants was assembled to assist Ms. Burak. In addition, staff from the Ministry of Government Services, including the Public Appointments Secretariat provided support to the review.
The review took place over approximately five months (July - December 2010).
Over the course of the review, it became clear that the emphasis on operational agencies needed to be broadened to include all those agencies that are governed by boards of directors. The need for robust governance and accountability frameworks takes on special importance in board‐governed agencies.
Specifically, the team reviewed the following:
Note: Issues of compensation, procurement or agency appointee expenses were not covered in the Terms of Reference.
A range of documents and source materials were used to inform the review including relevant academic papers, expert reports, and reports from the Auditor General of Ontario.
A jurisdictional review of policy and accountability frameworks and an examination of the latest trends and best practices in governance in the public, private, and not‐for‐profit sectors provided valuable insights into good governance and accountability practices.
A number of agency chairs and chief executive officers were consulted, as listed in Appendix A , as well as political chiefs of staff to ministers, and deputy ministers.
The report is divided into an introduction, four chapters and appendices:
Introduction provides the purpose and the scope and approach of the review.
1. Ontario's Agencies Today provides an overview of Ontario's agencies as well as information on the role of the various key players and on the appointments process.
2. Research Findings and Observations is divided into two sections. One is a jurisdictional review, and the other is a discussion on the latest trends in governance.
3. Recommendations is divided into two sections. The first section provides an overview of all recommendations. The second section gives the rationale behind the recommendations. It is divided into two parts: Strengthening Agency Board Governance and Accountability, and Improving Ministry and Central Agency Monitoring and Evaluation Practices.
4. Conclusion ties together the various themes that run through the report and leaves the government with one or two final thoughts to consider.
Note: Different jurisdictions use different terminology to describe an agency, with a more general term being 'public entities'. However, for the purposes of this report, the term 'agency' is used to include all public bodies and entities.
`Agencies' is a broadly used term.
In total, there are 630 agencies listed on the Public Appointments Secretariat website. These include all bodies to which the government makes at least one appointment. They can be divided into two groups: non‐classified and classified agencies.
This review focuses for the most part on classified agencies, but will make reference to the electricity companies which, while not classified, are governed by boards of directors to which the government makes all appointments.
For clarity, a brief background on non‐classified agencies follows.
More than 300 of the 630 agencies are referred to as non‐classified agencies. They are generally excluded from the financial and administrative requirements of the Ontario government but the government makes at least one representative appointment.
Unlike the classified agencies, non‐classified agencies are not subject to the Agency Establishment and Accountability Directive, the most significant accountability instrument of government.
The non‐classified agencies have a wide variety of purposes:
There are approximately 258 classified agencies. Not all are called an agency, there are boards, commissions, councils, authorities, foundations, and trusts included in the agency mix. Often they are referred to as the ABCs (agencies, boards and commissions).
For the purposes of this review, the term agency will be used to refer to all classified agencies, unless otherwise noted.
A classified agency is generally constituted by a statute, a regulation under an existing statute, or an Order in Council. The government makes the majority of the appointments.
Ontario's agencies are diverse and complex. They are usually established for one of the following three purposes:
That said, there are many variations of form and function, as well as an array of policies and separate laws that apply to different categories of agencies.
Agencies vary in size from large operating agencies such as the Liquor Control Board of Ontario to small advisory committees such as the Ontario Geographic Names Board.
Agencies work within a remarkably complex environment, with a multitude of stakeholders and partners. The figure on the next page illustrates the variety of relationships and interactions. This complexity is often not well‐understood. It speaks to the need for clarity in the expectations placed on agencies and for rigour and consistency in the governance and accountability required of them, as well as for the appropriate tools and supports needed to ensure that agencies deliver on their mandate in a responsible and effective manner.
All classified agencies are subject to the Agency Establishment and Accountability Directive (AEAD) (see Appendix B). This directive, the primary accountability instrument of government in relation to its agencies, was updated to significantly strengthen the policy framework by Management Board of Cabinet, and became effective January 26, 2010.
The AEAD classifies agencies according to primary function. There are seven classifications.
An adjudicative agency makes independent quasi‐judicial decisions and resolves disputes on the obligations, rights and responsibilities of an individual, business, or corporate body against existing policies regulations and statutes. The agency may also hear appeals against previous decisions.
There are 42 adjudicative agencies in Ontario. They do not operate under governing boards.
An advisory agency provides ongoing information and advice to assist in the development of policy and in the delivery of programs. There are 111 advisory agencies in Ontario. They do not have governing boards.
A crown foundation solicits, manages and distributes donations of money or other assets donated for a named organization in whose interests the foundation has been established under the Crown Foundations Act or under the University Foundations Act.
There are three crown foundations in Ontario, all in the university sector. Crown foundations are governed by boards.
An operational enterprise sells goods or services to the public in a commercial manner including, but not necessarily, in competition with the private sector.
There are 37 operational enterprise agencies in Ontario. These agencies have governing boards.
An operational service delivers goods or services to the public usually with no or minimal fees.
There are 39 operational service agencies in Ontario. These agencies have a governing board.
A regulatory agency makes independent decisions and undertakes inspections, investigations, prosecutions, certifications, licensing, and rate‐setting that may limit or promote the conduct, practice, obligations, rights, and responsibilities of an individual, business, or corporate body.
There are 21 regulatory agencies in Ontario, only five have governing boards.
A trust agency administers funds or other assets for beneficiaries named under the statute.
There are five trusts in Ontario. All have governing boards.
See Appendix C for a list of classified agencies by type.
The Agency Establishment and Accountability Directive sets out how agencies are to be established and classified. It also details the accountability framework in which ministries and agencies operate, setting out reporting requirements, roles and responsibilities, and aligning oversight with risk.
More specifically, the directive requires that ministries develop, for approval by Treasury Board/Management Board of Cabinet, a sound business case, including a financial assessment, for the establishment of a new classified agency. A case must be made that the proposed new agency, among other things, is in the public interest, provides the operational flexibility that the government requires, and provides value for money. As well, the agency's capacity for effective stewardship of public resources must be demonstrated.
The Agency Establishment and Accountability Directive also requires that various "Tools of Accountability" be in place:
Note: Requirements for advisory agencies are less detailed .
Specific to the adjudicative agencies, the Adjudicative Tribunals Accountability, Governance and Appointments Act, 2009 (see Appendix D) further strengthened and made transparent the accountability framework for this group of agencies, in recognition of the importance of their independent role in decision‐making. This Act codifies many of the requirements of the Agency Establishment and Accountability Directive and addresses key matters relating to appointments through provisions with respect to the following elements:
In addition to the AEAD, there are four other accountability directives that apply in their entirety to all classified agencies. These are the following:
In addition, all classified agencies must have a public complaints process, performance measures and risk assessment and mitigation strategies as part of their business plans.
Regarding expenses, per the Public Sector Expenses Review Act, 2009, the expense claims of agency senior executives at 22 agencies (four of which are non‐classified) are subject to review by the Integrity Commissioner.
All classified agencies, except for Crown Foundations and Trusts, are also subject to the Internal Audit Directive. It sets out a framework to govern the operation of internal audits.
The Procurement Directive may also apply in whole or in part, depending on specified criteria.
Those agencies that manage transfer payments, such as Cancer Care Ontario, Ontario Trillium Foundation, and eHealth Ontario, are subject to the Transfer Payment Directive.
Most classified agencies are subject to the ethical framework set out in the Public Service of Ontario Act (PS0A). Those classified agencies that are required to hire their employees under Part III of PSOA are also subject to a variety of administrative and human resource management directives. These same directives apply to ministry staff
All agencies are subject to the Public Sector Compensation Restraint to Protect Public Services Act, 2010. It freezes the compensation structures of non‐bargaining staff for two years from March 24, 2010.
All agencies are covered by the provision of Bill 122, Broader Public Sector Accountability Act, 2010, which bars the use of public funds to hire consultant lobbyists to influence the government.
Agencies may also be subject to some or all of statutes such as,
In addition, agencies may be designated under one or more of the following acts, by regulation or Order in Council:
The Agency Establishment and Accountability Directive sets out specific roles for Cabinet, Treasury Board/Management Board of Cabinet (TB/MBC) and its secretaries; for responsible ministers and deputy ministers; and the Minister and Deputy Minister of Finance in relation to agencies.
With respect to governance and accountability:
The Standing Committee on Government Agencies reviews all intended appointees to agencies, boards and commissions and appointments of directors to corporations in which the Crown is a majority shareholder.
The committee is also empowered to review the operations of all agencies, boards, and commissions to which the Lieutenant Governor in Council makes some or all appointments. For example, in February 2009, the committee reviewed the Ontario Securities Commission, the Ontario Racing Commission, and the Human Rights Tribunal. In September 2009, it reviewed the Royal Ontario Museum, Ontario Power Generation and the Ontario Municipal Board.
The Public Accounts Committee reviews reports of the Auditor General of Ontario and
as a result, may call the chief executive officer (CEO) of an agency that has been audited by the Auditor General to come before the committee to
answer questions on selected
topics raised by the audit.
The Auditor General is an independent officer of the Ontario Legislative Assembly whose primary role is to ensure the government is held accountable for use of public funds in delivering public services.
The Auditor General has the legislated authority to perform a range of audits related to agencies such as attesting audits and conducting value‐for‐money audits.
The Auditor General is also required to audit the financial statements of those agencies and Crown‐controlled corporations that are not audited by an external auditor.
Each year the Auditor General releases an annual report that may include findings on the value‐for‐money audits of agencies.
The Office of the Integrity Commissioner plays the following roles in the oversight of Ontario's classified agencies and agencies in the electricity sector:
The Conflict of Interest Commissioner (COIC) has key responsibilities for certain conflict of interest and political activity matters under the Public Service of Ontario Act (PSOA). In this regard, the PSOA and regulations do not refer specifically to agencies, but rather establish a list of "public bodies" (a term not defined) to which the Act and regulations apply. The list includes most classified agencies.
As part of the ethical framework in the PSOA, the COIC's responsibilities include:
In addition, the commissioner may offer advice on an agency's organizational practice or policy to minimize the risk that situations of concern may arise. As well, the commissioner writes to and meets with the newly appointed or re‐appointed chairs of agencies to ensure their understanding of the role as the ethics executive as well as their understanding of the conflict of interest and political activity rules.
All persons wishing to serve on any agency, board or commission must apply through the Public Appointments Secretariat.
The secretariat processes all appointment applications, administers the public appointment process, and ensures appointments are in compliance with legislative requirements. It also serves as the focal point for queries from agencies, ministries, and the public regarding the government's appointment process and it monitors appointee terms and expiration dates.
There are three types of appointments:
All appointments are made following a recruitment and review process managed by the Public Appointments Secretariat.
The Public Appointments Process Guide allows for the identification of candidates by agencies. In most cases, chairs of agencies are very involved in the development of short lists of potential candidates.
Appointments to government agencies respect the needs of the agency but also provide for a fair and equitable representation of the people of Ontario. Positions may include chairs, vice‐chairs, members, presidents, and chief executive officers. While there are some full‐time positions, the majority of the positions are part time.
An element of public service is implied in any appointment by the government. Therefore, any remuneration is not expected to be competitive with the marketplace.
Ministers are responsible for acting, in cooperation with the Public Appointments Secretariat, as the prime contact with any appointments within their jurisdiction.
Ministers must obtain Management Board and Cabinet approval before establishing a rate of remuneration that is in excess of those set out in the Government Appointees Directive.
A key element in this review was to determine how Ontario's agencies policy and accountability frameworks compared to those in other jurisdictions. This inter‐jurisdictional review focused particularly on the following:
Jurisdictions surveyed included British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Canada, United Kingdom, Australia, and New Zealand.
Ontario compares very well and, in some respects, surpasses other jurisdictions in terms of the substance and rigour of the policy and accountability frameworks in place to manage agencies. There is a great deal of commonality in the key measures and approaches used.
A noteworthy difference is in the use of overarching legislation as a key accountability instrument. A number of jurisdictions, notably Alberta and New Zealand, have chosen to enshrine accountability requirements in legislation. This contrasts with Ontario, which has primarily relied on policy instruments such as directives and guidelines, except as it pertains to adjudicative agencies.
A more detailed analysis follows.
Other jurisdictions have accountability requirements for their agencies that are comparable to those used in Ontario. Each jurisdiction may rely on different forms of documentation; the specific required content may vary somewhat, but the accountability intent is essentially the same.
A memorandum of understanding or a document of comparable content, between an agency and its responsible minister is a common requirement.
Two other documents are standard requirements across jurisdictions, (with the exception of advisory agencies).
Almost as standard is a requirement that agencies, (again with the exception of advisory bodies) prepare a rolling, multi‐year business plan annually for submission to the responsible minister. This plan may be referred to as a corporate plan, statement of intent, strategic plan, or service plan.
In some jurisdictions, there is a requirement for the tabling of the business plans for some classes of agencies in the legislature. In British Columbia, for example, the Minister of Finance is required to table the three‐year rolling service plan of the province's commercial Crown corporations each year with the government's budget. The plans are subject to review by the Select Standing Committee on Crown Corporations and by the Auditor General.
Similarly, New Zealand requires the tabling of an agency's Statement of Intent in the House of Representatives no later than five working days of the final document being received by the minister.
Nova Scotia requires selected agencies to prepare and publish accountability reports. These reports are to replace annual reports and are to focus on actual performance and accomplishments, linked directly to performance measures set out in the agencies' business plans. Agencies are also required to provide information for incorporation into the government's annual accountability report, which must be submitted to the House of Assembly.
The Transparency and Accountability Act of Newfoundland and Labrador sets out requirements for agencies to prepare a three‐year business plan for approval by the responsible minister. The Act also requires the minister to make the business plan public by presenting it to the House of Assembly, no later than three months after the beginning of the first fiscal year of the period covered by the plan.
The jurisdictions surveyed appear to use similar approaches to establishing agencies, and similar constituting instruments ‐ usually a statute, a regulation under a statute, or an Order in Council. Generally speaking, a business case is required, one that includes a persuasive policy reason as to why an agency is needed, and the associated financial impact, for approval by Cabinet.
The flowchart below is taken from Australia's document, Governance Arrangements for Australian Government Bodies. It provides a coherent and straightforward illustration of the rationale for and approach to considering the creation of a new agency.
As described in the overview section of this report, Ontario now uses a classification system based on the function of the agency. This approach replaced the previous model that grouped agencies according to their independence from government in matters such as the public service status of their employees.
Like Ontario, the jurisdictions surveyed create agencies to deliver a particular service as set out in their respective mandates. The classification system is generally meant to determine the way in which policy directives and an overall accountability framework may be applied to agencies.
Several jurisdictions have taken a functional approach to classifying agencies, including Alberta and British Columbia.
In many instances in Ontario and other jurisdictions, the constituting legislation of a particular agency sets out requirements for the annual auditing of the agency, and for the preparation of an annual report for submission to the responsible minister and subsequent tabling in the legislature. In some cases, the legislation may also set out requirements for a business plan, for general financial record keeping and reporting, and for a conflict of interest regime for its board members.
The requirements of these constituting instruments may also be accompanied by a range of administrative policies, directives, and guidelines, as is the case in Ontario.
Some jurisdictions have gone a step further in enshrining accountability frameworks in overarching legislation. Doing so places a heavier onus on the government and its agencies to ensure compliance with the accountability framework. As well, it makes much more publicly transparent the government's expectations for and the obligations of the parties to ensure proper management and oversight of agencies.
For example, Ontario's Adjudicative Tribunals Accountability, Governance, and Appointments Act (ATAGAA) codifies accountability requirements that would otherwise have been captured in administrative policy and directives.
In Alberta, the Alberta Public Agencies Governance Act (APAGA) sets out requirements for the following:
The APAGA legislation received Royal Assent in 2009 and is awaiting proclamation. As noted later in the report, Alberta has already moved forward in developing a governance framework to complement the legislative governance and accountability provisions and in establishing an Agency Governance Secretariat to support the framework's implementation.
New Zealand's Crown Entities Act, 2004 (CEA) embodies a similar intent as Alberta's APAGA although it is far more detailed and prescriptive. Its stated purpose is to provide a consistent framework for the establishment, governance, and operation of New Zealand's Crown entities, and to clarify accountability relationships between Crown entities, their board members, and their responsible minister on behalf of the government and the House of Representatives. The Act includes provisions relating to the following elements:
Canada uses its Financial Administration Act (FAA/C) as a vehicle for establishing accountability and transparency requirements for Canada's Crown corporations. It includes the following;
Generally speaking, the oversight of performance and operations is meant to be carried out through the implementation of the accountability framework and specific documentation. For example the annual review and approval by the minister of agency business plans is an important opportunity for oversight.
Ontario's Agency Establishment and Accountability Directive places special emphasis on risk assessment as part of an oversight regime. This does not seem to be an explicit feature of other jurisdictions' approach to oversight.
There is a noteworthy difference between Ontario and other jurisdictions with respect to the regular review of agencies. There is no general applicable requirement in Ontario that agencies undergo regular reviews of their mandates or performance. These can take place if the responsible minister or Treasury Board/Management Board of Cabinet directs it. This is similar to New Zealand, where the Crown Entities Act provides the responsible minister with the authority to review the agency's operations and performance at any time. It is possible that an agency's constituting instrument may require a review. For example, the constituting regulation of the Ontario Immigrant Investor Corporation has such a requirement.
Other jurisdictions are more consistent in the requirement for periodic reviews.
New Zealand has placed special emphasis on Cabinet oversight of agency performance. The central agencies of government in New Zealand provide a report to Cabinet every six months of the performance of the agencies. These reports have been focusing on the larger agencies (the top 14 out of approximately 80 board‐governed agencies). The responsible departments work with the central agencies in the development of these regular reports.
The oversight role of the Auditor General in other jurisdictions can be different than it is in Ontario. For example, New Zealand requires its agencies to provide to the Auditor General, their annual financial statements, statements of service performance, and any other information that the Auditor General has agreed is required to audit, within three months after the end of each financial year.
There is extensive literature and documentation about board governance issues and practices. The following discussion will focus on the accepted standards of and guidance on issues of board governance in the private sector, as well as the trends in the not‐for‐profit and the public sectors. The discussion will conclude with an overview of how practices in selected Ontario agencies compare to these standards and practices.
The issue of board governance has taken on greater importance in the past 10 to 20 years because of the accounting scandals in the United States.
In response to the bankruptcy of the Enron Corporation, the U.S. government introduced new rules and amendments to the 1934 Securities Exchange Act, through the Sarbanes‐Oxley Act, 2002. It improved disclosure and oversight at publicly‐traded companies and auditing firms in order to retain and strengthen confidence in the capital markets.
While most of these tough, new regulations were designed to address extreme problems such as fraud and the falsification of accounts, they also led to a new focus on the role of boards of directors, and interest in issues of conflict of interest and unethical behaviour. As a result, there has been a closer scrutiny of board operations, and new expectations of and standards for corporate governance.
The Sarbanes‐Oxley Act, 2002 influenced corporate governance rules and best practices not only in the United States but also in other countries including Canada. Governments here have introduced similar legislative requirements, which have led to new standards across the country.
The OSC is the regulatory body responsible for overseeing Ontario's capital markets. It expects publicly‐traded companies to meet the Corporate Governance Guidelines set out in the national policy NP 58‐201 of the Canadian Securities Administrators, a voluntary umbrella organization of Canada's provincial and territorial securities regulators.
The guidelines prescribe practices with respect to a number of issues including the following:
In addition, the guidelines prescribe practices to two other important aspects of board governance.
The first is the need for written mandate statements for the board that explicitly acknowledge responsibility for, among other things, strategic planning, risk assessment and management and the oversight of internal controls as well as the development and adoption of corporate governance principles. These mandate statements also set out the expected responsibilities of the directors including their attendance at board meetings as well as the measures established for receiving feedback from stakeholders.
The second is the need for an orientation process for new directors that helps them understand the role of the board and its committees, as well as the contribution that is expected of individual members and the requirement for the continuing education for all directors.
Companies are required to submit annually a corporate governance disclosure form that reflects the extent of compliance with these guidelines. Where boards are not compliant, they are asked to explain how they meet the intent of the guidelines.
The guidelines have raised the bar of corporate governance in Canada. These new standards and expectations have also resulted in a growing effort on the part of a number of parties to push for better qualified directors and more effective governance practices.
The Conference Board of Canada is one of the most authoritative sources on corporate board governance in the private sector. Its Corporate Governance Handbook is a detailed reference tool published by the Conference Board's U.S. parent. It was updated in 2009 and reflects the expectations of securities regulators and the demands of directors, who require guidance on their oversight responsibilities, particularly in turbulent financial times.
The handbook is far ranging in its discussion of good corporate governance.
Standards and Practices - The handbook describes standards and practices with respect to the fiduciary duties of the directors, the independence of the directors, and the separation of the positions of the chair of the board and the chief executive officer. It also looks at the benchmark data for consideration in the appointment process such as size of board, diversity of appointments, and tenure of appointments.
Roles of the Board and Management - The handbook discusses the distinctive roles of the board and the management. According to the handbook, boards are focused primarily on strategic directions, selection of the CEO, approval of strategic and business plans, enterprise risk oversight, and performance assessment. This is in contrast to the role of management, which is to implement the business strategy and run the company's day‐to‐day operations with the goal of increasing shareholder value for the long term.
Skills and Experience of the Board - The handbook is concerned with the ideal composition of a corporate board in terms of skills and experience. This may vary according to the company's strategic vision and particular challenges. It is advised that boards be composed of a mix of knowledge and expertise in marketing, human resources, risk management, international trade, accounting and finance, strategic and business planning, legal and compliance issues, and business‐specific research and development.
Characteristics of Effective Board Members - The handbook lists a number of characteristics of effective board members, ones that will add value to a board's discussions and decisions. These include being alert and inquisitive, asking hard questions, preparing for meetings and contributing to long‐range planning. The handbook also is concerned about the quality of the flow of information to board members in advance of their meetings.
Standing Board Committees - The handbook discusses the role of standing board committees and their importance to good governance. Consistent with securities regulators, these committees should be audit and compensation, and nominating and corporate governance. These standing committees will enhance the overall effectiveness of the board's oversight and ensure its focus on matters of particular concern. In addition the handbook does the following:
Board Performance - The handbook talks about the need for performance assessments of boards and their directors to inform the board's responsibility for oversight, to sharpen its strategies for the long term, to improve the skills and experience of its directors, and to determine the adequacy of the committee structures. It also addresses the need for the orientation of directors and their ongoing education.
Ethics and Compliance - The handbook examines a board's role in overseeing the design and implementation of a comprehensive ethics and compliance program.
Board Operations - The handbook is also concerned about how boards operate, including the frequency of meetings, the policies for board attendance, the distribution of materials for meetings, and the communications between boards and shareholders. It also addresses the need for regular in‐camera sessions of the independent directors.
The Canadian Coalition for Good Governance
The Canadian Coalition for Good Governance (CCGG) is a not‐for‐profit corporation that represents the interests of institutional investors in promoting good governance at publicly‐traded companies. The seven‐year‐old coalition has issued guidelines and position papers on key topics such as high‐performing boards, board engagement, executive compensation, and best practices in disclosure.
The CCGG's Building High Performance Boards, 2010 handbook identifies governance best practices that are consistent with other sources. The coalition's handbook covers a wide range of topics including the independence of directors and the separate roles of the chair and CEO. It also discusses the following subjects:
The Canadian Institute of Chartered Accountants (CICA)
The CICA is not a standard‐setting body, but does provide comprehensive and practical advice to board directors on a variety of issues. It specifically established its Risk Oversight and Governance Board to support directors of for‐profit, not‐for‐profit, and public sector boards in improving their understanding of their risk oversight and governance responsibilities. The CICA has developed concise, informative, and practical publications and resource materials for boards of directors and senior managers. One is a series entitled 20 Questions Directors Should Ask About. It was prepared by leading experts and covers governance issues such as the following:
In each series, key questions are posed and answered with contextual information provided for background. While many are designed for corporate directors, there are several in the series that are focused specifically on the needs of directors of not‐for‐profit and public sector boards.
The Council of International Federation of Accountants (IFAC)
Through its Public Sector Committee, IFAC has provided guidance to regional and national organizations by developing governance frameworks to support the responsibilities of governing bodies in the public sector.
As these standards and guidelines have taken hold, the education of directors has taken on tremendous importance, providing valuable support to boards and individual directors in their efforts to successfully adopt best practices and meet expectations. A number of Ontario business schools offer director education programs as do a number of highly‐qualified independent experts.
The Institute of Corporate Directors (ICD), affiliated with the Rotman School of Management at the University of Toronto, is a leading organization in advocacy of best practices in governance.
The institute is considered by many to be the "gold standard" in director education. Its programs cover topics such as board and director effectiveness, the board's relationship to management, board's role in strategy and enterprise risk management, and board culture and communications. ICD offers a range of resources to the public, through links to materials covering the governance principles and practices of top‐ranked Canadian companies, not‐for‐profit, and public organizations as well a resource centre to its members and alumni.
The Directors College at the DeGroote School of Business, jointly founded by McMaster University and the Conference Board of Canada, offers an accredited corporate director development program as well as a number of specialized programs and courses tailored to the needs of board chairs, committee chairs, and members.
Ryerson University has developed a certificate program in Public/Private Management and Governance. Among other topics, it focuses on the range of issues faced by agency boards of directors in terms of public demands for transparency and accountability, and governments' expectations with respect to governance practices, performance, and integrity.
The major consulting firms also offer a range of resources to support good corporate governance. For example, KPMG LLP has published resources on leading practices in board governance. Deloitte LLP, through its Centre for Good Governance, provides a range of director education courses, best practices, technical resources, reference materials, and other information related to corporate governance, primarily aimed at their clients' audit committees, and at boards of directors more generally.
Interest in improved governance is not limited to the private sector. Boards of directors in the not‐for‐profit (NFP) sector are increasingly interested in better understanding and exercising their governance duties and responsibilities. The public ‐ whether donors, service‐receivers, or other stakeholders ‐ have become more demanding of boards' roles in ethical, legal, and strategy oversight. With this public scrutiny, and the increasingly competitive conditions for securing funding, NFP directors are more conscious of their need for effective governance practices as well as a thorough understanding of their legal obligations and the non‐legal expectations of stakeholders.
While much of the guidance directed at for‐profit corporations may be equally applicable to NFPs, a number of organizations have developed advice and training materials and programs tailored for the NFP sector.
The Institute of Corporate Directors at the Rotman School of Management offers a program in director education specifically for those in the NFP sector.
The Canadian Institute of Chartered Accountants and the consulting firms have customized materials as well.
The Canadian Society of Association Executives publishes Board Governance Classics: A Compilation of Articles, Checklists, Tools and Templates, and Duties & Responsibilities of Directors of Not‐For‐Profit Organizations among other publications and guides for association leaders.
The Ontario Hospital Association (OHA) has taken a lead in addressing governance matters, in various reports on hospital governance and accountability in Ontario.
Through its Governance Leadership Council, the OHA has developed a comprehensive Guide to Good Governance, which provides an overview of the key components of good governance practices, as well as practical templates and tools to support their implementation.
It summarizes governance best practices for hospitals under the following themes.
Consistent with other sources, the guide cites the key areas in which the boards exercise a governance role including strategic planning, financial oversight, risk identification, and mission, vision and values. The guide also covers quality and performance management and measurement as well as succession planning, and the selection and supervision of CEOs.
This is a good example of adopting the best practice and trends in governance to the hospital environment, and it reflects a commitment to support effective government. In a 2008 report on Value‐for‐Money audit of hospital board governance, the Auditor General of Ontario cited the work of the OHA in supporting improved governance.
For his part, the Auditor General also outlined a number of best practices that should be followed including the following:
A number of jurisdictions have codified their expectations for good governance. Alberta and British Columbia are the most advanced in Canada; Newfoundland has made advances in this area as well.
As noted earlier, New Zealand has legislated detailed expectations with respect to appointments, including removal of board members, collective duties of boards, individual duties of members, and conflict of interest disclosure and other ethical matters.
An overview of some of these key trends follows.
Alberta has made significant reforms to its board governance and accountability framework following the report of a Board Governance Review Task Force in 2007. Consistent with the Alberta Public Agencies Governance Act, the government has put in place a comprehensive governance framework that, in addition to describing parameters of agency establishment and accountability, sets out key governance standards and principles. The following are some of the provisions in the framework.
Principles for the appointments process - Appointments are to be based on competency. The government advises the use of a competency matrix developed by the board and approved by the minister, and the involvement of the agency in the selection process as well as the transparency, openness, and consistency of the process. The principles also call for the timeliness of appointments and the diversity of candidates for appointment. Criteria are established for the appointment of elected or senior government officials to agency boards.
Standards for term lengths - For public trust, corporate enterprise, service delivery, and advisory agencies, the maximum consecutive service for directors is 10 or fewer years. For adjudicative agencies, the maximum consecutive service is 12 or fewer years. Renewal will be conditional on performance.
Standards for director orientation and training - All directors are to receive a general orientation to public sector governance, in addition to orientation to the particular business and governance practices of the agency. Recognizing the importance of ensuring that directors understand their roles, government officials, including ministers who work with agencies, are also to be offered an orientation to agency governance.
Standards for agency codes of conduct - Agencies are to develop codes of conduct that are consistent with the public service code of conduct and ethics, conflict of interest disclosure practices, and safe disclosure practices.
Standards for evaluations - The agency is responsible for the evaluations of the performance of the directors and of the success of the board. This is to inform strategic planning and the education of directors and as well pinpoint missing competencies on the board. The Agency Governance Secretariat is responsible for providing the tools and templates to support the evaluation process.
Standards for boards and criteria for appointments - The agency is to establish a system of committees, likely to include audit, human resources, and governance committees.
The Alberta government has set up an Agency Governance Secretariat within Treasury Board to support the implementation of the standards in the governance framework. For example, the secretariat develops and offers governance orientation programs for agency directors, ministers, and departments.
British Columbia has been proactive in addressing issues of the good governance of its agencies, boards and commissions. The government issued a new Appointments Guidelines in 2001, citing recent events in the private and public sectors around the world and important developments in governance, accounting, and other areas leading to a new focus on board performance. In 2005, the government published comprehensive Best Practice Guidelines. The guidelines were published through its Board Resourcing and Development Office (BRDO). They established broad provincial standards for board governance practices in a range of areas.
In addition, the BRDO publishes a series of checklists, resource documents on board committees and other issues, to assist in the professional development of directors. It has also emphasized the importance of the performance of individual directors as they come up for re‐appointment.
The Transparency and Accountability Act is intended to ensure appropriate levels of accountability throughout the public sector, including within agencies and the broader public sector. The Transparency and Accountability Office of the Cabinet Secretariat, responsible for supporting implementation of the Act, publishes a comprehensive Governance Handbook as a resource for board members.
New Zealand's Crown Entities Act, 2004 sets out highly detailed governance and accountability provisions for a variety of government bodies. The accountability framework is described elsewhere in this report. With respect to governance standards, the Act sets out explicit expectations with respect to the following:
There are many instances of good practices among the board‐governed agencies in Ontario, reflecting a concerted effort to improve and ensure effective governance. Some examples include the practices of these agencies:
The recommendations chapter breaks into two sections. The first gives an overview - a full listing of the recommendations. The second section provides a discussion and rationale for the recommendations.
There are 14 recommendations in this report.
In this section you will find a discussion and the rationale behind the recommendations. This section is divided into two parts: Strengthening Agency Board Governance and Accountability, and Improving Ministry and Central Agency Monitoring and Evaluation Practices.
Classified agencies in the advisory and adjudicative categories and some of the regulatory agencies do not have governing boards.
Classified agencies in the categories of operational enterprise, operational service, and some of the regulatory agencies plus certain trust agencies, as well as certain non‐ classified agencies in the provincial electricity sector, do have governing boards.
The mandates of these boards are set out either in legislation or in regulation and through these instruments they have been delegated the authority to oversee the operations of their agencies.
From a good governance perspective, since they have been delegated this authority, it would be appropriate for the government to set out the standard of governance it expects from these boards.
Chapter two of the report describes highlights of the review of advice and guidance on governance from a wide variety of sources in the private sector, the not‐for‐profit sector, the broader public sector, and from other jurisdictions. Based on this material, it is clear that the government can derive a standard framework that all agencies with governing boards should strive toward.
While there was not an audit of governance practices, from the interviews and a review of certain agency governance material, it is evident that many of the agencies with governing boards already have sophisticated governance frameworks. The best practices noted in chapter two would bear this out.
However, the additional measures outlined in this recommendation would further reassure the government that all agencies with governing boards are in fact operating to the highest standards of governance, and that the agencies are clear about governance expectations.
As noted earlier, in 2007 the Public Appointments Secretariat, with the assistance of an external advisory committee, developed the Government Agency Tools document to assist agency chairs with establishing position descriptions, core competencies, codes of conduct, and learning and development for their appointees. As well, an online resource for agencies ‐ the AGency NEtwork Solutions (AGNES) website - has been created by the Ministry of Government Services, although it is limited in its offerings. This work can be built upon to provide more detailed assistance on establishing or refining the proposed governance framework in Recommendation 1.
Although agency governance may be improved and sustained with a clear governance framework, the practice of good governance can only be successful if board members, and most especially chairs of boards, are chosen for their competence and, in the case of chairs, their ability to lead a board.
The calibre of appointees of the agencies interviewed is impressive. The people of Ontario are fortunate that so many qualified people give their time, potentially opening their reputations to public scrutiny through their public service.
While over the years many qualified individuals have given themselves to public service by accepting appointments to agencies, they usually come to government with little or no understanding of how government operates.
The roles and relationships within the ministries, the relationships between the ministries and the central agencies of government, the roles of the civil service versus political staff, and the responsibility of the legislature and its officers form a complex environment that chairs of agencies must understand and translate to their boards. Appointees expect to be held to high standards of ethics, but they may not appreciate the full public service ethos. This is one element of education and development that the government itself must develop.
Similarly, most of the civil servants and political staff who interact with agencies have not themselves served on boards and have not received training about board governance. Any initiatives aimed at ongoing education and development in governance should be available to them so that they approach their advice and analysis from an informed perspective.
Some of the agencies interviewed had quite formal elements of ongoing director education and development. It is obvious that agencies can develop and enhance ongoing education and development in relation to the business of the agency and its environment.
However, when it comes to ongoing education and development of directors in relation to best practices in good governance, it would make sense and be more efficient for the government to offer some centralized support. There are a number of institutions offering governance programs and courses. The government would want to ensure that the type of governance training made available to agency appointees is relevant to the public sector environment. For example, Ryerson's certificate program in public/private management and governance and some of the curricula are directly relevant. Hopefully, a number of suppliers would be responsive to a call for tenders for such a service.
If implemented, this recommendation will ensure support for the detailed development of the governance framework and will assist all agencies in ongoing education and development for directors/appointees.
Agencies with governing boards oversee a wide variety of services and functions.
Typically, there is not much interaction among the agencies, yet they do share common interests in terms of their relationship with government and board governance.
Chairs of adjudicative agencies come together twice a year to discuss common issues. The forum "Circle of Chairs" is thought to be very beneficial for participants.
From time to time, government needs to communicate directly with agencies from all the ministries. Meetings such as these are an opportunity to convey the rationale for government decisions and to give agencies a sense of the broader environment within which government operates.
If implemented, this recommendation would enhance communication between government and the agencies with governing boards, and among the boards themselves on topics of interest.
All jurisdictions have put in place accountability frameworks for the agencies they have created. Some are complex; some are set out in legislation. At the heart of all of these frameworks, laws, and policies is the acknowledgement that governments must set out who is responsible for what when it delegates authority to agencies.
This is done to ensure that the delegation is carried out properly, but of greater importance, it also allows the legislature and the public to understand how this delegation is expected to work.
These laws and frameworks are meant to clarify for the legislature and the public what agencies or ministers should be accountable for, a very important distinction.
The Adjudicative Tribunals Accountability, Governance and Appointments Act (see Appendix D) sets out the public accountability documents and how they must be made public; governance accountability documents; and the appointment standards and process for adjudicative agencies. This legislation sets very clear accountability and transparency expectations for these agencies.
Classified agencies are subject to the Agency Establishment and Accountability Directive as well as certain laws such as the Financial Administration Act and other directives such as the Government Appointees Directive. Other trust agencies, such as the Workplace Safety and Insurance Board and other non‐classified entities, such as those in the electricity sector, are covered by the Public Sector Expenses Review Act.
The array of policies and separate laws that apply to different categories of agencies does not help the public's nor the media's understanding of who should be held accountable when things go wrong. If boards are given clear mandates, clear standards of governance and clear accountabilities, they should be held accountable and responsible for their own actions. Transparency around agencies can be improved with clarity about accountability mechanisms.
As stated in the terms of reference for this review, the government wishes to assure itself that all agencies are operating with an appropriate governance and accountability framework.
A suggested governance framework is set out in Recommendation 1. With regard to the current accountability framework and policies, no policy gaps have been identified. However, the accountability framework for all board‐governed agencies could be enhanced, and the public's understanding of that framework could be improved, by establishment in legislation.
If legislation covering board‐governed agencies is established, the only category of agencies whose governance and accountability is not set out in legislation would be the regulatory category. This category requires further consideration by government.
The review of the policies that apply to agencies indicates that there are some inconsistencies regarding which policies apply to which category of agency. To an external reviewer these inconsistencies have no apparent rationale.
Similarly, there are some practices such as who appoints the CEO or who has the power to set the CEO's compensation, which vary among agencies in the same category.
A practice observed in several board‐governed agencies is the appointment of civil servants as voting members. There are pros and cons to this practice. For example, having a civil servant from the responsible ministry sit on the agency board may provide the agency with valuable context for its decision making. On the other hand, if the agency is to be held accountable for its own governance and operations, having someone from government on the board may confuse accountabilities and place the civil servant in an awkward role. On balance this is not a good practice. It may be that all of these differences result simply from when each agency was established, or there may be some rationale for the differences.
In either case, it would be timely to take a more detailed look at these differences to obtain greater clarity.
The memorandum of understanding and the agency annual business plan are the most substantial requirements of the accountability framework for agencies.
Aside from the legislation, regulation or Order in Council establishing the agency, these two elements are crucial to the success of the agency/ministry relationship and to their joint assurance to the legislature and the public that the operations of the agency are being run appropriately and efficiently.
The memorandum of understanding sets out, for the longer term, the mandate for the agency, expected outcomes, financial arrangements where applicable, communications and meetings protocols and so on. For more information, see Appendix B, Agency Establishment and Accountability Directive, Schedule F, page 24.
A number of the MOUs were reviewed. It was noted that while the quality of the documents overall was reasonably high and they were in apparent compliance with the governing directive, there were some differences in approach.
While the MOUs set out the responsibilities of the minister and the agency board, and the requirements of the agency are detailed, certain responsibilities of the minister are not always evident, e.g., to provide timely decision making or the timely tabling of annual reports.
Given the vast differences in agency mandates, it is not suggested that the MOUs be identical, but the government may wish to review the MOUs to ensure that there is good balance in the statement of accountabilities.
The one area where there can be more consistency in MOUs is in the adaptation of the proposed governance framework for board‐governed agencies. This can be accomplished as MOUs are updated on change of minister or agency head.
In contrast to the multi‐year nature of the memorandum of understanding, the agency annual business plan provides the opportunity for the minister to determine whether the agency is on track to achieving financial, revenue and other agreed upon goals.
Moreover, the agency's business planning process should provide the opportunity for the agency to place the plan in a business, stakeholder, client, and regulatory context for the minister. Discussion around the business plan is the opportunity for the minister to restate expectations, and to give the agency insight into the government environment, including financial and political constraints. A formal written response to the business plan would ensure the board is clear about the government's expectations.
A few ministries provide their agencies with an annual "mandate letter". When this is done, the written response could address both the business plan and the expectations related to mandate.
The recent public emphasis on procurement and expense issues in agencies has the potential to obscure the important discussion that should take place around whether the agencies are in fact achieving the results they were set up to reach, and, indeed, whether their current mandates are still appropriate.
The workload of ministers today is far greater than at any time in the past. Ministers must judge how to spend their oversight time in relation to their agencies. Face‐to‐face meetings, however with the agency board, or the agency chair to discuss the annual business plan is an extremely important way for the minister to exercise informed, strategic oversight with board‐governed agencies and to determine the performance of the board.
This recommendation would reinforce the importance of having a focus on results during this personal interaction.
As noted above there has been recent public emphasis on procurement and expense issues in agencies.
While the terms of reference for this review did not include agency expenses or procurement, the ability of the agencies to monitor such practices, thereby enhancing their accountability, would be strengthened if their internal or external auditors, or their ministry's internal auditors, provided regular reports to the board on these topics.
The board‐governed agencies have many vehicles to convey information to the public, to clients, and to stakeholders. Most agencies have websites that convey information on a variety of aspects of their operations and programs on a timely basis.
An agency's annual report is still an important public information document that is required by either the agency's legislation or the Agency Establishment and Accountability Directive. The AEAD sets out the timeframes within which agencies must submit their annual reports to the minister, and within which the minister must table these in the legislature. If this process is not completed on a timely basis, it diminishes the legislature's and the public's ability to judge the agency's performance.
During the review it became clear that these timeframes were not being universally adhered to.
If the government still wishes to require agencies to compile annual reports, this recommendation, if implemented, will see that this is accomplished.
10. Each ministry formally establish a designated lead executive to assist the minister, the Minister's Office, and the deputy minister in fulfilling their accountability for its agencies and to provide single window coordination point for agencies. This lead executive would be responsible for the internal coordination of the following:
The role of deputy ministers in relation to agencies is framed by the Agency Establishment and Accountability Directive.
The directive sets out the deputy's role in supporting the minister with his/her responsibilities, and it details the deputy's controllership role. The deputy minister's oversight role is clear in the directive. However, with the exception of the requirement to "facilitate regular briefings and consultations" between the chair and the minister or the chair and ministry staff, the deputy minister's role in providing ministry support or in coordinating overall interaction is not touched on.
The directives and policies governing agencies are very comprehensive, but will only bring about the desired results if the relationship between ministries and agencies is mutually respectful and supportive. Such a relationship must be based on an acceptance and a clear understanding of each others accountabilities, as well as on the principles of openness based on trust, and most importantly, frequent and frank communication.
The way in which ministries oversee and coordinate agency interactions varies greatly. Given the wide variety of agency functions and range in size and capabilities of ministries, there is no one organizational model to oversee and support the agency relationship that would work in every ministry.
In light of the importance of the ministry/agency relationship, it would be good practice for all ministries to embrace a "lead executive" approach to the relationship. By this, it is meant that one senior position be designated as the lead to coordinate support for all aspects of the ministry/agency interface. This does not mean that agency or ministry staff is limited in their contacts, but that from the ministry perspective, the "lead executive" makes sure that appointments and reports are processed in a timely manner, key data on agencies is collected and kept‐up‐to‐date, information is provided, and meetings are regularly held.
In some ministries the lead would be the chief administrative officer, in others a line assistant deputy minister. In any case, the responsibility should be attached to an office, not a name so that continuity is not lost on turnover of staff.
In chapter one of the report, there is a description of the role of the central agencies of government with respect to all agencies. The Premier's Office is supported in the appointments process by a group of civil servants in the Ministry of Government Services.
The roles of Cabinet, Treasury Board/Management Board of Cabinet and the Minister of Finance are set out in the Agency Establishment and Accountability Directive.
All of these existing responsibilities are essential, but the government's corporate oversight can be improved with better coordination, and by taking a different corporate perspective of agencies.
There are some functions carried out by the Minister of Finance that would obviously remain in the Ministry of Finance. However, there a number of other functions that would be better delivered if they were centralized within one office in one of the central agencies. For example, currently the civil servants who support the Premier's Office in the appointments process reside in one location and the staff responsible for agency policies in another.
An enhanced governance framework is recommended for board‐governed agencies as well as support for them with new governance tools and new orientation, and ongoing education and development.
If the existing functions were combined and built upon, sustainable improvements could be made over time. This organization would work in collaboration with ministries and provide a focus of expertise and assistance in agency support and oversight.
The oversight responsibilities of ministries are clearly set out in the Agency Establishment and Accountability Directive. The directive mentions the role of the Secretary of the Treasury Board/Management Board of Cabinet with regard to "documentation demonstrating compliance".
Nevertheless, it is not clear that the Premier or Cabinet is provided with reports on the quality and consistency of ministry compliance.
It is important that a central agency office dedicated to agency management have the expertise to provide corporate advice on the ministries' compliance with their oversight roles.
This does not mean that new or additional reports need to be generated by ministries, but that an insightful analysis is available for the Premier and Cabinet.
The recommendations above speak to better corporate coordination in the management of agencies.
A different corporate perspective on agencies would recognize that not all ministries have the capacity or the resources to uniformly determine whether operational agencies, classified or not, are in fact operating efficiently, or are necessarily using appropriate performance measures to demonstrate results.
Given the operational costs of these agencies and, in some cases, their revenue potential, the government should have a sophisticated data base of information on agencies and certainly on the more substantial ones. A data base would give the government the ability to gauge whether or not the Province is deriving maximum return, or citizens are deriving maximum service from the agencies. If the government is to exercise informed, strategic oversight of all agencies, it should have the comprehensive corporate analytical capability required to do so.
Furthermore, the central organization could be a valuable resource in providing expert advice to ministries and Treasury Board/Management Board of Cabinet during the entire lifecycle of an agency. For example, when the creation of a new agency is contemplated, a central organization would help the government to take a step back and to ask what level of control it wishes to exert over the new entity.
In other jurisdictions, and in the past in Ontario, attempts have been made to fix sunset dates for comprehensive reviews of agencies. These reviews were not seen as effective and, on occasion, became paper exercises. Nonetheless, it may be useful when establishing an agency to fix a timeframe for its dissolution, if that is known at the outset. In Australia, departments are advised to consider establishing sunset clauses in a newly‐created agency's constituting legislation in order to provide for winding up the agency at a later date.
Whatever process is used to assess the relevance and performance of agencies, some level of expertise and analysis is required to provide a corporate perspective that fulfills Cabinet's strategic oversight responsibilities. Emphatically, this is not intended to supersede or lessen ministry oversight.
The Ontario Internal Audit Division has undertaken a number of individual and corporate audits of agencies. The division is developing an understanding of the agencies and expertise in agency management. It can be a source of expertise on audit planning and risk assessment processes.
The division could play a role in assessing the progress that agencies are making in achieving high governance standards. The division may determine that external assistance is required in some aspects of this work.
The objective of this report is to provide government with recommendations on how to strengthen the governance framework and accountability mechanisms of agencies and how to improve ministry and central agency monitoring and evaluation practices with regard to agencies.
Ontario's agencies are diverse and complex. For the most part, they operate at the highest standards and set many best practice examples for government agencies in other jurisdictions.
Agencies play an important role in delivering government programs and services. They are established for one of three primary reasons:
The first category, the advisory agencies, do not have operating budgets and are subject to less detailed accountability requirements than other groups of classified agencies.
With the second category, the adjudicative agencies, the government has made significant improvements in the operation, accountability requirements, and support of these bodies.
It is on the third category of agencies, those that have governing boards responsible for delivering a service or operating an enterprise on behalf of government that the review focused.
This category of agency is probably the most complex because of the balance required between independence and accountability.
The government has already introduced strong measures such as the Public Sector Expenses Review Act, 2009 in response to a few recent situations within the board‐governed agencies.
As well, the revised Agency Establishment and Accountability Directive, 2010 provides significantly more rigorous direction and clarity on roles and responsibilities, and accountability mechanisms.
The recommendations provided in this report build on the measures already taken by government and further strengthen the governance and accountability framework for agencies as well as the roles of ministries and central agencies of government.
At the heart of all the recommendations is the acknowledgement that government must set out who is responsible for what, when it delegates authority to agencies. It is vital that the balance of accountabilities between agencies and government is clearly established, set out and understood by all parties.
In considering the recommendations in this report, the government must step back and ask itself what type of control it wishes to exert.
When establishing an enterprise or service agency, the understanding is that the government wishes to delegate operational control to a responsible board, i.e., the government continues to be responsible for strategic control but does not exert operational control.
If the service or the enterprise agency is so closely linked to government that the government believes it needs to exert operational control, then that service or enterprise should be brought back into the government ministry structure.
Given the key benefits of the agency structure, such as special expertise and opportunities for innovation, the government is likely to continue to establish agencies. It can do so successfully if it has the framework and processes it requires to exercise informed, strategic oversight.
When the government chooses to deliver the service or operate the enterprise through an agency structure, then the following should be considered:
There is an equal onus on government and the agencies to demonstrate to the public that Ontario's agencies are operating in the public interest. In the end however, it is government that is held accountable by the public when problems occur in agencies.
In calling for this review, the government's objective was to ensure that all its agencies operate within an appropriate governance and accountability framework so that the public will have confidence in the value and the integrity of the province's agencies.
If implemented, the recommendations in this report will lead to a much stronger governance and accountability framework.
However, to ensure good governance over the long term and to maintain continued public confidence, the government must be prepared to review these accountabilities from time to time.
One final consideration for government would be that it undertakes a more extensive review of all agencies to determine whether their mandates are still relevant and whether overall efficiencies can be achieved in this sector.
A. KEY INFORMANT INTERVIEWS
B. LIST OF CLASSIFIED PROVINCIAL AGENCIES
C. ADJUDICATIVE TRIBUNALS ACCOUNTABILITY, GOVERNANCE AND APPOINTMENTS ACT
D. AGENCY ESTABLISHMENT AND ACCOUNTABILITY DIRECTIVE
Alcohol and Gaming Commission of Ontario
Cancer Care Ontario
eHealth Ontario
Environment and Land Tribunals Ontario
Health Services Appeal and Review Board/
Health Professions Appeal and Review Board
Liquor Control Board of Ontario
Metrolinx
Ontario Clean Water Agency
Ontario Educational Communications Authority (TVO)
Ontario Energy Board
Ontario Financing Authority
Ontario Human Rights Commission
Ontario Infrastructure Projects Corporation (Infrastructure Ontario)
Ontario Lottery and Gaming Corporation
Ontario Pension Board
Ontario Racing Commission
Ontario Realty Corporation
Ontario Science Centre
Workplace Safety and Insurance Appeals Tribunal
Workplace Safety and Insurance Board
Hydro One
Ontario Power Authority
Ontario Power Generation
Auditor General of Ontario
Mr. Jim McCarter
Chief Administrative Officers Roundtable
Chiefs of Staff to Ministers
Conflict of Interest Commissioner
Justice Sidney Linden
Deputy Ministers Council
Rotman School of Management
Clarkson Centre for Business Ethics and Board Effectiveness
Mr. David Beatty, Conway Director and Professor of Strategic Management
University of Manitoba
Hon. Reg Alcock
REPORT OF THE SPECIAL ADVISOR ON AGENCIES
APPENDIX B
Management Board of Cabinet
Effective January 26, 2010
Corporate Policy Branch
Human Resource Management and Corporate Policy Division
Ministry of Government Services
TABLE OF CONTENTS
PURPOSE ........................................................................................... 1
APPLICATION AND SCOPE............................................................ 1
PRINCIPLES ...................................................................................... 2
ACCOUNTABILITY FRAMEWORK .............................................. 2
RISK-BASED MANAGEMENT AND ACCOUNTABILITY
APPROACH ........................................................................................ 3
AGENCY ESTABLISHMENT........................................................... 3
MANDATORY REQUIREMENTS:....................................................................3
TB/MBC APPROVAL.........................................................................................3
TB/MBC BUSINESS CASE
...............................................................................4
CONSTITUTING INSTRUMENT
.....................................................................4
STATUTES OF PARTICULAR APPLICATION TO GOVERNMENT.............4
CORPORATE STATUS......................................................................................4
CROWN AGENCY
STATUS.............................................................................5
FINANCIAL MANAGEMENT
..........................................................................5
MEMORANDUM OF UNDERSTANDING (MOU)
.........................................5
REMUNERATION
.............................................................................................5
SHORT-TERM BODIES
....................................................................................5
AGENCY ACCOUNTABILITY ......................................................... 6
MANDATORY REQUIREMENTS:....................................................................6
RISK ASSESSMENT EVALUATION ...............................................................6
MEMORANDUM OF UNDERSTANDING (MOU)
.........................................6
GOVERNMENT DIRECTIVES AND POLICIES...............................................7
ANNUAL
BUSINESS PLAN..............................................................................7
ANNUAL
REPORTS...........................................................................................7
FINANCIAL MANAGEMENT AND
REPORTING...........................................8
AUDITS
...............................................................................................................8
ATTESTATION....................................................................................................8
ROLES AND RESPONSIBILITIES ................................................. 9
CABINET..............................................................................................................9
TREASURY BOARD / MANAGEMENT BOARD OF CABINET.......................9
SECRETARY OF TREASURY BOARD / SECRETARY OF MANAGEMENT
BOARD OF CABINET ........................................................................................9
WITHIN MINISTRIES ..................................................................... 10
MINISTER ...........................................................................................................10
MINISTER OF FINANCE ...................................................................................11
DEPUTY MINISTER OF
FINANCE....................................................................11
DEPUTY
MINISTER............................................................................................11
Agencies classified under this directive are part of the Government of Ontario and represent a key method for the Ontario government to deliver its services to the public.
This directive indicates how new agencies are to be established and classified. It also details the accountability framework in which ministries and agencies operate, supporting transparency between ministries and agencies. In addition, this directive aligns oversight with risk, reducing exposure to risk while requiring ministries to have strategies to manage it.
This directive applies to all ministries and all agencies classified under this directive, to which the government makes the majority of the appointments.
The directive:
Definition of Agency
For the purposes of this directive, "Agency" means a provincial government entity that is not organizationally part of a ministry, and:
Classified agencies that administer transfer payment programs must also comply with those requirements of the Transfer Payment Accountability Directive that govern the operations of transfer payment programs and the relationship between the funding classified agency and the transfer payment recipient organization.
Classification
Based on primary function, all agencies are classified under this directive as:
For further details on agency classification, please see Schedule A.
Government is accountable for protecting the public interest. The higher the potential risk posed by a classified agency, the greater the need for oversight to mitigate such risk and also recognize the level of public interest and obligation of financial management.
Ministries and agencies respect their differing roles and responsibilities in the delivery of public services through agencies.
Ministries balance the need for the agency's operational flexibility from the ministry with the Minister's accountability for the agency to Cabinet and the Legislative Assembly.
A risk-based approach is to be used to manage agencies. Agencies employ a risk framework when making operational decisions. They are responsible for ensuring that funds are spent effectively, efficiently, and are used towards the provided purpose. Value for money is expected in the expenditure of government funds.
Transparency guides good governance and accountability practices for ministries and agencies.
A Minister is responsible to Cabinet and the Legislative Assembly for each agency.
Central agencies, such as the Ministry of Finance and the Ministry of Government Services, are accountable to their ministers and to Cabinet for oversight of ministries' responsibilities regarding classified agencies.
The Chair of an agency reports to the Minister for the agency and its activities.
Agency Boards are accountable, through the Chair, to the Minister; Executive directors and Chief Executive Officers are accountable to the Agency's Board and report to the board through the Chair.
Deputy Ministers support Ministers in discharging their responsibilities. They are responsible for ensuring the organizational capacity to monitor agencies and in ensuring that agencies manage any risks appropriately.
Key to the management of classified agencies is the overlay of a risk-based approach. Risk management practices provide the opportunity to establish the optimum level of oversight, control and discipline enabling ministries and classified agencies to manage risk in changing environments and help provide the proper level of assessment.
Risk management helps ministries and agencies identify risks, assess exposures and develop appropriate action plans to help ensure classified agencies meet business objectives.
Accountability of the Minister for each agency cannot be delegated. However, agency oversight activities can be delegated to appropriate ministry officials. Consistent with this principle, risk-based reviews of any agency can be requested by TB/MBC or the Minister.
The accountability cycle, as noted in the Accountability Directive, 1997, consists of:
Please see Schedule B for further details.
TB/MBC APPROVAL
Treasury Board/Management Board of Cabinet must approve the establishment and classification of any agency. TB/MBC must also approve the merger or termination of agencies as well as any change in the mandate of an agency.
TB/MBC may require a hold back of allocated agency funding for non-compliance with the mandatory requirements of this directive.
TB/MBC BUSINESS CASE
A submission to TB/MBC to establish a new agency must have a business case containing the following criteria:
(See Schedule C for a full list of criteria for agency establishment)
CONSTITUTING INSTRUMENT
In order to provide an appropriate legal framework, all agencies require a constituting instrument (under or by statute, regulation, or Order in Council). The constituting instrument setting out the agency's mandate and authority must accompany the submission. (See Schedule D for further information about constituting instruments.)
STATUTES OF PARTICULAR APPLICATION TO GOVERNMENT
In order to establish the applicability of statutes of particular application to government, a TB/MBC submission to establish a new agency must identify whether an agency is to be designated specifically under such statutes. See schedule E for a list of statutes of particular application.
CORPORATE STATUS
Corporate status must be addressed in the submission to be reviewed by TB/MBC when establishing a new agency.
CROWN AGENCY STATUS
Ministries must identify in a submission to TB/MBC whether or not a proposed new agency will be a Crown agency or otherwise identify its proposed legal relationship to the Crown.
FINANCIAL MANAGEMENT
Ministries must identify the source of funding, fiscal impact and the agency's Consolidation/Presentation in Public Accounts in TB/MBC submissions proposing the establishment of new agencies. The business case must also identify the government accounting and financial policies that apply to the agency. Deviations from government accounting and financial policies must be explicitly stated and a rationale provided.
Ministries must identify the cost of establishing and operating the agency, including the incremental overhead costs and the costs of increased ministry oversight
MEMORANDUM OF UNDERSTANDING (MOU)
An MOU identifying the applicable directives and policies must accompany the TB/MBC submission seeking approval for the establishment of a new agency in order to ensure a full understanding of the relationship between the Minister and the agency. (See Schedule F on information on the required content of an MOU.)
REMUNERATION
Remuneration for government appointees must be authorised by an order in council. Orders in council identifying remuneration for all government appointees to a classified agency must accompany the TB/MBC submission.
SHORT-TERM BODIES
Bodies established by government within a mandate of less than three years are not considered to be classified agencies. However, short-term bodies require:
All agencies classified under this directive are accountable for using government funds with efficiency, effectiveness, and economy for the purpose of fulfilling the agency's mandate. Ministries may institute additional accountability requirements on a classified agency, based on the agency's risk assessment.
Ministries must respect the independence of the decisions made by adjudicative and regulatory agencies.
In order to ensure effective oversight and accountability, ministries must have in place accountability tools for every classified agency. These tools allow ministries the opportunity to determine that what is being delivered to the public meets government standards of timeliness, effectiveness, economy, and quality.
RISK ASSESSMENT EVALUATION
Ministries and agencies must assess risks in each of the risk categories identified in the Guide to the Risk-based Approach in the Agency Establishment and Accountability Directive which supports this Directive. Ministries must also develop risk management plans to manage each applicable risk.
Ministries will report to TB/MBC on each agency's high risk categories, including a description of each high risk, the reason it is considered to be a high risk, and what management plan is in place to manage the risk. The Guide to the Risk- based Approach in the Agency Establishment and Accountability Directive will identify the process through which the agency risks will be reported to TB/MBC.
See Schedule B for further details.
MEMORANDUM OF UNDERSTANDING (MOU)
All agencies require a memorandum of understanding that reflects the accountability framework in addition to the parties' mutual understanding of the responsibilities of the ministry and the agency. A memorandum of understanding is between the responsible minister and the agency and expires after five years from the date of the minister's signature. The MOU will remain in force for no more than six additional months until a signed MOU is provided to the Secretary,
MBC. (See Schedule F for further details.)
Regulatory agencies, operational services, and operational enterprises must submit new MOUs to TB/MBC for review and approval.
For MOUs that have received TB/MBC approval, the MOUs must be signed within three months of TB/MBC approval or, for a new agency, within three months of its operational functioning.
Upon a change in the minister or the chair of the agency, the MOU must be affirmed by the new party to the MOU. A letter of affirmation must be provided to the Secretary, Management Board of Cabinet, within six months of the new party's commencement.
GOVERNMENT DIRECTIVES AND POLICIES
Agency MOUs must indicate the government directives and policies, including accounting and financial policies that apply to the agency. Deviations from stated directives and policies must be explicitly stated and rationale provided. In order to define the obligations and authority of ministries and agencies, directives and policies are issued by the Ministry of Finance, the Public Service Commission, and Treasury Board/Management Board of Cabinet. Directives and policies are key tools for ministry controllership of classified agencies. Ministries must ensure compliance with legislation, directives, accounting and financial policies.
Guidance on the application and scope of directives is provided in Schedule G.
ANNUAL BUSINESS PLAN
In order to ensure understanding of agency objectives and operations, all agencies other than advisory agencies must annually develop a business plan, which includes a financial budget covering a minimum of three years from the current fiscal year. The business plan must be approved by the Minister. The business plan must include a risk management plan per the requirements of this Directive and the Guide to the Risk-Based Approach. The responsible minister or TB/MBC may also request an agency business plan to be brought forward for review, as required.
For the required elements of an annual business plan, see Schedule H.
ANNUAL REPORTS
All agencies, except advisory agencies, must submit an annual report to the responsible minister within 120 days of its fiscal year end in order to inform the Legislative Assembly and the public of the agency's activities. When the agency does not have a governing board, it must submit its report to the minister within 90 days. The ministry must table an agency's annual report in the Legislative Assembly within 60 days of receiving the annual report. (When the Legislative Assembly is not sitting, the Minister will file the report with the Clerk's Office within 60 days of receipt.
A financial statement that has been audited or subject to another appropriate level of external assurance must be tabled in the Assembly as part of the agency's annual report. The financial statements must contain actual results, variances and explanations of the variance against estimates.
After review by the ministry, the following must be submitted to Office of the Provincial Controller for the preparation of the Province's Public Accounts, within the timelines established each year to meet Public Accounts deadlines:
See Schedule I for the required elements of an agency annual report.
FINANCIAL MANAGEMENT AND REPORTING
Agencies must report financial information in accordance with the Province's stated accounting policies issued by the Office of the Provincial Controller.
Agencies are required to submit to the Ministry of Finance their salary information according to the Public Sector Salary Disclosure Act. This information must be submitted according to the Ministry of Finance's specified filing directions and schedule.
With the exception of Advisory, Adjudicative, and Regulatory agencies (without a governing board), agencies are required to submit quarterly expenditure budget - variance reports to the responsible Minister.
TB/MBC can request additional and more regular financial and non-financial reporting from the agency to protect the public interest.
AUDITS
In order to further financial accountability, all agencies, except advisory agencies, are subject to an external financial statement audit when the agency has any of the following attributes:
At any time, an agency classified under this directive is subject to periodic review and Value-for-Money audit by the Auditor-General of Ontario, under the Auditor General Act . (In some cases, the Auditor General is the auditor of record.)
At any time, an agency classified under this directive is subject to a periodic review and internal audit by the Ontario Internal Audit Division.
For further details about auditing requirements, see Schedule J.
ATTESTATION
Ministers and deputy ministers are required to sign and submit to the Secretary, Management Board of Cabinet, an annual attestation indicating that the agencies that are a responsibility of their ministry are in compliance with the mandatory requirements of this directive.
With this attestation, ministers and deputy ministers are also to provide documentation demonstrating compliance with this directive by indicating each agency's compliance with each mandatory requirement in a report to the Secretary, Management Board of Cabinet.
CABINET
Cabinet is accountable to the Legislative Assembly, to the Crown, and the public for:
TREASURY BOARD / MANAGEMENT BOARD OF CABINET
Treasury Board and Management Board of Cabinet are accountable to the Cabinet for:
SECRETARY OF TREASURY BOARD / SECRETARY OF MANAGEMENT BOARD OF CABINET
The Secretary of Treasury Board and the Secretary of Management Board of Cabinet are accountable to the Chair of Treasury Board / Management Board of Cabinet for:
MINISTER
The Minister is accountable to Cabinet and to the Legislative Assembly for:
Controllership:
A Minister may delegate authority to a Deputy Minister or to any other appropriate person, for matters that fall under the purview of the Minister under this directive, subject to the limitations, conditions, and requirements that the Minister sets out in a delegation.
MINISTER OF FINANCE
The Minister of Finance is accountable to Cabinet and to the Legislative Assembly for:
DEPUTY MINISTER OF FINANCE
With regard to all agencies, the Deputy Minister of Finance is accountable to the Secretary of the Cabinet and to the Minister of Finance for:
DEPUTY MINISTER
The Deputy Minister is accountable to the Secretary of the Cabinet and the Minister for:
Support for the Minister:
Controllership:
In addition, when an agency is prescribed as a Commission public body with employees hired under Part III of the Public Service of Ontario Act, 2006, the Deputy Minister has some responsibilities for agency staff.
The Deputy Minister may delegate authority to an Assistant Deputy Minister, Chief Administrative Officer or any other appropriate person, for matters that fall under the purview of the Deputy Minister under this directive, subject to the limitations, conditions and requirements that the Deputy Minister sets out in a delegation. Such delegations are guided by the Delegation of Authority Key Directive.
CHAIR
The Chair is accountable to the responsible Minister for:
AGENCY BOARD (where applicable)
Note: Not all agencies have governing boards. Advisory and Adjudicative agencies typically do not have boards; some regulatory bodies do not have boards.
An Agency Board is accountable for oversight and governance of the agency, through the Chair, to the Minister for:
EXECUTIVE DIRECTOR / CHIEF EXECUTIVE OFFICER OF A CLASSIFIED
AGENCY
The Executive Director / Chief Executive Officer of an agency is accountable to the Chair for:
When the ED/CEO is appointed by the Lieutenant Governor in Council, the position is also accountable, through the responsible minister, to Cabinet.
When the ED/CEO is employed under Part III of the Public Service of Ontario Act, 2006 , the position is also accountable to the Deputy Minister of the responsible Minister.
Agencies are classified according to their primary function.
Advisory Agency
Provides ongoing information and advice to assist in the development of policy and / or in the delivery of programs.
Crown Foundation
Solicits, manages, and distributes donations of money or other assets donated
for a named organization in whose interests the Foundation has been
established. In this Directive, "Crown Foundation" includes only a foundation
established under the Crown Foundations Act or under the University Foundations Act.
Before establishing a Crown Foundation, ministries must obtain further direction from the Office of the Provincial Controller.
Adjudicative Agency
Makes independent quasi-judicial decisions and resolves disputes on the
obligations, rights, and responsibilities of an individual, business, or corporate
body against existing policies, regulations, and statutes. It may also hear appeals against previous decisions.
Regulatory Agency
Makes independent decisions (including inspections, investigations,
prosecutions, certifications, licensing, rate-setting) that may limit or promote the
conduct, practice, obligations, rights, responsibilities of an individual, business, or corporate body.
Operational Service
Delivers goods or services to the public usually with no, or only minimal, fees.
Operational Enterprise
Sells goods or services to the public in a commercial manner (including, but not necessarily, in competition with the private sector).
Trust Agency
Administers funds or other assets for beneficiaries named under statute.
Before establishing a Trust agency, ministries must obtain further direction from the Office of the Provincial Controller.
The Directive requires a risk-based approach to be used to focus ministry and central agency resources on higher risk agencies and to ensure compliance with Directive requirements.
Ministers and ministries are accountable for working with their agencies to ensure effective management of agency risks.
The requirements for risk assessments under the risk-based approach are:
The risk-based approach should include an assessment and analysis of financial and fiscal implications and appropriate mitigation strategies.
While the Directive requires the adoption of a risk-based approach to managing the ministry-agency relationship, the directive does not prescribe a methodology to be used for risk assessment.
The purpose of Ministries' risk assessment reporting to TB/MBC is to identify any high risks for agencies and the management plans in place to address those risks. On the basis of these risk assessments, TB/MBC may require further information from the Ministry or direct that corrective action be taken. TB/MBC may also, on the basis of agency compliance data provided by the Ministry, direct the Ministry to take action including providing a timetable for achieving compliance or to report back within a specified period of time confirming that compliance has been achieved.
(See Guide To The Risk-Based Approach In The Agency Establishment And
Accountability Directive for further details.)
1. Establishing a classified agency
TB/MBC submission
The establishment, merger, and termination of all agencies must be approved by Treasury Board/Management Board of Cabinet through a submission signed by the responsible Minister and Deputy Minister. A TB/MBC submission is also required to establish subsidiaries of existing agencies or to acquire controlling interest in an existing entity.
Submissions to TB/MBC for establishing a new classified agency must provide a sound business case, including an extensive financial assessment, the delivery options for providing the service or product and explaining why the recommended method of delivery is an agency.
Characteristics of a classified agency include:
Government control
Operational flexibility
Financial flexibility
Human resource flexibility (not for Commission public bodies)
Administrative flexibility
In addition, the business case for establishing a classified agency must show how the proposed agency meets the following criteria:
Supporting Documentation
Ministries seeking TB/MBC permission to establish a new agency must provide with the submission the following documentation:
2. Merger or termination of agencies
TB/MBC submission
Proposals to merge agencies, to change the mandate of an existing agency, or to terminate an agency must be in the form of a submission to TB/MBC and be supported by a business case. Approval from a Cabinet policy committee may be required before proceeding to TB/MBC.
The submission must outline the financial and human resource impacts of the proposed merger or termination and also detail the ministry's plans for the disposition of any assets of the agency, the completion by the agency of any outstanding responsibilities, and the end of any government appointments.
In addition, TB/MBC or Cabinet may approve or direct the termination of an agency and may require a report-back to TB/MBC.
Where a report-back to TB/MBC is not required, the Deputy Minister will submit a report to the Secretary of Management Board on the wind-down of an agency immediately following the disposition of any assets of the agency, the completion by the agency of any outstanding responsibilities, and the end of any government appointments.
Supporting documentation
In order to terminate, merge, or change the mandate of any agency, the appropriate legal instrument (statute, regulation, order in council) necessary to rescind or amend the constituting instrument must accompany the submission.
3. Liaison with staff from central agencies
Ministries are encouraged to consult early in the planning process with Treasury Board Office and MGS staff for advice on TB/MBC requirements.
The constituting instrument (by or under a statute, regulation, or Order-in-Council) for a proposed new agency must accompany the TB/MBC submission to establish a new agency.
The constituting instrument includes the powers, accountability mechanisms, and responsibilities that are appropriate for the class of agency to which the agency is assigned and that have been justified in the submission to MBC.
Existing statutes and regulations apply to a new agency unless a statute specifically provides for an exemption.
Since classified agencies are part of the government of Ontario, they may be subject to some or all of such statutes as:
In addition, there are acts that require designation by regulation or Order in
Council:
When establishing an agency, ministries should indicate the statutes under which the agency should be designated.
In addition, the Memorandum of Understanding between the ministry and the agency must indicate which of these statutes apply to the agency.
A memorandum of understanding is an important controllership tool since it reflects the accountability framework that exists between the responsible minister and the agency. It clarifies the roles, relationships, and mutual expectations within the framework. The MOU also notifies readers of the accountability mechanisms in place to ensure good governance and accountability. While it is generally not intended to serve as a legal contract that is enforceable by the courts, it is an administrative agreement that serves as an important tool that promotes mutual understanding of the roles and responsibilities of each party.
MOUs must be signed within three months of TB/MBC approval or, for a new agency, within three months of its operational functioning. The original copy of the MOU is to be held by the ministry's legal branch. A copy of the signed MOU is to be shared with the Secretary, Management Board of Cabinet.
It is good practice to ensure that all of the information necessary to understand the MOU is within the MOU. It is not helpful when readers must reference other documents in order to understand the meaning and impact of the MOU.
An MOU for an advisory agency must contain:
An MOU for an advisory agency must indicate that all TB/MBC and Ministry of Finance directives and policies apply. All MBC and Public Service Commission
directives under the Public Service of Ontario Act, 2006, apply when the agency has been designated as a Commission public body under the Public Services of Ontario Act, 2006.
An MOU for all other classifications of agencies must contain the following sections:
A schedule of the applicable statutes of particular application must be attached to the MOU. Please see Schedule E for information on statutes of particular application.
A schedule of the specifically applicable directives, policies, and guidelines (including accounting and financial polices) must be attached to the MOU. Please see Schedule G on information regarding the applicability of directives.
Please note that only the responsible minister and the agency chair sign the MOU in order to avoid confusion as to the ultimate responsibility for execution of the MOU's provisions.
(See Guide To Developing a Memorandum of Understanding for Agencies for further details.)
Most TB/MBC directives differentiate among the types of agencies in their Application and Scope section, noting those to which the directive automatically applies and those to which it applies only when noted in the Memorandum of Understanding between the agency and the minister.
Ministry of Finance Directives
The following Ministry of Finance (FIN) directive applies to all classified agencies:
Any Classified agency that is funded by the Consolidated Revenue Fund is bound by all Ministry of Finance policies, directives, and guidelines.
TB/MBC Directives
There are five TB/MBC directives that apply in their entirety to all classified agencies:
In addition, all classified agencies must be in compliance with the Procurement Directive, which applies to an agency in whole or in part, depending on criteria set out in that directive.
Agencies that use the Government of Ontario Information Technology Network are subject to all IT directives.
Agencies that are Commission public bodies must follow all MBC and PSC Human Resources directives.
Advisory and Adjudicative agencies are subject to all TB/MBC Directives.
Where TB/MBC Directives do not apply to an agency, the agency must adhere to the principles of those Directives.
All agencies classified under this directive, except advisory agencies, must submit an annual business plan to the responsible minister for approval. All agency business plans are to be submitted for the responsible minister's signature and are only to be considered valid after the minister has approved the plan by affixing a signature. An agency business plan is for a three-year period or longer and is prepared every year.
All agency business plans must report on the following elements:
To support ministers in fulfilling their responsibility for agencies, ministry staff are to exercise due diligence upon receipt of an agency business plan before ministry staff recommend that the minister sign it. Moreover, the agency annual budget is to be submitted to the ministry's CAO within three months from fiscal year-end.
(See Guide To Developing Agency Business Plans for further details.)
All agencies classified under this directive, except advisory agencies, must prepare an annual report for submission to the Minister. The agency must submit its annual report to the minister within 120 days of the agency's fiscal year-end. Agencies that do not have a governing board must submit the annual report to the minister within 90 days.
The Minister is to table the agency's annual report in the Legislative Assembly within 60 days of receiving the annual report. When the Legislative Assembly is not in session, the Minister will file the report with the Clerk's Office within 60 days, at which time the annual report becomes a public document. When the Legislative Assembly is next sitting, the receipt of the annual report will be recorded.
The annual report must contain the following elements:
The following must be submitted to Office of the Provincial Controller for the preparation of Province's Public Accounts, within the timelines established each year:
When an agency has subsidiaries, the annual report must also contain the same information regarding each subsidiary.
(See Guide To Tabling Agency Annual Reports for further details.)
External financial statement audits are to be performed by:
When agencies are subject to an annual financial statement audit, the agency's annual report will include its audited financial statements.
In addition to external financial statement audits, the Ontario Internal Audit Division may undertake an internal audit engagement, as defined by their service delivery framework, if approved by the Ministry's Audit Committee, by the Corporate Audit Committee, or at the Minister's request. Under the Financial Administration Act, the Minister of Finance may also request an audit. Furthermore, the agency may be subject to an audit by the Auditor General of Ontario under the Auditor General Act.
An agency will promptly provide a copy of every report, including its response to the audit report and any recommendations, to the Minister, the Deputy Minister, and the Minister of Finance. The agency will advise the Minister annually, at minimum, on any outstanding recommendations.
The Ontario Internal Audit Division, Ministry of Finance, may also undertake an internal audit engagement at the request of the agency board and with the approval of the Ministry's Audit Committee. Reports and outstanding issues may be shared with the respective ministry's Minister and Deputy Minister upon their request.
The agency's chair, other appointees to the agency, and staff of the agency and ministry are to co-operate in any audit of the agency.
REPORT OF THE SPECIAL ADVISOR ON AGENCIES
APPENDIX C
* SORTED BY AGENCY CLASSIFICATION *
15-Dec-10
Agriculture, Food and Rural Affairs
Agriculture, Food and Rural Affairs Appeal Tribunal
Board of Negotiation (Environmental Protection Act)
Normal Farm Practices Protection Board
Attorney General
Assessment Review Board
Board of Negotiation (Expropriation Act)
Conservation Review Board
Criminal Injuries Compensation Board
Environmental Review Tribunal
Human Rights Tribunal of Ontario
Ontario Municipal Board
Children and Youth Services
Child and Family Services Review Board
Custody Review Board
Community and Social Services
Social Assistance Review Board
Social Benefits Tribunal
Community Safety and Correctional Services
Animal Care Review Board
Fire Safety Commission
Ontario Civilian Police Commission
Ontario Parole Board
Ontario Police Arbitration Commission
Education
Ontario Special Education Tribunal (English)
Ontario Special Education Tribunal (French)
Government Services
Licence Appeal Tribunal
Public Service Grievance Board
Health and Long-Term Care
Chiropody Review Committee
Consent and Capacity Board
Dentistry Review Committee
Health Professions Appeal and Review Board
Health Services Appeal and Review Board
Medical Eligibility Committee (Health Insurance)
Ontario Review Board
Optometry Review Committee
Physician Payment Review Board
Labour
Crown Employees (Grievance Settlement Board)
Ontario Labour Relations Board
Pay Equity Hearings Tribunal
Workplace Safety and Insurance Appeals Tribunal
Municipal Affairs and Housing
Building Code Commission
Landlord and Tenant Board
Training, Colleges and Universities
College Relations Commission
Agriculture, Food and Rural Affairs
Livestock Medicines Advisory Committee
Ontario AgriStability Review Committee
Rural Economic Development (RED) Panel Board of Directors
Attorney General
Investment Advisory Committee of the Public Guardian and
Trustee
Judicial Appointments Advisory Committee
Justices of the Peace Appointments Advisory Committee
Office for Victims of Crime
Citizenship and Immigration
Advisory Council to the Order of Ontario
Ontario Medal for Young Volunteers Advisory Council
Province of Ontario Medal for Fire Fighters Bravery
Advisory Council
Province of Ontario Medal for Good Citizenship
Advisory Council
Province of Ontario Medal for Police Bravery Advisory Council
Community and Social Services
Accessibility Standards Advisory Council
Ontario Youth Council
Community Safety and Correctional Services
Constable Joe MacDonald Public Safety Officers' Survivors Scholarship Fund Advisory Committee
Death Investigation Oversight Council
Fire Marshal's Public Fire Safety Council
Economic Development and Trade
Ontario Investment and Trade Advisory Council
Small Business Agency of Ontario
Education
Advisory Council on Special Education
Curriculum Council
Education Relations Commission
Languages of Instruction Commission of Ontario
Ontario Parent Council
Safe Schools Action Team
Environment
Advisory Council on Drinking Water Quality and Testing
Standards
Lake Simcoe Coordinating Committee
Lake Simcoe Science Committee
Pesticides Advisory Committee
Finance
Commodity Futures Advisory Board
Financial Disclosure Advisory Board
Ontario Economic Forecast Council
Francophone Affairs
Provincial Advisory Committee on Francophone Affairs
Government Services
Deputy Judges Remuneration Commission
Justices of the Peace Remuneration Commission
Provincial Judges Remuneration Commission
Health and Long-Term Care
Citizens' Council
Committee to Evaluate Drugs
French Language Health Services Advisory Council
Healing Arts Radiation Protection Commission
Health Professions Regulatory Advisory Council
Joint Committee on the Schedule of Benefits
Ontario Advisory Committee on HIV/AIDS
Pharmacy Council
Physician Services Payment Committee
Municipal Affairs and Housing
Building Code Energy Advisory Council
Greenbelt Council
Natural Resources
Committee on the Status of Species at Risk in Ontario
Fish and Wildlife Advisory Board (Fish and Wildlife Heritage
Commission)
Kawartha Highlands Signature Site Park Management
Advisory Board
Ontario Geographic Names Board
Ontario Moose-Bear Allocation Advisory Committee
Ontario Parks Board
Rabies Advisory Committee
Species at Risk Program Advisory Committee
Wildlife Rehabilitation Committee
Northern Development, Mines and Forestry
Ring of Fire Advisory Committee
Office of the Premier
Premier's Climate Change Advisory Panel
Research and Innovation
Biopharmaceutical Investment Program Marketing Advisory
Committee
Ontario Network of Excellence Advisory Board
Ontario Research Fund Advisory Board
Tourism and Culture
Minister's Advisory Council for Arts and Culture
Training, Colleges and Universities
Industry Committee - Agricultural Equipment Technician
Industry Committee - Appliance Service Technician
Industry Committee - Arborist
Industry Committee - Auto Body & Collision Damage Repairer
Industry Committee - Automotive Service Technician
Industry Committee - Baker-Patissier
Industry Committee - Cabinetmaker
Industry Committee - Chef/Cook
Industry Committee - Construction Craft Worker
Industry Committee - Early Childhood Educator
Industry Committee - Elevating Device Mechanic
Industry Committee - Facilities Operation
Industry Committee - Hairstylist
Industry Committee - Heavy Duty Equipment Technician
Industry Committee - Horticultural Technician
Industry Committee - Industrial Electrician
Industry Committee - Industrial Mechanic Millwright
Industry Committee - Instrumentation Control Technician
Industry Committee - Motive Power Machinist
Industry Committee - Motorcycle/Marine and Small Engine
Mechanic
Industry Committee - Network Cabling Specialist
Industry Committee - Parts Technician
Industry Committee - Powered Lift Truck Technician
Industry Committee - Precision Machining and Tooling
Industry Committee - Surface Blaster
Industry Committee - Tractor-Trailer Commercial Driver
Industry Committee - Truck and Coach Technician
Industry Committee - Utility Arborist
Industry Committee - Welder/Fabricator
Post Secondary Education Quality Assessment Board
Provincial Advisory Committee - Construction and
Maintenance Electrician
Provincial Advisory Committee - Construction Boilermaker
Provincial Advisory Committee - Construction Millwright
Provincial Advisory Committee - Drywall Finisher and Plasterer
Provincial Advisory Committee - Drywall, Acoustic and Lathing
Applicator
Provincial Advisory Committee - Floor Covering Installer
Provincial Advisory Committee - General Carpenter
Provincial Advisory Committee - Glazier and Metal Mechanic
Provincial Advisory Committee - Hoisting Engineer
Provincial Advisory Committee - Ironworker
Provincial Advisory Committee - Masonry and Allied Crafts
Provincial Advisory Committee - Painter and Decorator
Provincial Advisory Committee - Plumber and Steamfitter
Provincial Advisory Committee - Powerline Technician
Provincial Advisory Committee - Refrigeration and Air
Conditioning Mechanic
Provincial Advisory Committee - Reinforcing Rodworker
Provincial Advisory Committee - Roofer
Provincial Advisory Committee - Sheet Metal Worker
Provincial Advisory Committee - Sprinkler and Fire Protection Installer
Provincial Advisory Committee - Terrazzo, Tile and Marble
Setter
Selection Board (Ontario Graduate Scholarship Program)
Training Completion Assurance Fund Advisory Board
Training, Colleges and Universities
Brock University Foundation
Foundation at Queen's University at Kingston
McMaster University Foundation
Agriculture, Food and Rural Affairs
AgriCorp
Ontario Food Terminal Board
Attorney General
Economic Development and Trade
Ontario Immigrant Investor Corporation
Ontario, Eastern Ontario and Northern Ontario Development
Corporation
Ortech Corporation
Education
L'Office des telecommunications educatives de langue
francaise de l'Ontario
Ontario Educational Communications Authority (TV Ontario)
Environment
Ontario Clean Water Agency
Finance
Deposit Insurance Corporation of Ontario
Liquor Control Board of Ontario
Ontario Electricity Financial Corporation
Ontario Financing Authority
Ontario Lottery and Gaming Corporation
Stadium Corporation of Ontario Ltd.
Infrastructure
Ontario Infrastructure Projects Corporation
Ontario Realty Corporation
Municipal Affairs and Housing
North Pickering Development Corporation
Ontario Mortgage and Housing Corporation
Ontario Mortgage Corporation
Toronto Islands Residential Community Trust Corporation
Natural Resources
Algonquin Forestry Authority
Northern Development, Mines and Forestry
Northern Ontario Grow Bonds Corporation
Ontario Northland Transportation Commission
Owen Sound Transportation Company
Research and Innovation
Ontario Capital Growth Corporation
Tourism and Culture
Centennial Centre of Science and Technology (Ontario
Science Centre)
McMichael Canadian Art Collection
Metropolitan Toronto Convention Centre Corporation
Niagara Parks Commission
Ontario Heritage Trust
Ontario Place Corporation
Ottawa Convention Centre Corporation
Royal Ontario Museum
Science North
St. Lawrence Parks Commission
Transportation
Metrolinx
Toronto Area Transit Operating Authority
Agriculture, Food and Rural Affairs
Agricultural Research Institute of Ontario
Attorney General
Human Rights Legal Support Centre
Legal Aid Ontario
Community and Social Services
Soldiers' Aid Commission
Education
Education Quality and Accountability Office
Provincial Schools Authority
Environment
Walkerton Clean Water Centre
Health and Long-Term Care
Cancer Care Ontario
ECHO: Improving Women's Health in Ontario
eHealth Ontario
HealthForceOntario Marketing and Recruitment Agency
Local Health Integration Network - Central
Local Health Integration Network - Central East
Local Health Integration Network - Central West
Local Health Integration Network - Champlain
Local Health Integration Network - Erie St. Clair
Local Health Integration Network - Hamilton Niagara
Haldimand Brant
Local Health Integration Network - Mississauga Halton
Local Health Integration Network - North East
Local Health Integration Network - North Simcoe Muskoka
Local Health Integration Network - North West Ontario
Local Health Integration Network - South East
Local Health Integration Network - South West
Local Health Integration Network - Toronto Central
Local Health Integration Network - Waterloo Wellington
Ontario Agency for Health Protection and Promotion
Ontario Health Quality Council
Ontario Mental Health Foundation
Trillium Gift of Life Network
Labour
Office of the Employer Adviser
Office of the Worker Adviser
Northern Development, Mines and Forestry
Northern Ontario Heritage Fund Corporation
Tourism and Culture
Ontario Media Development Corporation
Ontario Tourism Marketing Partnership Corporation
Ontario Trillium Foundation
Province of Ontario Council for the Arts (Ontario Arts Council)
Training, Colleges and Universities
College of Trades Appointments Council
Higher Education Quality Council of Ontario
Agriculture, Food and Rural Affairs
Ontario Farm Products Marketing Commission
Attorney General
Office of the Independent Police Review Director
Ontario Human Rights Commission
Public Accountants Council
Citizenship and Immigration
Office of the Fairness Commissioner
Consumer Services
Ontario Film Review Board
Finance
Financial Services Tribunal
Francophone Affairs
Office of the French Language Services Commissioner
Government Services
Advertising Review Board
Office of the Conflict of Interest Commissioner
Public Service Commission
Health and Long-Term Care
Board of Directors for Drugless Therapy
Labour
Pay Equity Office
Municipal Affairs and Housing
Building Materials Evaluation Commission
Natural Resources
Niagara Escarpment Commission
Northern Development, Mines and Forestry
Crown Timber Board of Examiners
Transportation
Ontario Highway Transport Board
Attorney General
Alcohol and Gaming Commission of Ontario
Energy
Ontario Energy Board
Finance
Financial Services Commission of Ontario
Ontario Racing Commission
Ontario Securities Commission
Agriculture, Food and Rural Affairs
Grain Financial Protection Board
Livestock Financial Protection Board
Government Services
Ontario Public Service Pension Board (Ontario Pension Board)
Provincial Judges Pension Board
Labour
Workplace Safety and Insurance Board
REPORT OF THE SPECIAL ADVISOR ON AGENCIES: APPENDIX D
Consolidation Period: From April 7, 2010 to the e-Laws currency date.
No Amendments.
PURPOSE AND INTERPRETATION
Note: Section 1 comes into force on a day to be named by proclamation of the Lieutenant Governor. See: 2009, c. 33, Sched. 5, s. 24.
Purpose
1. The purpose of this Act is to ensure that adjudicative tribunals are accountable, transparent and efficient in their operations while remaining independent in their decision-making. 2009, c. 33, Sched. 5, s. 1.
Definitions
2. In this Act,
"adjudicative tribunal" means an agency, board, commission, corporation or other entity that is prescribed; ("tribunal décisionnel")
"governance accountability documents" means the memorandum of understanding, business plan and annual report required by sections 11, 12 and 13, respectively; ("documents de responsabilisation en matière de gouvernance")
"prescribed" means prescribed by regulations made under this Act; ("prescrit")
"public accountability documents" means the mandate and mission statement, consultation policy, service standard policy, ethics plan and member accountability framework required by sections 3, 4, 5, 6 and 7, respectively; ("documents de responsabilisation à l'égard du public")
"responsible minister", in relation to an adjudicative tribunal, means the minister of the Crown who is responsible to the Assembly for the tribunal. ("ministre responsable") 2009, c. 33, Sched. 5, s. 2.
Note: Sections 3-14 come into force on a day to be named by proclamation of the Lieutenant Governor. See: 2009, c. 33, Sched. 5, s. 24.
PUBLIC ACCOUNTABILITY DOCUMENTS
Mandate and mission statement
3. (1) Every adjudicative tribunal shall develop a mandate and mission statement. 2009, c. 33, Sched. 5, s. 3
(1).
Contents
(2) The mandate and mission statement must contain,
(a) a statement of the tribunal's legislative mandate, with reference to the Act that establishes its mandate and to any Act or Acts that add to its mandate;
(b) the tribunal's mission statement; and
(c) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 3 (2).
Approval
(3) The mandate and mission statement must be approved by the tribunal's responsible minister. 2009, c. 33, Sched. 5, s. 3 (3).
Consultation policy
4. (1) Every adjudicative tribunal shall develop a consultation policy. 2009, c. 33, Sched. 5, s. 4
(1).
Contents
(2) The consultation policy must describe whether and how the tribunal will consult with the public when it is considering
changes to its rules or policies, including consultation with any persons, entities or groups of persons or entities whose interests, in the opinion of the tribunal's chair, would be affected by those changes. 2009, c. 33, Sched. 5, s. 4 (2).
Same
(3) The consultation policy must contain any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 4 (3).
Approval
(4) The consultation policy must be approved by the tribunal's responsible minister. 2009, c. 33, Sched. 5, s. 4 (4).
Service standard policy
5. (1) Every adjudicative tribunal shall develop a service standard policy. 2009, c. 33, Sched. 5, s. 5
(1).
Contents
(2) The service standard policy must contain,
(a) a statement of the standards of service that the tribunal intends to provide;
(b) a process for making, reviewing and responding to complaints about the service provided by the tribunal; and
(c) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 5 (2).
Approval
(3) The service standard policy must be approved by the tribunal's responsible minister. 2009, c. 33, Sched. 5, s. 5 (3).
Relationship to other remedies
(4) Nothing in the service standard policy shall be interpreted as affecting,
(a) a process or remedy available under the Ombudsman Act;
(b) a right of appeal from decisions of the tribunal available under any Act; or
(c) a right to bring an application for judicial review. 2009, c. 33, Sched. 5, s. 5 (4).
Ethics plan
6. (1) Every adjudicative tribunal shall develop an ethics plan. 2009, c. 33, Sched. 5, s. 6 (1).
Contents
(2) The contents of the ethics plan shall be prescribed and must also include any matter specified in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 6 (2).
Approval
(3) The ethics plan must be approved by the Conflict of Interest Commissioner appointed under the Public Service of Ontario Act, 2006 . 2009, c. 33, Sched. 5, s. 6 (3).
Conflict with Public Service of Ontario Act, 2006
(4) In the event of any conflict between an adjudicative tribunal's ethics plan and the conflict of interest rules made under the Public Service of Ontario Act, 2006 that apply to the tribunal, the conflict of interest rules prevail. 2009, c. 33, Sched. 5, s. 6 (4).
Member accountability framework
7. (1) Every adjudicative tribunal shall develop a member accountability framework. 2009, c. 33, Sched. 5, s. 7
(1).
Contents
(2) The member accountability framework must contain,
(a) a description of the functions of the members, the chair and the vice-chairs, if any, of the tribunal;
(b) a description of the skills, knowledge, experience, other attributes and specific qualifications required of a person to be appointed as a member of the tribunal;
(c) a code of conduct for the members of the tribunal; and
(d) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 7 (2).
Approval
(3) The member accountability framework must be approved by the tribunal's responsible minister. 2009, c. 33, Sched. 5, s. 7 (3).
PUBLICATION, AMENDMENT AND REVIEW OF PUBLIC ACCOUNTABILITY DOCUMENTS
Publication of public accountability documents
8. Every adjudicative tribunal shall make its public accountability documents, approved as required by section 3, 4, 5, 6 or
7, as the case may be, available to the public. 2009, c. 33, Sched. 5, s. 8.
Amendments to public accountability documents
9. An adjudicative tribunal may amend its public accountability documents, and the person required to approve the original document is also required to approve any amendment to the document. 2009, c. 33, Sched. 5, s. 9.
Review of public accountability documents
10. Every adjudicative tribunal shall review its public accountability documents to determine whether they require amendment every three years after their initial publication. 2009, c. 33, Sched. 5, s. 10.
GOVERNANCE ACCOUNTABILITY DOCUMENTS
Memorandum of understanding
11. (1) Every adjudicative tribunal shall enter into a memorandum of understanding with its responsible minister. 2009,
c. 33, Sched. 5, s. 11 (1).
Contents
(2) The memorandum of understanding must address,
(a) the financial, staffing and administrative arrangements for the tribunal;
(b) the accountability relationships of the tribunal, including its duty to account to its responsible minister;
(c) the recruitment, orientation and training of the tribunal's members;
(d) the committee structure of the tribunal, if any;
(e) the tribunal's planning and reporting requirements; and
(f) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 11 (2).
Expiry
(3) The memorandum of understanding expires five years after the day it is entered into, and may be renewed before that day for another five years. 2009, c. 33, Sched. 5, s. 11 (3).
Review
(4) The tribunal and its responsible minister shall review the memorandum of understanding after there is a change in the responsible minister or the chair of the tribunal, and, in any event, at least once before it expires. 2009, c. 33, Sched. 5, s. 11 (4).
Continuation of expired memorandum
(5) A memorandum of understanding that has expired continues in effect, despite its expiry, until it is renewed or replaced. 2009, c. 33, Sched. 5, s. 11 (5).
Publication
(6) The tribunal's responsible minister shall make the memorandum of understanding available to the public. 2009, c. 33, Sched. 5, s. 11 (6).
Transition
(7) An adjudicative tribunal and its responsible minister may agree that a memorandum of understanding entered into by them before the day that subsection (1) becomes applicable to the tribunal and that is still in effect on that day is a memorandum of understanding entered into by them on the day subsection (1) becomes applicable to the tribunal for the purposes of this section. 2009, c. 33, Sched. 5, s. 11 (7).
Business plan
12. (1) Every adjudicative tribunal shall develop a business plan for a prescribed period of time. 2009, c. 33, Sched. 5,
s. 12 (1).
Contents
(2) The contents of the business plan shall be prescribed and must also include any matter specified in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 12 (2).
Approval
(3) The business plan must be approved by the tribunal's responsible minister. 2009, c. 33, Sched. 5, s. 12 (3).
Publication
(4) The tribunal shall make the business plan available to the public. 2009, c. 33, Sched. 5, s. 12 (4).
Annual report
13. (1) Every adjudicative tribunal shall prepare and give its responsible minister an annual report within 90 days after the
end of its fiscal year. 2009, c. 33, Sched. 5, s. 13 (1).
Contents
(2) The annual report must contain,
(a) a report on the tribunal's activities, including recruitment activities, during the preceding fiscal year;
(b) a financial statement for the tribunal for the preceding fiscal year; and
(c) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 13 (2).
Tabling in the Assembly
(3) The responsible minister shall submit the report to the Lieutenant Governor in Council and, within 60 days after the day the responsible minister receives the report, shall table the report in the Assembly. 2009, c. 33, Sched. 5, s. 13 (3).
Tribunal-specific Act prevails
(4) In the event of any conflict between this section and a provision of another Act respecting the tabling of an annual report by an adjudicative tribunal, the provision of the other Act prevails in the case of that tribunal. 2009, c. 33, Sched. 5, s. 13 (4).
APPOINTMENT TO ADJUDICATIVE TRIBUNALS
Adjudicative tribunal members to be selected by competitive, merit-based process
14. (1) The selection process for the appointment of members to an adjudicative tribunal shall be a competitive, merit-
based process and the criteria to be applied in assessing candidates shall include the following:
1. Experience, knowledge or training in the subject matter and legal issues dealt with by the tribunal. 2. Aptitude for impartial adjudication.
3. Aptitude for applying alternative adjudicative practices and procedures that may be set out in the tribunal's rules. 2009, c. 33, Sched. 5, s. 14 (1).
Tribunal-specific qualifications
(2) If a member of an adjudicative tribunal is required by or under any other Act to possess specific qualifications, a person shall not be appointed to the tribunal unless he or she possesses those qualifications. 2009, c. 33, Sched. 5, s. 14 (2).
Publication
(3) The responsible minister of an adjudicative tribunal shall make public the recruitment process to select one or more persons to be appointed to the tribunal and in doing so shall specify,
(a) the steps intended to be taken in the recruitment process; and
(b) the skills, knowledge, experience, other attributes and specific qualifications required of a person to be appointed. 2009, c. 33, Sched. 5, s. 14 (3).
Chair to recommend appointments, reappointments
(4) No person shall be appointed or reappointed to an adjudicative tribunal unless the chair of the tribunal, after being
consulted as to his or her assessment of the person's qualifications under subsections (1) and (2) and, in the case of a reappointment, of the member's performance of his or her duties on the tribunal, recommends that the person be appointed or reappointed. 2009, c. 33, Sched. 5, s. 14 (4).
Conflict with other Acts, regulations
(5) In the event of any conflict between this section and a provision of another Act or of a regulation made under another Act respecting the appointment of members of an adjudicative tribunal, the provision of the other Act or regulation prevails. 2009, c. 33, Sched. 5, s. 14 (5).
TRIBUNAL CLUSTERING
Designation of clusters
15. The Lieutenant Governor in Council may by regulation designate two or more adjudicative tribunals as a cluster if, in
the opinion of the Lieutenant Governor in Council, the matters that the tribunals deal with are such that they can operate more effectively and efficiently as part of a cluster than alone. 2009, c. 33, Sched. 5, s. 15.
Governance structure of clusters
Executive chair
16. (1) The Lieutenant Governor in Council may appoint an executive chair to be responsible for all of the adjudicative
tribunals included in a cluster. 2009, c. 33, Sched. 5, s. 16 (1).
Associate chairs
(2) The Lieutenant Governor in Council may appoint an associate chair for each adjudicative tribunal that is included in a cluster. 2009, c. 33, Sched. 5, s. 16 (2).
Alternate executive chairs
(3) The Lieutenant Governor in Council may appoint one or more of the associate chairs as alternate executive chairs of the cluster, and an alternate executive chair shall act in the place of the executive chair if the executive chair is unable to act or if the position of executive chair is vacant. 2009, c. 33, Sched. 5, s. 16 (3).
Vice-chairs
(4) The Lieutenant Governor in Council may appoint one or more vice-chairs for each adjudicative tribunal that is included in a cluster, and a vice-chair shall act in the place of the tribunal's associate chair if the associate chair is unable to act or if the position of associate chair is vacant. 2009, c. 33, Sched. 5, s. 16 (4).
Chairs must be members of tribunals
(5) The executive chair and each alternate executive chair must also be members of each of the adjudicative tribunals in the cluster and the associate chair and each vice-chair must also be members of the tribunal to which they are appointed as associate chair and vice-chair. 2009, c. 33, Sched. 5, s. 16 (5).
Powers, duties, etc., of executive chair
17. (1) The executive chair shall have the powers, duties and functions assigned to the chair of each adjudicative tribunal
that is included in the cluster by this or any other Act or by any regulation, order-in-council or ministerial or Management Board of Cabinet directive. 2009, c. 33, Sched. 5, s. 17 (1).
Delegation
(2) The executive chair may delegate to an associate chair or vice-chair of an adjudicative tribunal that is included in the cluster any power, duty or function, except a power, duty or function he or she may have as an ethics executive under the Public Service of Ontario Act, 2006. 2009, c. 33, Sched. 5, s. 17 (2).
Protection from liability
(3) The executive chair, alternate executive chair and associate chair of an adjudicative tribunal that is included in a cluster shall be entitled to the same protection from liability as the chair of the tribunal. 2009, c. 33, Sched. 5, s. 17 (3).
Same
(4) The vice-chairs and members of an adjudicative tribunal that is included in a cluster shall be entitled to the same protection from liability as the members of the tribunal. 2009, c. 33, Sched. 5, s. 17 (4).
Crown liability
(5) Any provision in another Act that addresses the Crown's liability for the actions or omissions of an adjudicative tribunal that is included in a cluster or of a chair, vice-chair or member of an adjudicative tribunal that is included in a cluster applies with necessary modifications to the adjudicative tribunal. 2009, c. 33, Sched. 5, s. 17 (5).
References to chair in other Acts, etc.
(6) Except as provided in a regulation made under this Act, any reference in this or any other Act or a regulation to the chair of an adjudicative tribunal that is included in a cluster shall be read as a reference to the tribunal's executive chair. 2009, c. 33, Sched. 5, s. 17 (6).
Note: Section 18 comes into force on a day to be named by proclamation of the Lieutenant Governor. See: 2009, c. 33, Sched. 5, s. 24.
Joint accountability documents
18. (1) All the adjudicative tribunals included in a cluster shall jointly develop, prepare or enter into, as the case may be,
the public accountability documents and governance accountability documents required by this Act. 2009, c. 33, Sched. 5, s. 18 (1).
Same
(2) Section 3, 4, 5, 6 or 7, as the case may be, and sections 8, 9 and 10 apply with necessary modifications to any public accountability document jointly developed by all the adjudicative tribunals in a cluster. 2009, c. 33, Sched. 5, s. 18 (2).
Same
(3) Section 11, 12 or 13, as the case may be, applies with necessary modifications to any governance accountability document jointly developed, prepared or entered into, as the case may be, by all the adjudicative tribunals in a cluster. 2009, c. 33, Sched. 5, s. 18 (3).
This Act prevails re governance of clusters
19. In the event of any conflict between section 16 or 17 and a provision of another Act or a regulation respecting the governance of an adjudicative tribunal that is included in a cluster, section 16 or 17 prevails. 2009, c. 33, Sched. 5, s. 19.
GENERAL MATTERS
Note: Sections 20 and 21 come into force on a day to be named by proclamation of the Lieutenant Governor. See: 2009, c. 33, Sched. 5, s. 24.
Chair is responsible for tribunals
20. (1) The chair of an adjudicative tribunal is responsible for ensuring that the tribunal performs the duties and functions
required of it under this or any other Act and that it is in compliance with any other Act or any regulation applicable to it. 2009, c. 33, Sched. 5, s. 20 (1).
Effect of failure to comply
(2) Any failure of an adjudicative tribunal or its chair to comply with this Act does not affect the validity of any action taken or decision made by the tribunal or the chair. 2009, c. 33, Sched. 5, s. 20 (2).
Review of tribunals
21. (1) An adjudicative tribunal's responsible minister shall direct a public servant employed under Part III of the Public
Service of Ontario Act, 2006 or any other person to conduct a review of the adjudicative tribunal at least once every six years. 2009, c. 33, Sched. 5, s. 21 (1).
Matters for review
(2) The review required by subsection (1) must address,
(a) the tribunal's mandate and whether it continues to be relevant;
(b) the functions performed by the tribunal, and whether they are best performed by the tribunal or whether they would be better performed by another entity;
(c) the tribunal's governance structure and management systems, and whether they continue to be appropriate to its mandate and functions;
(d) the tribunal's financial and human resources and its financial and information systems;
(e) the tribunal's business planning, performance measurement and reporting practices;
(f) whether the tribunal has effective processes in place to ensure its compliance with any applicable Act, regulation or directive of the Management Board of Cabinet;
(g) whether the tribunal is effective in achieving its mandate and serving the public;
(h) whether changes should be made to the tribunal or whether the tribunal should be discontinued; and
(i) any other matter specified in the regulations or in a directive of the Management Board of Cabinet. 2009, c. 33, Sched. 5, s. 21 (2).
Additional reviews
(3) An adjudicative tribunal's responsible minister may at any time direct a public servant employed under Part III of the
Public Service of Ontario Act, 2006 or any other person to conduct a review of the adjudicative tribunal in respect of any of the matters listed in subsection (2). 2009, c. 33, Sched. 5, s. 21 (3).
Protection of personal information
(4) Nothing in this section authorizes a person conducting a review under subsection (1) or subsection (3) to collect, or an adjudicative tribunal to disclose to such person, any information that is personal information within the meaning of theFreedom of Information and Protection of Privacy Act or personal health information within the meaning of the Personal Health Information Protection Act, 2004. 2009, c. 33, Sched. 5, s. 21 (4).
Application of Public Service of Ontario Act, 2006, Management Board of Cabinet Act
22. Nothing in this Act affects any obligation or requirement imposed by or under the Public Service of Ontario Act, 2006 or the Management Board of Cabinet Act on a person who is appointed as a chair, vice-chair or member of an adjudicative tribunal. 2009, c. 33, Sched. 5, s. 22.
REGULATIONS
Regulations
23. The Lieutenant Governor in Council may make regulations,
(a) prescribing agencies, boards, commissions, corporations or other entities for the purpose of the definition of "adjudicative tribunal" in section 2;
(b) prescribing the contents of the ethics plan required by section 6;
(c) prescribing a period of time for the purpose of subsection 12 (1) and the contents of the business plan required by section 12;
(d) governing the publication of the recruitment process required by subsection 14 (3);
(e) respecting the waiver of any requirement set out in section 14, including waiving any such requirement;
(f) prescribing references in this or any other Act or in a regulation to the chair of an adjudicative tribunal that are to be read other than as described in subsection 17 (6) and prescribing how such references shall be read in relation to the adjudicative tribunal that is included in a cluster;
(g) prescribing other matters to be addressed in a review of an adjudicative tribunal required by section 21;
(h) prescribing other matters to be addressed or included in any public accountability document or governance accountability document;
(i) prescribing the date by or time within which an adjudicative tribunal must comply with any provision or requirement of this Act or of a regulation made under this Act respecting a public accountability document or governance accountability document;
(j) prescribing the form and format of any public accountability document or governance accountability document;
(k) governing the publication of the public accountability documents or governance accountability documents or of the
review required by section 21. 2009, c. 33, Sched. 5, s. 23.
24. OMITTED (PROVIDES FOR COMING INTO FORCE OF PROVISIONS OF THIS ACT). 2009, c. 33, Sched. 5, s. 24. 25 . OMITTED (ENACTS SHORT TITLE OF THIS ACT). 2009, c. 33, Sched. 5, s. 25.