Canada: Ontario Proposes Sweeping Changes For Broader Public Sector Accountability

On March 24, 2014, the Ontario Legislature introduced Bill 179, the Public Sector and MPP Accountability and Transparency Act, 2014 for first reading by lawmakers. The stated goals of the legislation are to strengthen political accountability, enhance oversight, and increase transparency in the government and the broader public sector ("BPS").

New Broader Public Sector Executive Compensation Restraint Legislation

Schedule 1 of the proposed Act would create new legislation entitled the Broader Public Sector Executive Compensation Act, 2014 ("Executive Compensation Act"). The Executive Compensation Act would govern the compensation for designated executives with designated employers in the BPS. Although the Executive Compensation Act is in many ways similar to previous BPS wage restraint legislation, a number of proposed measures warrant closer examination.

In addition to the designated employers covered by Part II.1 of the Broader Public Sector Accountability Act, 2010 ("BPSAA"), the Executive Compensation Act will also apply to community care access corporations and their respective designated executives.

Under the Executive Compensation Act, the government would be empowered to establish "compensation frameworks" governing compensation for designated executives in the BPS. As with the BPSAA, designated executives are senior executives or office holders who are entitled to or could receive compensation in excess of $100,000 in a calendar year (this is also pro-rated for part-time designated executives). Other employees could be defined by regulation as being designated employees.

The compensation frameworks may include "hard caps" on a variety of executive compensation mechanisms including, but not limited to salaries, benefits, perquisites, bonuses, and severance payments. The Executive Compensation Act provides that it will prevail over any term of an affected executive compensation plan that conflicts with its provisions. In the event of such a conflict, the terms of the compensation plan will be rendered inoperative to the extent of the conflict. Once a compensation framework is in effect for a designated employer and/or designated employees, the BPSAA will no longer apply in that regard.

If a designated executive's compensation just prior to the effective date of a compensation framework is greater than provided for in the framework, the designated executive's compensation can remain in effect. However, note that there is an anti-avoidance measure in the legislation which prohibits an employer from providing new or additional compensation to offset any freeze on compensation.

The Executive Compensation Act also contains enforcement measures to ensure that compensation limits are respected. Designated employers could be required to comply with directives to provide to the Management Board of Cabinet ("MBC") a broad range of compensation information for designated executives. Any amounts paid to an executive which exceed the limits set by a compensation framework under the Executive Compensation Act are deemed to be overpayments. If an overpayment is made, the employer is responsible for remitting an amount equal to the overpayment to the Crown. The executive who received the overpayment then becomes indebted to the employer for that amount.

Interestingly, the Executive Compensation Act states that employers must endeavour to minimize any impact that the compensation overpayment rules may have on the employer's provision of services to the public. It is yet unclear whether this provision will, in practice, allow employers to avoid their obligation to remit overpayments by citing public policy concerns.

As with prior wage restraint legislation, this legislation prevails over any compensation plan and no cause of action, including for constructive dismissal, can arise from a designated employer complying with the Executive Compensation Act.

Amendments to the Broader Public Sector Accountability Act

Schedule 2 of the proposed Act would amend the BPSAA by the addition of Part V.1. entitled "Business Plans." This Part authorizes the MBC to issue directives requiring designated broader public sector organizations to prepare and publish business plans and any other business or financial documents specified by the directives.

Under the BPSAA, designated broader public sector organizations include: hospitals, school boards, community care access corporations and publicly funded organizations that received public funds of 10 million dollars or more from the Government of Ontario in the previous fiscal year.

This Part also authorizes the MBC to make guidelines (not to be confused with the aforementioned directives) with respect to how publicly funded organizations prepare and publish business plans and any other business or financial documents specified by the guidelines.

The BPSAA definition of a publicly funded organization includes every authority, board, commission, committee, corporation, council, foundation or organization that received public funds in the previous fiscal year from the Government of Ontario as a publicly funded organization. Public hospitals, school boards and long-term care homes are specifically excluded from the definition and accordingly are not subject to the guidelines.

In addition, amendments to sections 14 and 15 under Part VI of the BPSAA, entitled "Compliance Reports" require Local Health Integration Networks ("LHINs") and hospitals respectively to prepare attestations that confirm compliance with any directives issued by the MBC regarding the preparation and publication of business plans and other business or financial documents.

Amendments to the Excellent Care for All Act

Schedule 4 of the proposed Act would make amendments to the Excellent Care for All Act ("ECFAA") that range from housekeeping items to the creation of a patient ombudsman position. Specifically, the addition of section 13.1, entitled "Patient Ombudsman" to ECFAA creates the patient ombudsman position. The individual in this role will be appointed by the Lieutenant Governor in Council and employed by the Ontario Health Quality Council (the "Council"). The Ombudsman has authority to delegate any or all of his or her powers to one or more Council employees.

A patient or former patient of a "health sector organization," and any other person prescribed in the regulations may make a written complaint to the patient ombudsman about the actions or inactions of a health sector organization that relate to his or her care and health care experience.

The proposed amendments also add a number of defined terms to ECFAA including:

"Health sector organization" which means:

  • A hospital with the meaning of the Public Hospitals Act,
  • A community care access corporation within the meaning of the Community Care Access Corporations Act,
  • A licensee within the meaning of the Long-Term Care Homes Act, and
  • Any other organization that is provided for in the regulations and that receives public funding.

"Patient or former patient" includes a patient or former patient of a hospital, a resident or former resident of a long-term care home, and a client or former client of a community care access corporation, in addition to a person with the authority to consent to the treatment or the other matter on behalf of the patient or former patient where the individual is or was incapable with respect to the treatment or other matter at issue.

The functions of the patient ombudsman include:

  • Receiving and responding to complaints from patients and former patients of a health sector organization, and any other prescribed persons,
  • Facilitating the resolution of complaints,
  • Investigating complaints,
  • Investigating health sector organizations,
  • Making recommendations to health sector organizations following the conclusion of investigations, and
  • Reporting activities and recommendations to the Minister of Health and Long-Term Care, LHINs and the public.

The patient ombudsman is required to work with the patient or former patient, the health sector organization and where appropriate the LHIN to attempt to facilitate a resolution of a complaint. The patient ombudsman will not get involved if he or she is of the opinion that the patient or former patient has not first attempted to resolve the complaint directly with the health sector organization.

The broad authority granted to the patient ombudsman includes:

  • Investigating a complaint made by a patient or former patient,
  • Commencing an investigation on his or her own initiative (without a complaint) into the actions or inactions of a health sector organization relating to patient care or health care experience,
  • Requiring any officer, employee, director, shareholder or member of any health sector organization, or any other person who provides services through or on behalf of a health sector organization to furnish or produce documents, things, or information that in his or her opinion relate to a matter being investigated,
  • Summoning any of the individuals mentioned above and/ or any patient or former patient and examining them under oath, and
  • Entering and inspecting the premises of a health sector organization with consent and/or pursuant to a warrant.

The proposed amendments explicitly state that the Freedom of Information and Protection of Privacy Act and the Personal Health Information Protection Act do not preclude the provision of personal information or personal health information to the patient ombudsman when he or she requires the information for the purpose of investigating a complaint. Additional proposed amendments include guidelines regarding the collection, use and disclosure of personal health information for purposes related to the functions of the patient ombudsman.

Corresponding proposed amendments expand the functions of the Council to support the patient ombudsmen in carrying out his or her functions. These include:

  • Monitoring and public reporting of the performance of health sector organizations with respect to patient relations, and
  • Promoting enhanced patient relations in health sector organizations through the development of performance indicators, benchmarks, quality improvement supports and resources.

Amendments to Freedom of Information and Protection of Privacy Act

Schedule 5 of the proposed Act would amend the Freedom of Information and Protection of Privacy Act ("FIPPA") by the addition of section 10.1. This section creates an additional duty for the head of an institution to ensure measures are in place to preserve records in the custody or under the control of the institution in accordance with applicable record keeping or retention requirements, laws, rules or policies.

The Act also proposes the following amendments to Section 61 of FIPPA regarding offences:

  • Adding a new offence for the wilful alteration, concealment or destruction of a record with the intent of denying a right of access to a record or information,
  • Providing an extended limitation period (of two years after the day evidence is discovered) for prosecuting the new offence, and
  • Giving the court authority when prosecuting offences under FIPPA to take a number of precautions (i.e. conduct hearings in private or seal court files) to avoid the disclosure of specified information.

This Bill contains many provisions that will, if passed, have significant implications on the health industry. We would be pleased to discuss the current state of Bill 179 with you as well as implications for your organization.

Miller Thomson will continue to monitor future developments of the Bill closely and will keep you apprised of new developments.


[1] Designated employers also include: public hospitals, school boards, universities and colleges, Hydro One Inc. and its subsidiaries, Independent Electricity System Operator, Ontario Power Authority, Ontario Power Generation Inc. and its subsidiaries, and others that may be prescribed by regulation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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André R. Nowakowski
Kathryn M. Frelick
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