Risk Informed Compliance Framework

Introduction

This document outlines the specific components of the Office of the Fairness Commissioner’s Risk-informed Compliance Framework (the framework) and the procedures through which this framework will be implemented.

The objectives of this framework are to:

Enable regulators to more effectively comply with their legal obligations, and to adopt associated best practices, in order to achieve better registration outcomes for all applicants.
Promote the identification of targeted risk factors to enable necessary mitigation and remediation efforts.
Reduce unnecessary burdens on regulators and Office of the Fairness Commissioner (OFC) staff, recognizing that all public sector organizations operate with constrained resources.

The Context for Self-regulation

In Ontario, individuals must obtain a license or certification from an entity that oversees the practice of a regulated profession or compulsory trade in order to practice in the field and/or use a title. These entities are either described as regulated professions, health colleges or the Ontario College of Trades (hereinafter referred to as “regulators”).

Regulators exist to protect the public interest by licensing only those professionals that are qualified and by holding their members accountable for meeting practice standards. These organizations are different from professional associations that exist to provide services to their members and to advocate for the interests of their professions and members.

To achieve this public protection mandate, various provincial statutes grant authority to these regulators to:

Set standards for individuals who enter the profession or compulsory trade
Licence these individuals
Oversee how licenced members adhere to standards of practice.

This scheme is referred to as self-regulation.

The Applicable Legislative Framework

In 2006, the Ontario legislature introduced the then Fair Access to Regulated Professions Act, 2006 (FARPA). This legislation was designed to help ensure that the registration practices of regulated professions were transparent, objective impartial and fair. The legislation also established the OFC and gave it authority to oversee the registration practices of these professions.

FARPA received Royal Assent in December 2006 and it amended the Regulated Health Professions Act (RHPA) by incorporating similar, though not identical, provisions into the Health Professions Procedural Code (Schedule 2). In 2013, FARPA was amended to provide the OFC with oversight of the compulsory trades that fell under the authority of the Ontario College of Trades. The legislation is now referred to as the Fair Access to Regulated Professions and Compulsory Trades Act, 2006 (FARPACTA). Schedule 2 to the RHPA and FARPACTA are collectively known as fair access legislation.

The regulators that are subject to fair access legislation are required to comply with a number of statutory obligations. These include:

Meeting the general duty to develop registration practices that are transparent, objective, impartial and fair. [section 6 of FARPACTA and section 22.2 of Schedule 2 to the RHPA].
Meeting the specific duties outlined in the statutes relating to the provision of information, the need to make timely decisions, along with responses and reasons, the provision of an internal appeal or review process, the basis for assessing applicant qualifications, staff training and the right of an applicant to obtain access to relevant records. [sections 7-12 of FARPACTA and sections 22.3-22.4 of Schedule 2 to the RHPA]
Providing reports to the OFC. [sections 19-25 of FARPACTA and sections 22.6-22.11 of Schedule 2 to the RHPA ]

The OFC’s Modern Regulator Principles

Over the past decade, the public sector has moved towards modernizing its regulatory systems. This modernization trend is driven by research that traditional enforcement tools may not always be effective, efficient or agile enough to achieve public interest outcomes. Thus, it is important that oversight agencies, like the OFC, can rely on regulatory approaches that are proactive and innovative, and that engage a variety of compliance and educational tools.

Based on its review of approaches to regulatory compliance across jurisdictions, and building upon extensive consultation with stakeholders, the OFC has adopted the following six modern regulator principles to inform its Risk-informed Compliance Framework and other elements of its mandate. These principles are set out below:

1. Our approach to regulatory compliance will be based on transparency, professionalism and collaboration.

The Office of the Fairness Commissioner will:

focus on achieving better outcomes through simpler and more straightforward compliance expectations.
consult and collaborate with professions and trades when new approaches or changes to regulatory frameworks are proposed.
be accountable for its decisions and open to public scrutiny.

2. Our compliance approach will be evidence-based and risk-informed.

We will consider both the historical performance of individual regulators, and their future risk profiles, in selecting appropriate compliance tools and our level of engagement with them.

The future-looking risk factors will be those that could materially impact the achievement of better outcomes for applicants and that achieve defined fairness-based public policy considerations. See the most current set of historical performance indicators and forward-looking risk factors.

In any given period, the OFC’s compliance activities may be geared towards individual regulators, more thematic/systemic issues across classes of regulators, or both.

We will take into account the distinct mandates of individual regulators and adjust our responses as needed, based on a regulator’s profile, current situation, and how it is achieving compliance.

3. We will apply a proportionate approach to improve and promote compliance.

The resources that we will employ to monitor the activities of a regulator will be proportional to the historical experience, and level of risk, associated with that regulator’s activities.

The OFC will focus its efforts on those regulators that have achieved less progress in meeting their compliance requirements than their peers and/or are considered to demonstrate an elevated forward-looking risk profile. Conversely, regulators that are meeting their specific compliance obligations, and/or making substantial progress in providing registration practices that are transparent, objective, impartial and fair, may be subject to less prescriptive reporting and related requirements.

4. We will communicate, educate and offer guidance to regulators to promote and enhance compliance.

The OFC will employ a suite of compliance tools and work with regulators to improve their registration and assessment processes. These approaches will include education, outreach, peer discussions, the dissemination of best practices materials and tool-kits, annual reporting requirements and more formal reviews of regulation practices designed to enhance compliance.

5. We will monitor, measure, evaluate and report on our activities and outcomes in order to adapt and improve our compliance activities.

To the extent possible, the data and evidence that the OFC collects will inform the determination of regulator risk profiles and associated compliance activity. The OFC will also work to employ modern technologies and pathways to simplify its data collection, reporting and information dissemination functions.

6. We will share information and collaborate to reduce burdens and promote greater consistency.

The OFC will work constructively with other regulatory oversight bodies to reduce the regulatory burden on individual regulators. In particular, the OFC acknowledges that both it and the Ontario Ministry of Health have a shared responsibility to work with health colleges to achieve fair registration practices.

To view the OFC’s modern regulator principles , click here.

The OFC’s Risk-informed Compliance Framework

The OFC’s compliance framework and allocation of associated resources will be guided by its Risk-informed Compliance Framework. The framework will rely on both the regulator’s historical performance, and forward-looking risk factors that could impact a regulator’s ability to achieve better registration outcomes for applicants. These two components are elaborated upon below.

Historical Performance Indicators

The OFC will consider the following five historical performance indicators:

1. The nature and extent of material compliance recommendations that the OFC has issued to the regulator in the last compliance cycle.
2. The extent to which the regulator has complied with these recommendations and avoided new issues.

3. The regulator’s observed motivation to work with the OFC on defined compliance objectives.

4. The content of decisions issued by the courts or tribunals that discuss the regulator’s registration practices.

5. The degree to which the regulator’s registration processes exhibit the attributes of transparency objectivity, impartiality and fairness, as demonstrated, for example, by the number of OFC recognized “commendable practices” and/or other best practices and innovations that the regulator has instituted over time.

Once the OFC has analyzed the regulator’s performance against these factors, it will then place the regulator into one of three compliance categories, as described in Table 1 below:

Table 1: Compliance Categories

Full Compliance with the Objectives of the Legislation

Substantial Compliance with the Objectives of the Legislation

Performance Falls Short of Compliance with the Objectives of the Legislation

The OFC has not issued any compliance-based recommendations to the regulator during the past assessment cycle.

The OFC's compliance recommendations do not directly impact the regulator's core decision- making role to either grant or deny application licences.

The OFC's compliance recommendations relate to issues that directly impact the regulator's decisions to either grant or deny licences to applicants. There may also be

evidence of acts or omissions that contravene the legislation.

The regulator has consistently implemented the OFC's advice and recommendations in a timely and collaborative manner.

Same as first column.

There are a number of material OFC recommendations that remain outstanding and/or the proposed implementation timeline that the regulator has proposed is unreasonable.

The regulator has taken substantial steps to improve the fairness and efficiency of its registration processes, through such mechanisms as investments in IT infrastructure, partnerships with other organizations, improving its processing time frames and working constructively with applicants to help them achieve their registration goals.

Same as first column but to a lesser extent.

The regulator's investment in IT infrastructure, partnerships and client-centered processes has lagged that of other regulators.

The regulator has proactively and consistently identified barriers to access by, for example, instituting OFC- endorsed commendable practices, other best practices and innovations, to mitigate such barriers.

Same as column one but to a lesser extent.

The regulator has failed to proactively identify barriers to access and to reasonably respond to these circumstances despite OFC's recommendations to do so.

Forward-Looking Risk Factors

The OFC has also identified five forward-looking risk factors to help determine the regulator's risk profile. These risk factors identify the existing and potential risks posed to fair registration access for Canadians and internationally trained individuals.

1. Organizational Capacity

1.1 Description of the Risk Factor

A regulator that is, for example, newly established, relatively modest in size and/or inadequately staffed, may experience heightened challenges in meeting its compliance obligations or registration goals.

1.2 Factors to Consider in Determining the Likelihood of the Risk Occurring

Extent of the regulator’s overall knowledge of, and experience with, fair access legislative requirements and how to achieve them.
Extent to which the regulator has adopted a risk-based approach to its own decision-making framework.
Extent of reliance on mature and agile IT systems and related business processes.

1.3 Factors to Consider in Determining the Impact of the Risk

Where the size of the regulator’s annual registration cohort is large, the overall impact would be more substantial.

2. Overall control that a regulator exerts over its assessment and registration processes.

2.1 Description of the Risk Factor

The regulator does not have robust processes in place to monitor and evaluate the work of its third-party service providers.
The regulator cannot demonstrate that it holds these service providers accountable to ensure that the delegated assessment or registration activity is undertaken in a way that is transparent, objective, impartial and fair.
Material changes regularly occur to the regulator’s mandate, especially those imposed by legislation and/or external circumstances.

2.2 Factors to Consider in Determining the Likelihood of the Risk Occurring

The number and nature of existing third-party arrangements.
Extent to which a clear accountability framework is formalized and agreed upon between the regulator and its service providers.
Extent to which the regulator is successfully overseeing the work of its third-party service providers upon whom the regulator relies for the delivery of these services.
Whether an applicant’s appeal rights are preserved with respect to the third party’s decision-making processes.
The dynamism of the regulator’s industry or sector and the extent to which the regulator is subject to potential material changes to its assessment and registration systems.

2.3 Factors to Consider in Determining the Impact of the Risk

Where the size of the regulator’s annual registration cohort is large, the overall impact would be more substantial.
The materiality of the delegated/outsourced registration activity to the licensing process.
Extent to which the delegated registration activities are carried out in a timely manner and adhere to the regulator’s articulated performance standards.

3. Response to emergency situations, such as the Covid-19 pandemic

3.1 Description of the Risk Factor

The regulator’s assessment and registration processes have been materially impacted by emergency situations, such as the Covid-19 pandemic, and/or it is not focused on re-engineering its processes to make them more resilient to disruptions.

3.2 Factors to Consider in Determining the Likelihood of the Risk Occurring

Extent to which key aspects of the regulator’s assessment and registration processes have been disrupted to date owing to the Covid-19 pandemic.
Extent to which the regulator’s regulatory framework, systems, processes and infrastructure allow for a flexible and agile response to emergency event disruptions such as the pandemic, including the provisional registration of candidates.
Plans that the regulator has formulated to develop a more resilient and disruption-resistant registration process in the future.

3.3 Factors to Consider in Determining the Impact of the Risk

Nature of anticipated registration delays, if any.
Extent to which the regulator delivers essential services that are critical to the province’s response to the pandemic and economic recovery.
Whether the regulator has permitted applicants to begin to practice subject to completing any remaining registration requirements.
Where the size of the regulator’s annual registration cohort is large, the overall impact would be more substantial.

4. Over-reliance on Canadian experience requirements

4.1 Description of the Risk Factor

The regulator requires Canadian work experience as part of its licensing/registration requirement in a way that leads to inappropriate exclusion of internationally trained applicants who do not possess, and find it difficult to secure, such experience.

4.2 Factors to Consider in Determining the Likelihood of the Risk Occurring

Whether the regulator’s governing statute contains Canadian work experience requirements and whether the regulator has the ability to waive the requirement.
Extent to which the regulator can demonstrate how the Canadian work experience requirement is necessary and relevant to public health and safety and has searched for, and adopted, acceptable alternatives.
Extent to which this approach has compromised the ability of internationally trained applicants to pursue their professions or trades in Ontario.

4.3 Factors to Consider in Determining the Impact of the Risk

Criticality of the services that members of the profession/compulsory trade perform.
Extent to which the number of internationally trained applicants applying to the profession/ compulsory trade are increasing/decreasing, and contributing/compromising broader immigration and labour market goals.
Where the size of the regulator’s annual registration cohort is large, the overall impact would be more substantial.

5. Public policy considerations

5.1 Description of the Risk Factor

The OFC will initially consider two specific public policy issues:

Labour market considerations
The regulator’s registration processes are inadequately helping to address critical labour shortages in the province.

Inclusion and anti-racism considerations
The regulator does not demonstrate a sufficient awareness of unconscious bias and commitment to apply inclusion and anti-racism principles to its assessment and registration processes.

5.2 Factors to Consider in Determining the Likelihood of the Risk Occurring

Evidence of labour shortages coupled with inefficient, slow and/ unduly restrictive registration processes.
Extent to which the regulator applies an inclusion/anti - racism lens to its registration processes and decisions, as demonstrated, for example, by its approach to the treatment of racialized and internationally trained professionals.
Extent to which inclusion and anti - racism principles are embedded in the organizational culture, as demonstrated, for example, by the regulator’s accountability structure and commitment to training.

5.3 Factors to Consider in Determining the Impact of the Risk

Oversupply/undersupply of the profession/trade in the labour market.
Criticality of the services that the category of professional/skilled tradesperson performs.
Historical performance in successfully registering racialized and internationally trained candidates.
Where the size of the regulator’s annual registration cohort is large, the overall impact would be more substantial.

Under the forward-looking component of the methodology, the five risk factors will be assessed according to a more traditional risk assessment matrix (i.e., by analyzing the potential impact of the risk and the likelihood of its occurrence). These factors will then be analyzed to arrive at an overall risk profile for the regulator.

Determining the Risk Category of a Regulator

To determine a cumulative risk category for a regulator, the OFC will aggregate the risk profile of a regulator with the historical performance assessment. This may yield one of three possible risk categories:

1.Low
2.Moderately low
3.Moderate to high.

This risk category will, in turn, determine the degree of attention that the OFC will confer on the regulator and the associated compliance activities.

The OFC will typically reserve its more focused compliance processes for those regulators that it places in the moderate to high risk category.

OFC’s Compliance Tools and Compliance Continuum

The OFC has at its disposal a suite of tools to help ensure that regulators are complying with their legislative obligations and instituting fair and innovative registration practices. While the selection of compliance tools will be evidence-based, the OFC will also apply appropriate judgment to recognize factors that are outside the control of the regulators.

The extent of these tools, and the degree intervention, will be based on a compliance continuum. The compliance tools, and the circumstances by which they may be used, are described in Appendix 1.

The continuum of compliance tools is presented in the two pyramids below. Actions at the top of the inverted pyramid reinforce, and build upon, actions at the bottom. The approach involves progressive escalation to promote compliance with the legislation.

The OFC currently anticipates that the vast majority of the regulators are in the low risk category.

Diagram 1: Risk-based Continuum Categories with Associated OFC Compliance Tools

Risk Categories

Associated OFC Compliance Tools

Transition Strategy

The OFC will implement its Risk-informed Compliance Framework on a provisional basis on or about April 1, 2021. In the first year of operation, the assessment of a regulator’s risk category will be based predominantly on historical performance. The regulator will then be placed in a provisional risk category. The OFC will inform the regulator of the risk category in which it has been placed.

In addition, the assessment will rely more on qualitative analysis in the early stage of the transition period until more precise and quantitative measures are developed and validated.

During the transition period, the OFC will work with regulators towards implementing any outstanding compliance recommendations from the previous OFC assessment cycle, and to obtain information from the regulator on how the risk factors apply to them.

Towards the end of the transition period, the OFC Compliance Analyst assigned to the regulator will re-assess the risk categorization, in discussion with the regulator, taking into account the extent to which the regulator has made progress in implementing any outstanding compliance recommendations.

The full migration to the new system will commence on April 1, 2022.

At its discretion, the OFC may extend the transition period by a maximum of six months if it concludes that the impacts of the Covid-19 pandemic have materially impacted the ability of the regulator to align its risk mitigation processes and migrate to the new compliance framework.

Appendix 1: OFC Compliance Tools

This section briefly describes each of the OFC’s compliance tools and the circumstances in which it may be used.

1. Advice and Promotion of Fair Registration Best Practices

This tool incorporates a range of actions designed to promote compliance through education, advice, guidance and promotion of fair registration best practices. It is an appropriate tool to apply for all regulators and the OFC’s focus will depend on observed gaps in the regulator’s processes.

2. Completion and Submission of Reports

Pursuant to section 20 of FARPACTA, and section 22.7 of Schedule 2 to the RHPA, regulators are required to prepare and submit to the OFC a fair registration practices report annually or at such other times as the Fairness Commissioner may specify. As part of this obligation, the OFC asks that this report contain information on:

The current size of the membership of the profession, college or compulsory trade,
The number of total applicants,
The number of internationally trained applicants,
A demographics breakdown of both members and applicants (e.g., by gender and country of origin).

The OFC may seek additional information from regulators on a case-by-case basis according to their risk categories.

3. Meetings with Regulators

OFC staff will schedule regular meetings with regulators, the frequency of which will depend on the regulator’s risk category. These meetings will constitute a platform to exchange information and for regulators in the low and moderately low risk categories to provide updates and share information, as well as innovative fair registration best practices. For regulators in the moderate to high risk category, the meetings will serve as compliance forums to address and resolve ongoing and/or persistent fair access issues.

4. Compliance Action Plan

The compliance action plan is a tool reserved for regulators in the moderate to high risk category. The OFC and regulator will use this tool to track how a regulator is addressing, and making progress on, compliance issues that the OFC has identified for further action. While the OFC will work with the regulator to develop a mutually agreed upon compliance plan, it will also have the discretion to formulate this document on a unilateral basis.

5. Letter from the Fairness Commissioner to the CEO/Registrar, Board of Directors and/or Responsible Minister

If the regulator does not institute corrective actions, or show meaningful progress against stated objectives, the Fairness Commissioner may choose to write to senior officials within the organization and/or the responsible minister to outline his or her concerns. This approach would typically be reserved for regulators in the moderate to high risk category.

6. Publicizing non-compliance issues /opportunities for improvement (annual report or other publications)

If the compliance tools described above do not produce effective results, and the compliance issues persist, the OFC may choose to publicize its ongoing concerns regarding the regulator’s registration practices, through a variety of media, such as the OFC’s website, annual report and other publications.

The OFC will only use this compliance tool for regulators in the moderate to high risk category and provide prior notice of this action.

7. Review of Registration Practices

Under section 19 of FARPACTA, and section 22.6 of Schedule 2 to the RHPA, the OFC may also require that a regulator undertake a review of its registration practices to ensure that these practices are transparent, objective, impartial and fair. The OFC may mandate this review, on a case-by-case basis. While this report is required to canvass issues relating to the relevance or necessity of registration requirements, the timeliness of decision-making and the reasonableness of fees, the OFC can specify additional issues for review.

8. Assessment

Section 13(3)(a) of FARPACTA and section 22.5(1)(a) indicate that it is the function of the Fairness Commissioner to assess the registration practices of regulators based on their obligations under the statute and regulations. The assessment process is a compliance tool that the OFC may use for regulators in the moderate to high risk category. The OFC will conduct an assessment of a regulator’s registration practices to determine the regulator’s level of compliance. It will involve a review of relevant information to assess the extent to which the regulator is complying with its legal obligations and to develop informed conclusions on the appropriate corrective actions that the regulator should be taking.

9. Audit

The audit process is analogous to an independent investigation that is conducted by a third party that the OFC approves. It will typically involve a defined and targeted review of material and persistent deficiencies in a regulator’s registration processes. The audit is expected to yield a report with findings and recommendations. Under section 21(2) of FARPACTA and section 22.8(2) of Schedule 2 to the RHPA, the cost of the audit is borne by the regulator and the final report must filed with the Minister of Labour, Training and Skills Development for regulated professions and trades, and the Minister of Health for the health colleges.

Given the significant nature of the audit authority, the OFC will employ this tool sparingly and only where the circumstances so warrant. This tool is an available option for regulators in the moderate to high risk category.

10. Compliance Order

If the Fairness Commissioner concludes that a regulated profession has contravened either the specific duties (Part III) and/or reporting obligations (Part VI) enumerated in FARPACTA, a compliance order may be issued against the regulator. The order may contain any actions that the Fairness Commissioner deems appropriate for the regulator to do, or to refrain from doing, in order to comply with the legislation.

FARPACTA outlines a specific process for issuing an order. This authority is not conferred to the Fairness Commissioner under Schedule 2 to the RHPA.

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