Newsletter - April 2021 Edition
The OFC’s New Risk-informed Compliance Framework
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On April 1, 2021, the Office of the Fairness Commissioner (OFC) launched its new Risk-informed Compliance Framework (the framework). This document supersedes and replaces the OFC’s Strategy for Continuous Improvement.
The framework will now govern how our office undertakes its compliance responsibilities and monitors fair registration practices for individual regulators. The OFC will implement this new model in a phased manner. In the first year of operation, a regulator will be placed in a provisional risk category based predominantly on its past performance. The new scheme, which will also feature a forward-looking risk analysis, will come into effect fully on April 1, 2022.
All the information on the framework is available on the OFC's website.
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The Need for a More Modern Compliance Framework
When the OFC was first established in 2007, it became responsible for overseeing regulator compliance with fair access legislation. At that time, the OFC was the first oversight body of its kind in Canada. Given the diversity of regulators for which it was responsible, the office decided that its compliance model should focus on understanding the particulars of each regulator’s registration activities and collecting baseline information to inform this work.
Under this model, which was later named the Strategy for Continuous Improvement, OFC staff would regularly monitor the progress that a regulator achieved through a process of cyclical assessments and reporting. The strategy which, in some ways, constituted a “one-size-fits-all†approach, was also premised on working collaboratively with regulators to guide them towards achieving compliance with the new legislation.
With the passage of time, it has become clear that our office needs to better align its oversight activities with a more modern and targeted approach to compliance. Such a scheme would be designed to raise the performance of all regulators in order to achieve better outcomes for applicants.
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Modern Regulator Principles
The OFC’s framework is premised on the fact that most regulators are complying with their legislative obligations and are actively supporting transparent, objective, impartial and fair registration practices. On this basis, the OFC has determined that it will allocate its finite compliance resources towards those regulators that have not achieved as much progress as others in improving their registration systems.
The OFC also believes that it must become a more agile regulator that employs a suite of compliance tools. These would include both traditional compliance mechanisms, as well as approaches that involve consultancy and educational services, and the dissemination of best practices.
Based on consultation with subject matter experts, regulators and other key stakeholders, the OFC has identified six modern regulator principles that will underpin our work. These 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/or that achieve defined fairness-based public policy considerations. Click the following links to view the 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 also 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 download the OFC’s modern regulator placemat, please click here
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The Components of our Risk-informed Compliance Framework
The new framework will guide the OFC in planning and delivering its compliance activities and strengthen our capacity to oversee fair registration practices. Under the framework, the OFC will ascertain a regulator’s risk profile by focusing both on its historical performance and how a number of pre-defined, forward-looking risk factors are likely to impact its future performance. These two components of the framework are set out below:
Historical Performance Indicators
The OFC has identified five historical performance indicators to define the compliance category into which a regulator will be placed:
- The nature and extent of material compliance recommendations that the OFC has issued to the regulator in the last compliance cycle.
- The extent to which the regulator has complied with these recommendations and avoided new issues.
- The regulator’s observed motivation to work with the OFC on defined compliance objectives.
- The content of decisions issued by the courts or tribunals that discuss the regulator’s registration practices.
- 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.
Forward-Looking Risk Factors
The OFC has also identified five forward-looking risk factors to help determine the regulator’s risk profile. These are:
- Organizational capacity.
- The overall control that a regulator exerts over its assessment and registration processes.
- The regulator's response to emergency situations, such as the Covid-19 pandemic
- Over-reliance on Canadian experience requirements
- Public policy considerations, specifically:
- critical labour shortages of professionals or tradespersons that involve the regulator, and
- the need to apply inclusion and anti-racism approaches to the regulator's assessment and registration processes.
Once these historical and forward-looking considerations are assessed, the OFC will place the regulator into a specific risk category. This placement will, in turn, dictate how closely the OFC will monitor the regulator’s activities during the year, and inform the range of enforcement tools that the office would typically apply to address instances of non-compliance.
For more information on the components of the framework, please refer to the Risk-informed Compliance Framework and Policy that may be found here .
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What's Next
OFC officials are currently reviewing our agency’s business practices to ensure that they align with the new risk-informed compliance framework. Once this exercise is completed, our Compliance Analysts will begin to engage regulators to obtain information on how the identified forward-looking risk factors apply to them and to discuss the implementation of any outstanding compliance recommendations.
On a related matter, the OFC is also working to develop a complimentary policy to allow our agency to more clearly outline a regulator’s legal compliance obligations and to articulate associated best practices.
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2019-2020 Annual Report
The OFC’s 2019-20 annual report, titled A Time of Transition, is now available on our web site. This document outlines our agency’s mission, mandate and principles, takes stock of our accomplishments during the relevant 12-month period, presents some interesting statistics about the registration of professionals in Ontario, provides some best practices in regulation and discusses our going-forward priorities.
These priorities include identifying the impacts of COVID-19 on the continuity of registration processes, migrating to a risk-informed compliance framework, exploring the relationship between regulators and third party service providers, and exploring opportunities for regulators to more routinely apply an inclusion and anti-racism lens to their registration mandates. To access an electronic copy of this report, please click here.
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