Hospitals, as corporations and part of the broader public sector, have various governance, operations, and accountability requirements with which they must comply. Additional requirements may apply depending on a hospital’s charitable status, lobbying activities, and procurement activities. Some of the Acts in this section require certain records to be maintained. Please refer to the OHA's Records Retention Toolkit: A Guide to the Maintenance and Disposal of Hospital Records for specific details on these compliance requirements.
The BPSAA governs and outlines the transparency and accountability requirements for organizations that receive funding from the Government of Ontario, but that are not part of government itself, known as the broader public sector (BPS). These requirements relate to BPS organizations’ use of lobbyists and consultants and enable the Management Board Cabinet and Minister of Health to issue directives relating to BPS expense claims, perquisites, procurements, business plans and compliance reports.
For the purposes of this Guide, the BPSAA applies to “designated broader public sector organizations” and “hospitals”, both of which include hospitals within the meaning of the Public Hospitals Act.
What are the key requirements for hospitals under the BPSAA?
- Hospitals, subject to association membership fees, must not engage lobbyists where the compensation for their services is paid for by public funds. (s 4) Additional rules with respect to lobbying are set out in the Lobbyists Registration Act, 1998, discussed below.
- Hospitals must prepare board approved reports on the organizational use of consultants in compliance with the Act, its regulations, and issued directives, if any. (s 6)
- Hospitals must establish expense rules in accordance with the Act, its regulations, and guidelines or issued directives, if any, and post the expense rules and expense claims on their website. (ss 8-11)
- Hospitals must establish perquisite rules, procurement standards, and business plans in accordance with the Act, its regulations, and guidelines or issued directives, if any. (ss 11.1-13.2)
- Hospitals must make annual attestations confirming compliance with the requirements of the Act, its regulations, and issued directives if any. Attestations must be made by the hospital’s “administrator” in a manner compliant with issued directives, if any, be approved by the hospital’s board of directors, and posted on the hospital's website. (s 15)
Compliance deadlines are currently established via directive, which may vary from time to time as new directives are issued. At the time of publication, the following deadlines are in force:
- Hospital business plans must be published online annually within six months of the beginning of the hospital’s fiscal year. Additional business or financial documents must be posted annually within six months of the end of the hospital’s fiscal year. (Business Documents Directive, ss 4.1-4.3)
- Hospitals must submit an annual report on the use of consultants to Ontario Health by June 30 every year with respect to the hospital’s most recent fiscal year. (BPS Hospital Reporting Directive, s 2)
- Hospitals must post semi-annual expense claims by November 30 for the reporting period of April 1 to September 30 and by May 31 for the reporting period of October 1 to March 31. (BPS Hospital Reporting Directive, s 3)
- Hospitals must submit an annual attestation to Ontario Health by June 30 every year with respect to the hospital’s most recent fiscal year. The attestation must be posted on the hospital’s website by August 31 every year. (BPS Hospital Reporting Directive, s 4)
While no specific offences or penalties are outlined in the BPSAA, it both explicitly requires board approval on certain matters (consultant and attestation reports) as well as importing every BPSAA requirement into a hospital’s respective service accountability agreement (SAA, or funding agreement) with Ontario Health. (s 18) Careful consideration should therefore be given to the requirements of the BPSAA to ensure that these funding agreements are complied with.
For more information about the BPSAA, please refer to the following resources:
Broader Public Sector Accountability (Expenses Directive, Perquisites Directive, Procurement Directive, Procurement Restriction Policy, and Business Documents Directive located here)
BPSECA governs how certain publicly funded organizations in Ontario compensate executives. The Act sets limits on executive salaries, performance pay and other elements of compensation, and requires organizations to disclose executive compensation information. Additional executive compensation requirements are contained in the Excellent Care for All Act, 2010 and its according regulations.
Who does BPSECA apply to?
BPSECA broadly applies to “designated employers”, which includes hospitals within the meaning of the Public Hospitals Act, and its requirements apply to “designated executives” which includes: the “head” of the hospital (commonly the CEO/President), Vice Presidents, CAOs, COOs, CFOs, CIO, and “any other executive position or office” entitled to $100,000+ annual cash compensation.
What are the key requirements for hospitals under BPSECA?
- Hospitals must provide the Management Board of Cabinet with compensation and payment information as may be required via issued directives, if any. (s 5)
- Hospitals must comply with the requirements of the regulations, rules, and written ministerial communications comprising the “executive compensation framework” applicable to their respective organization. (ss 6-7; O Reg 406/18)
- Hospitals must comply with the compensation requirements of the Act and its regulations respecting the restructuring and/or addition of executives to their respective organizations. (s 11; O Reg 406/18)
- Hospitals must submit reports, signed by the highest-ranking officer, attesting to compliance with all requirements contained in an applicable compensation framework in accordance with the requirements of an issued directive, if any. (s 12)
Compliance deadlines are currently established via directive, which may vary from time to time as new directives are issued. Consideration should be given to the compliance deadlines outlined in the broader public sector accountability directives. Directives available at the linked location are currently “under review” and should be carefully monitored for ongoing compliance.
BPSECA contains provisions respecting ‘overpayment’. If an organization provides a designated executive with compensation in non-compliance with the applicable compensation framework, it is considered an overpayment. The overpayment provisions require re-payment to the Crown by the organization of any overpayment to an executive, or for the Ministry to recover the overpayment via other remedies available at law.
BPSECA requirements are also imported into every agreement or funding arrangement a hospital has with the Government of Ontario and/or Ontario Health. Careful consideration should therefore be given to the requirements of the BPSECA to ensure that these funding agreements are complied with.
For more information about BPSECA, please refer to the following resources:
BOBIA requires public sector organizations in Ontario to give preference to Ontario businesses when conducting procurements for goods and services under a specified threshold amount.
BOBIA applies to “public sector entities”, which includes “designated broader public sector organizations” under the Broader Public Sector Accountability Act, 2010. This definition includes hospitals within the meaning of the Public Hospitals Act.
What are the key requirements for hospitals under BOBIA?
Hospitals must give preference to Ontario businesses when conducting procurement processes for certain goods and services under $121,200 in compliance with the regulations. (ss 3; O Reg 422/23)
The Act does not contain any compliance deadlines.
While no specific offences or penalties are outlined in the BOBIA, it imports all BOBIA requirements into every agreement or funding arrangement between a hospital and the Government of Ontario and/or Ontario Health. (s 4) Careful consideration should therefore be given to the requirements of BOBIA to ensure that these agreements are complied with.
For more information about BOBIA, please refer to the following resources:
The CAA imposes certain requirements on Ontario charities. In addition, the CAA outlines and establishes the relationship between charities and the Public Guardian and Trustee (PGT), which plays a role in protecting charitable assets. It is important to note that the Ontario Not-for-Profit Corporations Act, 2010 (ONCA) confirms that if a conflict arises between ONCA or its regulations and “law relating to charities”, the law relating to charities will prevail.
Who does the CAA apply to?
The CAA applies to “trustees”, which includes “any corporation incorporated for a religious, education, charitable or public purpose”. This generally includes public hospitals within the meaning of the Public Hospitals Act.
What are the key requirements for hospitals under the CAA?
- Hospitals who hold an interest in real or personal property for a charitable purpose must use such property for such charitable purpose and in accordance with the terms, if any, expressed in a charitable devise, bequest or grant. (ss 8-9)
- Hospitals should consider the application and requirements of sections 27-31 of the Trustee Act. (s 10.1)
- Hospitals must not purchase director liability insurance or indemnify directors other than in compliance with the Act and regulations. (s 5.1; O Reg 4/01)
Rules were introduced under Reg 4/01 of this Act effective April 1, 2018. These regulatory amendments introduced changes to the rules on payments to directors of Ontario charitable corporations. They allowed for more flexibility in processes to pay a director (or a Connected Person, as defined in the Regulation) for goods, services or facilities provided to the charity. The board should be aware of these rules around authorizing payments to directors of charities.
The Act does not contain any compliance deadlines.
Where a trustee is in default, fails to comply with an order made under the Act or engages in misconduct, including the misuse of property or the improper investment of funds, the PGT can apply to the court for relief that includes a fine or imprisonment not exceeding 12 months. (s 4(k))
For more information about the CAA, please refer to the following resources:
The CIA governs corporate information filings and returns with the Ministry of Public and Business Service Delivery and Procurement (Ministry) through ServiceOntario.
Who does the CIA apply to?
The CIA applies to “corporations” which includes hospitals within the meaning of the Public Hospitals Act.
What are the key requirements for hospitals under the CIA?
- Hospitals must comply with the information and return filing requirements of the Act and its according regulations. (various sections)
- Hospitals must maintain a paper or electronic record of all information included in returns and notices filed under the Act and make them available. (s 5)
- Hospitals must file an Annual Return every year with the Minister of Public and Business Service Delivery and Procurement (Minister) within six months from the end of the hospital’s corporate fiscal year in compliance with the requirements of the Act and regulations. (s 3.1; O Reg 400/21, s 3)
- Hospitals must file a Notice of Change, accompanied by a verification certificate with the Minister within 15 days after the day the change takes place in accordance with the requirements of the Act and regulations. (ss 4-5)
- Hospitals must make any special filings, or further returns or notices, when requested in writing by the Minister, within 30 days after the day the notice is sent. (ss 6-7; O Reg 400/21, s 6)
Every director who authorizes, permits, or acquiesces to making a false or misleading statement or omits to state any material fact that subsequently makes a statement false or misleading, in any document or information submitted under the CIA, is guilty of an offence and is liable on conviction to a fine of not more than $2,000 or imprisonment for a term of not more than one year, or both. (s 13)
In addition, the CIA contains a catch all liability provision identifying that every director who contravenes the CIA and its regulations, or fails to observe or comply with an order, direction or other requirement under the CIA and its regulations is liable to a fine of not more than $2,000. (s 14)
For more information about the CIA, please refer to the following resource:
The Supply Chains Act came into force on January 1, 2024, imposing annual reporting obligations on many Canadian entities, potentially including some Ontario hospitals, in an attempt to minimize the risk of forced labour and child labour in supply chains.
Who does the Supply Chains Act apply to?
To be required to submit a report, an organization must meet the definition of entity under section 2 of the Act and meet the criteria for being a reporting entity, as per section 9.2. In other words, an organization may be an “entity” under the Act but not be required to report. The Act does not require reporting from entities which solely engage in selling and distributing goods. To determine whether a hospital is subject to reporting obligations under the Act, please refer to the guidance documents linked below.
What are the key requirements for hospitals under the Supply Chains Act?
Hospitals that meet the definition of an entity and criteria for a reporting entity must submit an annual report to the Minister of Public Safety and Emergency Preparedness containing the information set out in the Act. The report must be approved by and receive the attestation of the hospital’s board of directors. (s 11) Additionally, the report must be made available to the public including publication on a prominent location on the hospital’s website. (s 13)
The annual report must be submitting by May 31st of each year for the entity’s previous financial year. (s 11)
Every person or entity failing to comply with specified sections of the Supply Chains Act are guilty of offences, punishable on summary conviction, and liable to a fine of not more than $250,000. (ss 19(1)-(2)) If a person or entity commits such an offence, any director or officer who “directed, authorized, assented to, acquiesced in or participated in its commission is a party to and guilty of the offence and liable on conviction to the punishment provided for the offence, whether or not the person or entity has been prosecuted or convicted.” (s 20)
For more information about the Supply Chains Act, please refer to the following resources:
The LRA was introduced to ensure lobbying activities are more transparent and publicly accountable. The LRA requires lobbyists to register with the Office of the Integrity Commissioner of Ontario (OICO) and maintain up-to-date information on the publicly available lobbyist register. The LRA establishes OICO’s powers and responsibilities to administer and enforce the Act, including through issuing interpretation bulletins and conducting investigations.
Who does the LRA apply to?
Broadly speaking, the LRA applies to lobbyists. More specifically, the LRA applies to “consultant lobbyists”, “in-house lobbyists”, and “organizations”. Hospitals may be considered “in-house lobbyists” if certain lobbying thresholds are met (see below) and hospitals should be mindful of rules under the LRA when engaging lobbyists to conduct work on the hospital’s behalf.
What are the key requirements for hospitals under the LRA?
- If a hospital is registered as a lobbyist, it must not knowingly put a public office holder, as defined in the Act, in a position of real or potential conflict of interest. (s 3.4)
- Hospitals must register as an in-house lobbyist organization if paid hospital employees cumulatively engage in 50 hours or more of lobbying activity in a year. (s 6) Once a hospital is registered as a lobbyist, it must maintain its registration in accordance with the Act. (s 6)
- A hospital’s “senior officer” (i.e., the most senior officer who is “compensated for the performance of his or her duties”) must file a return with OICO within two months after the day on which the hospital becomes an in-house lobbyist organization and within 30 days before or after each six-month period after the date of filing the previous return. (s 6)
- The senior officer of a hospital registered as a lobbyist must update the hospital’s registration within 30 days of a change to the information in the registration occurring or acquiring knowledge of the change. (s 6(3.1))
The Act does not contain any director specific offence provisions.
For more information about the LRA, please refer to the following resources:
ONCA, subject to specified exceptions, provides the legal framework governing the life cycle of not-for-profit and charitable corporations incorporated in Ontario, including incorporation, formation, operation, governance, and dissolution. Careful attention should be paid to the requirements of the Act together with a hospital’s articles of incorporation (formerly letters patent), corporate by-laws, and internal policies and procedures enabled by these constating documents. Among other things, ONCA sets out incorporation requirements, corporate powers, the roles and responsibilities of directors, officers and members, voting requirements, the nature of required corporate resolutions, corporate change provisions, and statutory rights against a corporate body. ONCA and the Public Hospitals Act are the primary statutes impacting a hospital’s corporate control structures.
ONCA, subject to specified exceptions, applies to “every body corporate without share capital” incorporated under, or within the authority of, the laws of Ontario. This includes hospitals within the meaning of the Public Hospitals Act. More specifically, hospitals may also fit the definitions of “corporation”, “charitable corporation”, “non-charitable corporation”, and “public benefit corporation” under ONCA.
What are the key requirements for hospitals under ONCA?
Refer to the OHA’s ONCA resource documents, including the ONCA-compliant Hospital Prototype Corporate By-law, for details.
Hospital directors and officers are required to act honestly and in good faith with a view to the best interests of the corporation; exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; comply ONCA and its regulations; and comply with the hospital’s articles of incorporation and by-laws. (s 43)
- Hospital directors must, not later than 15 months after holding the preceding annual meeting, call an annual meeting of the members of the corporation. (s 52)
- Hospital directors must approve the financial statements of the hospital for the period ending, not more than six months before the annual meeting. (s 83)
- Hospital directors must consent, in writing, to their directorial appointment before or within 10 days after their election or appointment. (s 24)
- Hospitals must give notice of the time and place of a members meeting in accordance with their by-laws, but in any event, not less than 10 days and not more than 50 days before the meeting. (s 55)
- If there is not a quorum of directors on a hospital board, the hospital directors then in office must, within 30 days after the vacancy occurs, call a special members meeting to fill the vacancy. (s 72)
- Hospital directors must provide members with the director approved financial statements, auditor report, other information respecting the financial position that may be required by the articles and by-laws, not less than 5 business days before each annual meeting to all members who wish to receive a copy of the documents. (s 84; O Reg 395/21)
- Hospitals must also comply, as may be applicable, with a series of timelines respecting:
- Member proposals (s 56);
- Fundamental corporate changes (s 103-173); and
- The rights of dissenting members (s 187).
ONCA codifies the understanding that corporations are separate legal entities with the “powers and privileges of a natural person”. (s 15) Broadly speaking, this means the principle of limited liability applies and directors are generally not held personally liable for corporate obligations. That said, there are exceptions to this general principle. While these exceptions include judge-made law, this resource focuses exclusively on the elements of director liability outlined in each respective statute. ONCA provides that, in specific circumstances, directors may be held personally liable for:
More broadly, every director who authorizes, permits, or acquiesces in:
is guilty of the respective offence and liable to a fine not exceeding $5,000 and/or imprisonment for a term not exceeding six months whether or not the body corporate has been prosecuted or convicted. (s 193(4))
ONCA provides certain reasonable/due diligence defences for directors (ss 44, 193(5)).
Additional Resources
For more information about ONCA, please refer to the following resources:
The PSSDA requires the public disclosure of certain salary and benefit information of public sector employees by public sector employers, in order to provide taxpayers the ability to compare performance with pay.
Who does the PSSDA apply to?
The PSSDA applies to “public sector employers”, which includes hospitals within the meaning of the Public Hospitals Act.
What are the key requirements for hospitals under the PSSDA?
Hospitals must annually publicly disclose the amount of salary and benefits paid by the hospital in the previous year to its employees that were paid $100,000 or more in salary. Records must include employee name, office or position held, salary, and benefits reported under the Income Tax Act. (s 3)
- “Public disclosure” must occur not later than March 31 of each year. (s 3)
- Hospitals must also provide copies of the disclosed information to designated ministries “not later than the fifth business day of March of each year”. (O Reg 85/96)
No specific director offence and penalty provisions are included in the PSSDA, but if a hospital fails to comply with the PSSDA, its funding may be restricted. (s 5)
For more information about the PSSDA, please refer to the following resources:
The TA establishes the framework outlining the duties and responsibilities of trustees who manage property or assets on behalf of others (beneficiaries). The TA contains provisions governing the administration of trusts, investment of trust assets, distribution of trust assts, and trustee decision-making. The TA also affirms the oversight role of the Office of the Public Guardian and Trustee.
Who does the TA apply to?
Section 10.1 of the Charities Accounting Act (CAA) provides that sections 27-31 of the TA, respecting charitable asset investment, apply to corporations deemed to be trustees under the CAA. As outlined under the CAA portion of this Guide, this generally includes public hospitals within the meaning of the Public Hospitals Act. The TA also applies when hospitals hold monies in trust for a charity or for charitable purposes.
What are the key requirements for hospitals under the TA?
- Hospital directors (trustees) must exercise the care, skill, diligence and judgement that a prudent investor would exercise in making investments. (s 27(1))
- Hospital directors (trustees) must consider the criteria specified in the Act when planning the investment of trust property. (s 27(5))
- Hospital directors (trustees) must diversify the investment of trust property in compliance with the requirements of the Act. (s 27(6))
- Hospital directors (trustees) must not invest trust property contrary to any provisions contained in their articles of incorporation, amendment, etc. (s 27(10))
- Hospital directors (trustees) must comply with the investment delegation provisions contained in the Act. (s 27.1)
The Act does not contain any compliance deadlines.
Directors may be held personally liable for failing to meet the prudent investor standard outlined in the TA. (ss 27-28) Directors should adopt “a plan or strategy for the investment of the trust property, comprising reasonable assessments of risk and return, that a prudent investor could adopt under comparable circumstances” to avoid liability for losses of trust assets. (s 28)
For more information about the TA, please refer to the following resources:
