iGaming

The launch of Ontario’s igaming market on April 4, 2022, was a major milestone.

The AGCO developed a regulatory model for this new, competitive market that protects consumers and provides them with choice, reduces red tape and supports legal market growth and provincial returns.

This model reflects the AGCO’s regulatory objectives for igaming while meeting the unique requirements of the igaming open market. It was informed by a series of engagements with industry stakeholders on the Registrar’s Standards for Internet Gaming (Standards) and the eligibility and compliance approaches for igaming. Following the federal government’s legalization of single-event sports betting, the AGCO also undertook stakeholder engagement on the regulatory standards for sports and event betting, which apply to all sports, esports, novelty and betting exchange.

Through the igaming regulatory model, the AGCO undertook several strategic shifts in its operational compliance and eligibility activities to ensure market participants act in accordance with the law, with honesty and integrity, and in the public interest.

Engagements were also initiated with other jurisdictions to inform the creation of the AGCO’s player service model to ensure information and assisted services met player needs.

The updated risk-based registration model emphasizes applicant ability to meet the Standards and previous experience of applicants, including history in leading jurisdictions. Compliance activities focus on ensuring regulatory objectives are met through innovative, targeted approaches. This includes setting compliance expectations for entry into the market through game and critical system testing, confirmations of full system compliance with the Standards, as well as setting and monitoring priority compliance areas with targeted monitoring and interventions where appropriate.

The AGCO provided smooth and transparent service delivery to igaming customers, including:

• publishing guides on its website to assist prospective igaming Operators and Gaming-Related Suppliers with the registration process (for example, the Internet Gaming Operator Application Guide) and to help them understand compliance requirements when participating in Ontario’s regulated market (for example, the Internet Gaming Go-Live Compliance Guide);
• collaborating with iGaming Ontario (iGO) on the development and coordination of a robust onboarding process to ensure igaming Operators have met all requirements to enter the market;
• implementing a robust customer service model for handling both regulatory and iGO matters, including responding to complaints and inquiries; and
• making enhancements to the AGCO internet gaming portal, including the creation of a new player support section to provide players with information about the new igaming model and additional resources.

The AGCO also implemented system changes to support the launch of the new igaming market. This included updates to the iAGCO online portal to include igaming applications, processes for complaints and inquiries and development of a digital system to monitor and manage ongoing compliance activities through regulatory intelligence data.

Over the course of 2022-23, the AGCO supported 45 operators to launch in Ontario and meet AGCO compliance requirements. This includes the transitioning of 33 operators from the unregulated market into the regulated market.
 

Liquor modernization

The Liquor Licence and Control Act, 2019 (LLCA) came into effect on November 29, 2021, marking a major milestone for liquor regulation in Ontario. The new liquor framework under the LLCA enables the AGCO to modernize the way it regulates the sale, service and delivery of liquor and allows for a more flexible approach.

The new liquor framework is designed to reduce burden, facilitate better monitoring and compliance and reflect the changing liquor landscape for the benefit of Ontarians. It includes the introduction of a new liquor licence and permit structure and the transfer of the regulatory authority for some activities from the Liquor Control Board of Ontario (LCBO) to the AGCO.

The Registrar’s Interim Standards and Requirements for Liquor (Interim Standards) came into effect under the LLCA and primarily maintain and consolidate many of the previous requirements. Over the coming years, the AGCO will build on this work to develop a comprehensive outcomes-based regulatory model, consistent with our overall strategic approach for other regulated sectors.

Enhanced social responsibility measures were also introduced with the creation of a new re-certification requirement for licensees relating to the responsible sale, service and delivery training (such as Smart Serve). The AGCO adopted this industry best practice in recognition of the significant modernization of Ontario’s liquor sector and the need for continued commitment to social responsibility and public protection in the liquor sector.
 

Cannabis

In June 2022, the AGCO amended rules related to inducements in the Registrar’s Standards for Cannabis Retail Stores to create an additional exemption permitting agreements between retailers and federally-licensed producers (LPs) for store brand products. The objective of these changes was to reduce anti-competitive practices. As the cannabis sector evolves, the AGCO will continue to be responsive, including supporting innovation and flexibility in the sector while regulating in accordance with the principles of honesty and integrity and in the public interest.

Building on the relationships built between the AGCO and First Nations during the cannabis engagements, the AGCO’s compliance team has further strengthened its relationship with leadership in multiple First Nations communities through the establishment of regular communication mechanisms. The AGCO has set up quarterly roundtable meetings with several First Nation representatives to maintain open lines of communication and keep First Nations apprised of any new developments.

In November 2022, the Registrar submitted a letter to the Expert Panel leading the review of the Cannabis Act, outlining the AGCO’s perspective on possible amendments to the federal Cannabis Act to give provincial regulators more flexibility in developing and enforcing regulatory requirements related to cannabis display, promotions, and advertising.
 

Gaming modernization

Gaming modernization is focused on identifying the successes and lessons learned from the implementation of the igaming regulatory framework and their applicability to casino gaming, as well as identifying specific opportunities for burden reduction and how to better target potential harms in the casino sector. This strategy also encompasses the regulatory work to support OLG Lottery Expansion, which involves the introduction of 1,400 self-serve terminals in the province starting in November 2023, and the ongoing transition of the igaming and sport and event betting frameworks to regular operations.

Key accomplishments from the 2022–23 year include:

• completing internal work to review current standards, eligibility and compliance in the casino sector in preparation for external consultations in 2023. This work builds on many of the innovations introduced in igaming and aims to address casino concerns about creating a fair and competitive regulatory environment across gaming sectors;
• supporting MAG in its work to make the necessary regulation changes under the Gaming Control Act to permit self-serve lottery terminals, as well as completing the regulatory analysis to identify potential impacts to the Registrar’s Standards for Gaming: Lottery Sector; and
• completing a number of external engagements related to making adjustments to the  Registrar’s Standards for Internet Gaming.
   

Charitable Gaming

In Winter 2022, AGCO supported the charitable gaming industry through a number of strategic updates to simplify processes and reduce burden with the objective of providing more effective fundraising for charities. These updates focused on:

• clarifying collaborative fundraising opportunities;
• updating temporary COVID-19-related flexibilities to provide permanent flexibility where possible;
• updating rules for Bingo Revenue Model Halls to reduce burden by permitting the use of credit and debit cards and decreasing the number of charity representatives required to be present at the hall;
• updating terms and conditions for Break Open Tickets to be more standards and outcomes-based; and
• increasing permissible use of proceeds for Service Clubs and Royal Canadian Legions and clarifying additional ways these organizations can use charitable funds for general operating and maintenance costs of their own premises.

Equine welfare

As part of the AGCO’s ongoing commitment to protecting Ontario’s racehorses, enhancing the integrity of racing and providing a regulatory framework appropriate for today’s racing industry, we have worked with industry participants on four welfare reforms that are anticipated to take effect in Spring 2023, which include:

• a new rule and a revision to the Thoroughbred Rules of Racing to ensure safe and acceptable loading practices in the starting gate, for both horses and starting gate personnel;
• certain medications and substances will now be regulated in horses participating in an Official Workout (Thoroughbred and Quarter Horse) or in a Qualifying Race (Standardbred);
• a new rule that will require licensed trainers to report all stabling locations they operate under their licence, including any location changes to the Registrar within five (5) calendar days; and
• a revision of 22.19 of the Standardbred Rules of Racing will update language and the penalty structure that prohibits a driver’s foot to make contact with the horse in any manner, aligning it more closely with the urging provisions.

Service metrics

The AGCO’s Contact Centre and Communications teams serve licensees, registrants and authorization holders as well as members of the Ontario public. The following tables show interactions via the AGCO’s customer service channels, communications with stakeholders and inquiries and complaints as of March 2023. The tables also include volumes from the previous fiscal year.
 

Table 2—Service provision

Table 3 —Communication with AGCO stakeholders

Table 4 —Inquiries and Complaints

Table 5—Online Service and auto-renewal

The following table shows the percentage of licences, registration and authorizations in regulated sectors that were automatically renewed, further contributing to a streamlined process and reduced burden.

Note: Cannabis renewals significantly increased in 2022-23 due to the increased number of cannabis retail stores in the province. This resulted in an increased total number of renewals flagged by AGCO’s eligibility criteria, disqualifying them from auto-renewal and decreasing the percentage of cannabis auto-renewals.

The AGCO provides services to a wide group of licensees, registrants and authorization holders. The following tables show AGCO’s current active licensees, registrants and authorization holders as of March 2023. The tables also include volumes from the previous fiscal year.

Table 6—Total number of AGCO licensees and registrants

Table 7—Total number of liquor licences

Table 8—Total number of gaming registrations

Note: The 2021-22 Annual Report included AGCO Subsidiary (iGO) in this table, however, the subsidiary is not a registrant of the AGCO. As a result, iGO has been removed from this year’s Annual Report.  

Table 9—Total number of cannabis licences and authorizations

Table 10—Total number of horse racing licences

The AGCO’s Operations Division is responsible for reviewing and processing new, renewal and amendment applications for licences, permits, authorizations and registrations for the sectors regulated by the AGCO. Eligibility Officers, Senior Eligibility Officers and Managers review applications to assess an applicant’s eligibility to hold a particular licence, permit, authorization or registration. When necessary, they enlist the services of additional AGCO departments, such as Compliance Services and the OPP Investigation and Enforcement Bureau, to facilitate further review or investigation of an application.

As part of the AGCO’s risk-based licensing approach, the AGCO considers various factors in reviewing applications. These factors include an applicant’s type of business, location, compliance history and experience. Some applicants pose a greater risk to public safety, public interest and/or non-compliance with the law. Additionally, when reviewing an application, past conduct, financial responsibility, experience, training and honesty and integrity of an applicant are considered. If the Registrar believes that the issuance of a licence or registration is not in the public interest, the Registrar may issue a Notice of Proposal (NOP) to review or refuse to the applicant or licensee, who may request a hearing on the NOP before the Licence Appeal Tribunal (LAT).

If the Registrar believes that a licensee or registrant may require additional assistance or support to remain compliant with the applicable acts and/or the Registrar’s Standards, additional conditions may be attached to their licence, permit, authorization or registration. Licensing and Registration (L&R) performs risk-based assessments during the lifetime of all licences, permits, authorizations and registrations to ensure potential risks posed by a licensee or establishment are considered and evaluated.

Highlights for licensing and registration activities in 2022–23 include the continued processing of high volumes of cannabis retail operators and retail store authorizations as the regulated cannabis market continued to evolve at a fast pace. In addition, several net new registrations were issued to internet gaming operators and gaming related suppliers to support the establishment of a competitive and open internet gaming market in Ontario.

The following tables outline the number of licences and registrations issued during the fiscal year. It is important to note that the following tables represent applications that have been approved and issued, not all applications submitted.

Table 11—Liquor licences issued, renewed and amended

Table 12—Gaming registrations issued, renewed and amended

Note: The 2021-22 Annual Report included AGCO Subsidiary (iGO) in this table, however, the subsidiary is not a registrant of the AGCO. As a result, iGO has been removed from this year’s Annual Report. 

Table 13—Charitable lottery licences issued, renewed and amended

Note: The Social Gaming Licence is not issued under the charitable component of the Criminal Code. All wagers under this licence are paid out to winners and this is not a charitable fundraising opportunity.

Note: Charitable Gaming Eligibility was removed from this table. It is a required step within the broader Charitable Gaming licensing process, not a licence on its own. It’s inclusion in this table would result in a double count of licenses issued, renewed or amended.

Table 14—Cannabis licences and authorizations issued, renewed and amended

Table 15—Horse racing licences issued, renewed and amended

Table 16—Response to Public Notices—Alcohol and cannabis

Operations

The AGCO promotes compliance with relevant legislation, regulations and Registrar’s Standards to protect the public interest and align with government and ministry priorities. The AGCO undertakes a number of core regulatory activities which enable the agency to effectively fulfill its mandate in Ontario’s alcohol, lottery and gaming, horse racing, cannabis and internet gaming sectors.

The AGCO delivers regulatory services in a manner that is evidence-based, risk-based and outcomes-focused while being as efficient as possible. Compliance Services respond to and proactively address compliance concerns when and where they occur, taking a multi-sector approach to reach desired regulatory outcomes. In addition, the financial investigations team conduct due diligence in support of licensing and registration processes and financial investigations regarding allegations of fraud. These branches conduct regulatory compliance activities across all industries and sectors that the AGCO regulates, including delivery of education, inspections, compliance reviews, along with audits and financial investigations across these sectors.

The AGCO inspects, monitors and educates to ensure compliance with applicable laws and regulations. The AGCO’s compliance approach is risk-based and outcome-focused. Risk-based refers to the regulatory risks underlying the Standards, regulations, laws and requirements. A risk-based compliance approach focuses the greatest resources on mitigating the highest risk areas. Outcome-focused means emphasizing the results that regulated sectors are meant to achieve, rather than prescriptive activities that must be carried out.

The AGCO’s compliance approach emphasizes monitoring through a series of inspection activities, including unannounced inspections, responding to police reports and evaluating regulatory submissions and public complaints. The AGCO also conducts ongoing regulatory assurance activities, including regular audits, compliance reviews and mystery shopper visits. 

The Data Driven Compliance pilot application to better use data to inform and provide inspectors with intelligence of entities with the greatest likelihood of non-compliance activities in the liquor sector was launched in June 2022. The application allows the AGCO to strengthen the planning of high-impact compliance activities by providing Inspectors with the tools they need to focus on liquor licences that are anticipated to have the greatest likelihood of non-compliance. The application automates a significant portion of the research that Inspectors previously completed manually.

In the horse racing sector, the AGCO ensures compliance with the Rules of Racing by reviewing alleged rule infractions and having Race Officials present to officiate races. The AGCO supports the health and welfare of horses and horse racing participants by monitoring and enforcing the Equine Medication and Drug Control Program and ensuring an official veterinarian is in attendance to supervise live racing.

Partnerships

To support a coordinated approach to compliance activities, the AGCO’s compliance approach places significant emphasis on working with local community partners, including police, fire services, municipal by-law and public health units. In the liquor sector, this work also includes administering the Police Report and Last Drink Programs in partnership with the police.

Mystery Shopper Program

The use of mystery shoppers in the grocery sector continues to be an effective tool to aid in evaluating how grocery stores are performing in preventing youth access to alcohol. Throughout 2022–23, the AGCO expanded the Mystery Shopper Program to cover all liquor licensees operating within the province.

To adequately assess the sector’s ability to prevent youth access to cannabis products, the AGCO continues to use the Mystery Shopper Program to identify retailers who present an increased risk of permitting youth access. During this fiscal year, the AGCO enhanced the Mystery Shopper Program to support enhanced oversight of cannabis retailers operating close to high schools.

Educational activities

The AGCO proactively provides education to all sectors to increase their understanding of regulatory obligations and improve overall compliance. All new licensees or authorization holders in the liquor and cannabis sectors receive this education. In addition, any licensee or authorization holder can take advantage of these opportunities at any time throughout the life cycle of their licence.

Please note that all information in the following tables has been adjusted to align with the new methodology of categorizing inspections that was implemented in fiscal year 2021–2022.The category “Miscellaneous Compliance Activity” includes but is not limited to compliance activity driven by intelligence or investigation activity, the Mystery Shopper Program or criminal charges.

Table 17—Compliance Services inspections—Alcohol

Table 18—Compliance Services inspections—Lottery retailers

Table 19—Compliance Services inspections—Raffles

Table 20—Compliance Services inspections—Cannabis

Table 21—Cannabis private retail inspections

Table 22—Compliance Services inspections—Horse racing

Table 23—Rulings by Racing Officials

Technology regulation and igaming compliance

Ontario’s public confidence in gaming is supported by the AGCO’s delivery of a modern igaming compliance program that oversees all aspects of regulatory compliance in internet gaming. The agency ensures the technical integrity of gaming technology by developing minimum technical standards that products must comply with and by testing and providing approvals of games and related gaming systems against those standards. This technology is used throughout the province in all gaming industries and sectors regulated by the AGCO, including casino gaming, charitable and raffle gaming, and lotteries. However, for internet gaming, the AGCO has modernized the approach whereby the AGCO oversees the certification of internet gaming technology against the Registrar’s Standards for Internet Gaming by registered independent test labs rather than testing this technology inhouse and providing AGCO approvals.

The AGCO’s Gaming Lab is accredited to the international standard ISO 17025:2017 for testing laboratories, considered the international benchmark for excellence in testing laboratories. This achievement sets the AGCO apart as the only known gaming regulator with an in-house accredited gaming laboratory. This accreditation provides annual third-party assurance of the ongoing quality of the testing performed by the Gaming Lab.

In 2022–23, the Gaming Lab conducted its annual survey of regulated entities, reaching out to Operators to request their anonymous evaluation and feedback. Seven (7) Operators responded to the survey, with 100 percent of responses indicating the Gaming Lab does either an excellent or very good job of satisfying its mandate of providing expert technical services and approvals supporting the regulation of gaming technology in accordance with the principles of integrity and public interest. The Gaming Lab will conduct its annual survey in 2023–24 to gather valuable feedback from regulated Gaming Related Suppliers to enable it to continue to provide industry-leading services.

Table 24—Gaming Lab

iGaming Compliance

In 2022–23, the Technology Regulation and iGaming Compliance Branch successfully implemented a new internet gaming (igaming) compliance program to oversee all aspects of regulatory compliance of the igaming open market that launched in April 2022. This includes functionality to produce sector-level compliance information, analysis, plans and priorities to direct compliance teams; the delivery of high-quality, impartial and independent services that assess and certify gaming technology products for use in Ontario; and a full suite of modern and effective compliance assurance activities that address compliance priorities and provide reasonable assurance of compliance for regulated internet gaming entities and technology. These areas lead a low-burden, priority-driven compliance program in the internet gaming space.

Along with the development of the AGCO’s regulatory model for igaming, the priorities for igaming compliance in 2022–23 were:

• Responsible Advertising—oversight of potentially harmful public advertising and messaging. Ontario prohibits the broad, public advertising of bonuses, credits and other gambling inducements.
• Responsible Gambling—protection of players from experiencing harm from gambling.
• Sport and Event Betting—new line of business for Ontario that launched with iGO on April 4, 2022.
• Game Integrity—requiring certification of all games and critical gaming systems linked to determination of game outcome.

The Legal Services Division provides expert legal advice on licensee and registrant compliance within the regulatory framework. The Division’s experienced counsel represents the Registrar by negotiating settlements and appearing at hearings of appeals before the Licence Appeal Tribunal (LAT), the Horse Racing Appeal Panel (HRAP), the Divisional Court and the Court of Appeal.

Table 25—Notices of Proposal (NOPs) and Orders of Monetary Penalty (OMPs)—Alcohol

Table 26—Alcohol-related settlements without a hearing

Table 27—Notices of Proposed Order (NOPOs) or immediate suspensions—Horse racing

Table 28—Gaming-related settlements without a hearing

Modernization, transformation and integration

2022–23 saw the implementation of several important initiatives to drive the Bureau Excellence strategic priority. Bureau Excellence includes a new coaching and mentoring program for all new full-time Investigation and Enforcement Bureau (IEB) members, members on temporary assignments to IEB as well as members from outside police services coming into IEB as part of a joint forces operation. The program enables new members to become proficient in their chosen area of expertise in the Bureau through assignment of identified coaches and promotes a structured and firm foundation of understanding for new IEB members on all AGCO lines of business.

Eligibility and Major Investigations

The Enhanced Cannabis Application Pre-Screening Interviews continue to be essential in supporting the honesty and integrity of licensees, registrants and authorization holders and allow for immediate flagging of any criminal associations. In 2022, Eligibility and Major Investigations (EMI) conducted 641 cannabis-related investigations and noticed a significant decrease in the identification of problematic applications. This is attributed to the message being conveyed within the cannabis industry that the OPP was conducting thorough background investigations on applicants and entities.

In the igaming sector, IEB implemented EMI’s pre-screening igaming CEO interview questions to identify any possible risks associated with the AGCO registration of igaming entities. IEB continues to receive requests to conduct investigations on igaming service providers and suppliers. The igaming market continues to grow and evolve and many of the operators and suppliers are requesting amendments, hiring new personnel and applying for new licences.

The EMI igaming interview process continues to successfully identify problematic applicants. In some cases, this results in the withdrawal of applications by igaming applicants and entities.

Anti–money laundering

Anti–money laundering (AML) continues to be a key focus. IEB continues to proactively monitor, detect and deter money laundering from occurring within or related to legalized gaming activities in Ontario by continuing to:

1. lead and leverage the AGCO’s law enforcement and regulatory response to money laundering through sound processes and collaboration between all stakeholders to help protect the reputation of legalized gaming in Ontario, and
2. enhance training, investigative and analytical approaches, leveraging OPP and AGCO resources, partnerships and information sharing that emphasize the prevention, detection and reduction of potential money laundering activities in Ontario land-based gaming and igaming sites.

Anti–money laundering efforts are aligned with the Auditor General’s Value for Money Report which required IEB to gather evidence on the sources of funds for patrons identified with suspicious cash transactions, including conducting source-of-funds interviews, and updating the new data analytics system that was established to determine patrons’ risk ratings with all relevant data from all casinos.

A data-driven mindset is key to the IEB’s anti–money laundering approach. An analytical Suspicious Transaction Report (STR), dashboard tool that helps to identify and initiate investigations of individuals who pose risks of engaging in money laundering activities, has now been fully implemented. By automating the intake of all STRs generated at Ontario gaming sites, this tool has significantly reduced the number of manual processes. Thresholds and indicators are built within the dashboard to establish investigative priority and identify individuals, enabling IEB to allocate resources effectively and efficiently to determine if criminal investigations and/or regulatory recommendations are warranted. The STR analytical dashboard has over seven years of STR data from all gaming sites in the province of Ontario from 2016. An automated process has been implemented to obtain all future STRs from gaming sites on a monthly basis and working towards transitioning to weekly updates to the system in the future.

A STR/AML file assignment program called Significant Target Analysis Report (STAR) has been implemented across the province. This is a proactive police tool to identify High Priority Individuals (HPIs) for investigation. The analytical dashboard uses a catalog of tools to conduct a risk assessment on individuals based on Player Gaming Activity Reports obtained from the Ontario Lottery and Gaming Corporation (OLG), Police Risk Rating Scores, FINTRAC reports, police database searches and open-source searches.

The STAR approach proactively identifies HPIs that warrant investigations, which allows IEB to utilize resources effectively and efficiently. In addition, the STAR approach eliminates the administrative burden for frontline investigators and allows for more time to be spent on investigations. This is one of many enhanced strategies to reduce money laundering at land-based casinos in the province. In addition, IEB has developed a tracking system that allows for monitoring and automated follow-up capabilities of all STAR investigations assigned to ensure completion.

This proactive policing approach framework assists with intelligence-based decision making and next steps, such as recommendations for criminal or regulatory investigations, submissions for an AGCO Direction to Exclude, or providing cautions to OLG and its service provider partners.

Partnerships are key to the success of these AML programs. This year, a video was developed and implemented to raise awareness of AML investigative analytic processes among stakeholders, including the OLG, the OPP, the AGCO and FINTRAC. These partnerships were further supported by utilizing IEB’s AML Coordination Model, where dedicated OPP, OLG and AGCO analysts worked closely to query and analyze their respective agency’s data sets to openly share and discuss information and identify individuals and activities that pose AML risks.

Anti–human trafficking

The IEB Anti–Human Trafficking (AHT) Working Group collaborated with the OPP Anti–Human Trafficking Unit, Criminal Intelligence Service Ontario and municipal partners to proactively focus on AHT activities. The working group created a 2022 list of AHT police contacts from police jurisdictions across Ontario that house casinos and/or racetracks. The collaborative effort of this initiative allows investigators to quickly mobilize a multi-jurisdictional response to AHT investigations.

In October 2022, all IEB members received AHT training. Members of IEB have provided AHT training to service providers at all casino locations across the province. To date these IEB members have trained over 1,900 casino associates such as security, surveillance, and hotel staff. 

Table 29—Eligibility investigations

Table 30—Number of IEB investigations

Note: The launch of Ontario’s igaming market occurred on April 4, 2022, resulting in a significant increase in the number of Internet Gaming investigations that took place in 2022-23.

Table 31—Lottery-related investigations

Table 32—Occurrences at casinos and slot machine facilities

The AGCO’s strategic plan outlines the vision and strategic goals for the organization. The AGCO is currently in the fourth year of its five-year strategic plan.

The AGCO seeks to achieve its vision of being a world-class regulator that is innovative, proactive, inclusive and socially responsible through its three strategic goals: Modern Regulator, Service Excellence and People First.

Text version of strategic plan

Our Strategic Goals	Modern Regulator	Service Excellence	People First
Our Key Commitments	Serve the public interest through effective and innovative approaches to regulation in the alcohol, gaming, cannabis and horse racing sectors Make evidence-based decisions to regulate in the public interest Strengthen our organizational foundation to support the agency’s expanding priorities and business strategies	Continuously ensure a deep understanding of our stakeholders to anticipate and respond to their evolving needs Provide a positive experience through the delivery of services that are clear, timely and that meet the expectations of those we serve	Champion an inclusive workplace by implementing recommendations from the AGCO’s DI&A strategy to further develop employee’s wellbeing and best serve the people of Ontario Develop our talent to empower employees and nurture our internal talent succession pool

The AGCO measures performance and program effectiveness by setting targets, assessing data and evaluating results. Through continuous evaluation and feedback, the AGCO is able to achieve the key objectives identified in the AGCO strategic plan.

The results from these measures, shown in the table below, demonstrate that the AGCO has met or surpassed the majority of agency targets, largely thanks to:

• a continued focus on stakeholder engagement and an enhanced approach to stakeholder education;
• a modern regulatory approach that is risk-based, outcomes-based and compliance-focused;
• a hybrid work model that provides the tools and flexibility for a positive employee experience post-COVID;
• the development of a strategy to address diversity, inclusion and accessibility at the AGCO; and
• the continuous optimization of iAGCO.

The AGCO is committed to further developing an agency-wide performance strategy. The Business Optimization and Insights Branch is responsible for advancing multi-year goal setting, linking agency efforts to resource planning and developing a robust performance measurement framework to support transparency, accountability and regulatory effectiveness.

The accompanying financial statements of the Alcohol and Gaming Commission of Ontario have been prepared by management in accordance with the Canadian public sector accounting standards and, where appropriate, include amounts based on management’s best estimates and judgements. The financial statements have been properly prepared within reasonable limits of materiality and are based on information available up to August 9, 2023.

Management is responsible for the integrity of the financial statements and maintains a system of internal controls designed to provide reasonable assurance that the assets are safeguarded, and reliable financial information is available on a timely basis. The system includes formal policies and procedures and an organizational structure that provides for appropriate delegation of authority and segregation of responsibilities.

The Board of Directors ensures that management fulfills its responsibilities for financial information and internal control through a Financial, Audit and Risk Management (FARM) committee. The FARM committee meets with management and internal audit regularly to review the policies and procedures.

The financial statements have been examined by the Office of the Auditor General of Ontario. The Auditor General’s responsibility is to express an opinion on whether the financial statements are prepared in accordance with Canadian public sector accounting standards. The Independent Auditor’s Report, which appears on the following page, outlines the scope of the Auditor’s examination and opinion.

On behalf of Management:

To the Alcohol and Gaming Commission of Ontario  

Opinion

I have audited the financial statements of the Alcohol and Gaming Commission of Ontario (the AGCO), which comprise the statement of financial position as at March 31, 2023, and the statements of operations and accumulated deficit, change in net debt and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the AGCO as at March 31, 2023, and the results of its operations, changes in its net debt and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the AGCO in accordance with the ethical requirements that are relevant to my audit of the financial statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the AGCO’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the AGCO either intends to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the AGCO’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the AGCO’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the AGCO’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the AGCO to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Bonnie Lysyk, MBA, FCPA, FCA, LPA Auditor General

Toronto, Ontario August 9, 2023

Download a PDF version of this document

Box 105, 15th Floor 20 Dundas Street West Toronto, Ontario M5G 2C2 416-327-2381 fax 416-326-3812

www.auditor.on.ca

Statement of Financial Position ($’000) 

See accompanying notes to the financial statements.

On Behalf of the Board:

Statement of Operations and Accumulated Deficit ($’000)

See accompanying notes to the financial statements. 

Statement of Change in Net Debt ($’000)

 See accompanying notes to the financial statements.

Statement of Cash Flows ($’000)

 See accompanying notes to the financial statements.

Notes to the Financial Statements For the Year Ended March 31, 2023 ($’000)

1. Nature of operations

The Alcohol and Gaming Commission of Ontario (AGCO) is a regulatory board-governed agency incorporated without share capital, that reports to the Ministry of the Attorney General (MAG). The agency was established on February 23, 1998 under the Alcohol and Gaming Regulation and Public Protection Act, 1996, which was amended in 2018 and re-named the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 (ACGRPPA). On November 29, 2021, the ACGRPPA was repealed and the Alcohol and Gaming Commission of Ontario Act, 2019 (AGCO Act) was proclaimed into force, continuing the AGCO under a new statute.

The AGCO is responsible for regulating the alcohol, gaming, horse racing and cannabis retail sectors in accordance with the principles of honesty and integrity, and in the public interest. In so doing, the AGCO administers the Liquor Licence and Control Act, 2019, the Gaming Control Act, 1992, the Horse Racing Licence Act, 2015 and the Cannabis Licence Act, 2018. The AGCO also administers the charity lottery licensing Order-in-Council 208/2024.

iGaming Ontario was established on July 6, 2021 as a subsidiary corporation of the AGCO. See Note 14 for further disclosure pertaining to the AGCO’s relationship with iGaming Ontario.

As a regulatory agency with a governing board reporting to MAG, the AGCO receives its annual spending authority from the Ministry’s printed estimates, as approved by the Ontario Legislature. The AGCO is funded from a combination of revenue from the Consolidated Revenue Fund and charges to the regulated sectors (fees and cost recoveries).

Pursuant to the Income Tax Act, the AGCO is exempt from income taxes.

2. Significant accounting policies

1. Basis of accounting
   These financial statements have been prepared in accordance with PSAS established by the Canadian Public Sector Accounting Board. The significant accounting policies used to prepare these statements are summarized below.
    
2. Currency
   The financial statements are presented in Canadian dollars.
    
   At the transaction date, revenue or expenditures in currencies other than the AGCO’s functional currency are recognized in Canadian dollars at the exchange rate in effect at that date. The AGCO is not impacted by the remeasurement gains and losses caused by foreign currency, because its cash, including foreign exchange rates, is handled by the Ministry of Public and Business Service Delivery (formerly known as the Ministry of Government and Consumer Services) without charge.
    
3. Revenue recognition
   Fee revenue from licences, registrations and permits collected from the liquor, lottery, gaming, horse racing and cannabis-retail sectors are recorded in the fiscal year to which they pertain. For the term of licences beyond the current fiscal year, the AGCO records deferred licence revenue as a liability and recognizes revenue over the term of licences.
    
   The AGCO is authorized to recover costs of its regulatory activities in accordance with the Alcohol and Gaming Commission of Ontario Act, 2019 (AGCO Act). The AGCO records a deposit liability (included in Security and Customer Deposits) when amounts are received. Recoveries are recognized as revenue (included in Recoveries - Gaming Sector) as the related regulatory costs are incurred, which settles the deposit liability. Currently, costs for regulatory activities are only being recovered from the gaming sector.
    
   Other revenue includes recovery of prior year’s expenditures and awarded costs from court received in the fiscal year.
    
4. Expenditures recognition
   Expenditures are recognized on an accrual basis. Expenditures are recognized in the fiscal year that the events giving rise to the expense occur and resources are consumed.
    
5. Financial instruments
   All financial instruments are included on the Statement of Financial Position and are measured initially at fair value and subsequently at cost.
    
6. Tangible capital assets
   Tangible capital assets are recorded at cost, which includes amounts that are directly related to the acquisition, design, construction, development, improvement or betterment of the assets.
    
   The cost of tangible assets is amortized on a straight-line basis over estimated useful lives as follows:
    

   Useful life
   Business application software	10 years
   Information technology hardwarde	3–6 years

   Assets under construction are not amortized until construction is complete and the assets are ready for their intended use.
    

7. Use of estimates
   In preparing the financial statements, management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.
    
   Items requiring the use of significant estimates include: useful life of capital assets and other employee future benefits.
    
   Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available. Measurement uncertainty exists in these financial statements. Actual results could differ from these estimates.
    
8. Future changes in accounting standards
   
   1. PS 3400 - Revenue
      The new standard provides a framework for recognizing revenue by distinguishing between revenue arising from transactions that include performance obligations, referred to as exchange transactions, and those that do not have performance obligations, referred to as non-exchange transactions. While the impact of any changes on the AGCO’s financial statements is not reasonably determinable at this time, the AGCO intends to implement the standard effective April 1, 2023, for the fiscal year 2023-24.

3. Accounts payable and accrued liabilities

Accounts payable relate largely to normal business transactions with third-party vendors and subject to standard provincial government payment terms.

Operational expenses accruals relate to goods or services received but that have not been paid, including regular salaries and wages, employee benefits and normal operating expenses.

Accrued other employee benefits include employee vacation credits accruals and salary continuance arrangements.

4. Deferred licence revenue

Deferred licence revenue represents payments received for licences with terms that extend beyond the current operating cycle. Changes in the deferred licence revenue balances during the current fiscal year are summarized as follows:

5. Employee future benefits

1. Pension costs
   Certain employees of the AGCO participate in the Public Service Pension Plan (PSPP) and the Ontario Public Service Employees Union Pension Plan (OPSEUPP), which are defined benefit pension plans for employees of the Province and many provincial agencies. The Province of Ontario is the sole sponsor of the PSPP and a joint sponsor of the OPSEUPP with the Ontario Public Service Employees Union (OPSEU). The sponsors of these plans determine the AGCO’s annual payments to the respective plans. The AGCO’s responsibilities with regard to the PSPP and the OPSEUPP are limited to its contributions. Payments made to the plans are recognized as an expenditure when employees have rendered the service entitling them to the contributions. The AGCO’s required annual contribution of $5,613 (2022 – $5,012), is included in Employee Benefits in the Statement of Operations and Accumulated Deficit.
    
2. Other employee future benefits
   The obligations of separation, long-term income protection (LTIP) pension contributions, and time banking entitlements earned by eligible employees are included in Other Employee Future Benefits in the Statement of Financial Position.

   	2023	2022
   Separation entitlements	$              4,507	$              4,778
   LTIP pension contributions	2,493	1,633
   Time bank entitlements	876	834
   	$              7,876	$              7,245

    

   1. Separation entitlements
      Employees hired prior to April 1, 2015 and who have completed at least five (5) years of continuous service as a permanent full-time employee with the AGCO as of April 1, 2015, will be eligible for a separation payment equivalent to one week’s base pay for each year of active service up to a maximum of sixteen (16) weeks upon retirement, resignation, or death.
       
      Employees hired prior to April 1, 2015 and who had not completed five (5) years of continuous service as a permanent full-time employee as of April 1, 2015, will only be eligible for a separation payment in the event of retirement, resignation, or death if they have completed at least ten (10) years of continuous service as a permanent full-time employee as of the date of their retirement, resignation, or death. An employee who meets these requirements will be entitled to separation payment equivalent to one week’s base pay for each year of active service up to a maximum of sixteen (16) weeks upon retirement, resignation, or death.
       
      The separation entitlements were calculated using a discount rate of 3.64% (2022 - 3.19%) and expected average remaining service life of 13 years (2022 - 13 years). The estimated annual increase in salaries used in the calculation ranged from 1% to 1.5% (2022 – 1%).
       
      For the year ended March 31, 2023, these costs amounted to $372 (2022 - $469) and included in employee benefits in the Statement of Operations and Accumulated Deficit.
       
   2. LTIP pension contributions
      As required by the PSPP and the OPSEUPP, the AGCO makes the regular employer contributions and the members’ contributions to the pension plans for periods when members are eligible for or receive LTIP benefits.
       
      The cost of living adjustment of pension contributions was determined by the pension boards, 6.3% starting January 2023 (2022 - 2.4%). Each LTIP arrangement was evaluated individually, based on term and the corresponding discount rate using weighted average rate from Ontario bond yield curve rates.
       
      For the year ended March 31, 2023, these costs amounted to $1,271 (2022 - $506) and included in employee benefits in the Statement of Operations and Accumulated Deficit.
       
   3. Time bank entitlements
      Eligible AGCO employees can bank up to 10 vacation days at the end of each calendar year into the “Time Bank”, with a cap of 125 days in total. These time bank days can only be used when employees leave the organization as time off or a lump sum pay.
       
      The time bank entitlements were calculated using a discount rate of 3.64% (2022 - 3.10%) and expected average remaining service life of 10 years (2022 - 10 years). The estimated annual increase in salary ranges used in the calculation was 1.5% (2022 - 1%).
3. Non-pension post-employment benefits
   The costs of non-pension benefits for eligible pensioners are paid by the Province of Ontario and are not included in these financial statements.

6. Security and customer deposits

These deposits are established under the AGCO Act, which allows the AGCO to establish fees and other charges in administering the acts in Note 1. The nature of these deposits are as follows:

• OLG and land-based casino deposits: Under Subsection 12 (1) of the AGCO Act, the AGCO may direct the Ontario Lottery and Gaming Corporation (OLG) to pay money to the AGCO. These deposits relate to the OLG’s lottery, land-based casino gaming, internet gaming and charitable gaming lines of businesses.
• Order of monetary penalties (OMP): Under Subsection 12 (2) of the AGCO Act, monetary penalties serve as an administrative action to promote regulatory compliance for all entities the AGCO regulates in the alcohol, gaming, horse racing and cannabis retail sectors and can be only used for education, training, and awareness purposes.
• Gaming eligibility assessment deposits: Under Section 9 of the Gaming Control Act, all applicants/registrants are required to pay the reasonable costs of an inquiry or investigation related to gaming registrations under the Act.
• Regulatory activity deposits - internet gaming: Under Section 12.1 of the AGCO Act, the AGCO is permitted to direct iGaming Ontario to pay money to the AGCO. These deposits relate to the internet gaming line of business.

7. Accounts receivable

Accounts receivable relate to fees, licences and registrations revenue for outstanding payments from horse racing operators, and OMP due to appeal periods.

8. Tangible capital assets

9. Revenue

10. Related party transactions

The Province of Ontario is a related party as it is the controlling entity of the AGCO. Organizations that are commonly controlled by the Province of Ontario are also related parties of the AGCO. Transactions with related parties are outlined below, except for transactions with the AGCO’s subsidiary, iGaming Ontario, which are outlined in Note 14.

All related party transactions were measured at the exchange amount, which is the amount of consideration established and agreed upon by the related parties.

1. Ministries of the Province of Ontario
   During the course of the year, the AGCO entered into the following transactions with various Ministries of the Province of Ontario:
   1. The AGCO has statutory authority to carry out specific types of investigations, inspections and other similar activities in accordance with the Acts and regulations that it administers. The AGCO covers the costs for dedicated Ontario Provincial Police (OPP) officers within its Investigation and Enforcement Bureau to perform these activities. A Memorandum of Understanding between the AGCO and OPP establishes that the AGCO is responsible for funding the salaries, wages, expenses and administrative support costs for these OPP officers. For the year ended March 31, 2023, the AGCO was charged $16,877 (2022 - $15,126) by the Ministry of the Solicitor General for these costs and is included in Salaries and Wages, Employee Benefits and Services in the Statement of Operations and Accumulated Deficit.
   2. The Ministry of Public and Business Service Delivery (MPBSD, formerly known as the Ministry of Government and Consumer Services) provides the AGCO with network, telecommunication and administrative services. For the year ended March 31, 2023, the AGCO was charged $1,347 (2022 - $1,382) by MPBSD for these costs and are included in Transportation and Communication, Services in the Statement of Operations and Accumulated Deficit. MPBSD also provides the AGCO with other services such as accounting, tax remittance and cash management without charge.
   3. The Ministry of Transportation supplies the AGCO with leased vehicles that are used by employees to perform their duties. For the year ended March 31, 2023, the AGCO was charged $848 (2022 - $667) for this cost and is included in Services in the Statement of Operations and Accumulated Deficit.
   4. For the year ended March 31, 2023, MAG charged the AGCO $315 (2022 - $351) for legal services, horse racing regulatory costs, Workplace Safety Insurance Board charges and other administrative services and is included in Salaries and Wages, Employee Benefits and Services in the Statement of Operations and Accumulated Deficit.
   5. MAG provides the AGCO with leased office space at 2 (2022 – 6) locations across the province. The costs of the leases are paid by MAG out of their voted appropriation. For the year ended March 31, 2023, the costs of rental were $3,893 (2022 - $4,354).
2. Ontario Racing Management Inc. (ORM)
   For the year ended March 31, 2023, the AGCO paid ORM $112 (2022 - $114) for the rental of one office location. The space use licence agreement commenced on August 1, 2016 and shall expire on July 31, 2026, unless sooner terminated in accordance with this agreement. The AGCO acknowledges that ORM is subject to the terms of the Prime Lease with Pearson Corporate Centre GP Inc.
    
3. Ontario Lottery and Gaming Corporation (OLG)
   The AGCO recovers costs from OLG related to the regulation of OLG’s lotteries, internet gaming (iGaming), charitable gaming (cGaming) and OLG land-based casino(s). For the year ended March 31, 2023, the AGCO received $7,717 (2022 - $17,635) of which $9,344 (2022 - $12,447) was recognized to offset regulatory costs incurred during the year. The remaining amounts are recorded as deposits included in Security and Customer Deposits in the Statement of Financial Position until future costs are incurred.

11. AGCO Board of Directors’ remuneration

The AGCO’s Board of Directors are appointed through an Order in Council by the Lieutenant Governor in Council. Total remuneration paid to the Board of Directors during the year was
$122 (2022 - $136).

12. Financial instruments risks

1. Interest rate risk
   Interest rate risk is the risk the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates. The AGCO is subject to interest rate risk on its other employee future benefits liability. The discount rates used in future cash flows for other employee future benefits are based on Ontario bond yield curve depending on employee expected average remaining service life or the term of the future cash flows.
    
2. Credit risk
   Credit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. The AGCO’s exposure to credit risk is minimal as the majority of the receivables are from the Province of Ontario and iGaming Ontario (a related party under common control by the Province of Ontario).
    
3. Currency risk
   The AGCO’s exposure to currency risk is minimal as few transactions are in currencies other than Canadian dollars.
    
4. Liquidity risk
   The AGCO’s exposure to liquidity risk is minimal as the AGCO may recover its costs through revenue and recoveries from entities that form part of the regulated sectors. As well any deficiency of revenue over expenses is absorbed by the Province and is reflected in the Due from the Province on the Statement of Financial Position.

13. Due from the Province

Due from the Province represents the difference between cash receipts submitted to the Province by the AGCO and the AGCO’s expenses paid. Should the AGCO incur a deficit in any fiscal year, the deficit is covered by the Province and is reflected in Contribution by the Province in the Statement of Operations and Accumulated Deficit.

Cash received by the AGCO is deposited directly into the Consolidated Revenue Fund (CRF). The AGCO’s invoices are paid by the Province’s CRF on behalf of the AGCO and booked against the AGCO’s budget. Goods and Services provided by other ministries in Note 10 are treated as inter-ministry chargebacks and included in Due from the Province.

14. iGaming Ontario

Nature of Relationship

iGaming Ontario was created on July 6, 2021 by Ontario Regulation 517/21 under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 and continued by Ontario Regulation 722/21 under the Alcohol and Gaming Commission of Ontario Act, 2019. iGaming Ontario is responsible to conduct and manage internet gaming offered through private gaming operators.

In addition to its regulatory responsibilities over the internet gaming market, the AGCO is responsible to oversee iGaming Ontario’s conduct and management of internet gaming, which includes recommending appointments to the board of iGaming Ontario to the Attorney General. The Attorney General is responsible for appointing board members to iGaming Ontario based on these recommendations. The Minister of Finance determines the timing of any cash remittances from iGaming Ontario to the Province of Ontario. As a result, the financial results of iGaming Ontario are not consolidated into these financial statements as iGaming Ontario is controlled by the Province of Ontario and is consolidated into the Province’s financial statements.

Shared Resources Agreement

For the year ended March 31, 2023, the AGCO and iGaming Ontario entered into a Shared Resources Agreement (SRA). Through the SRA, the AGCO provides iGaming Ontario with human resources, payroll, procurement, facilities, customer services, communication and information technology services on a cost recovery basis. The AGCO also directly paid expenditures (including salaries and benefits of iGaming Ontario employees and vendor invoices) to support the establishment of iGaming Ontario. The associated recovery of these costs, exclusive of HST, is reflected in Recoveries – iGaming Ontario in the Statement of Operations and Accumulated Surplus and amounts to $9,474 (2022 - $7,264). As at March 31, 2023, the balance of $2,703 (2022 - $7,884) is outstanding and is included in Due from iGaming Ontario in the Statement of Financial Position.

Recovery of Costs - iGaming Ontario’s Internet Gaming Market

Under Section 12.1 of the AGCO Act, the AGCO is permitted to direct payment from iGaming Ontario. The operator agreements between iGaming Ontario and igaming operators establish that igaming operators are responsible for costs charged by the AGCO in regulating the internet gaming market, regardless of whether the costs are initially billed to iGaming Ontario by the AGCO or billed directly to the igaming operator. The AGCO billed and collected payments from the igaming operators directly. For the year ended March 31, 2023, the AGCO received $4,254 (2022 - $nil) from igaming operators, of which $3,690 (2022 - $nil) was recognized to offset regulatory costs incurred during the year. The remaining amount, $564 (2022 - $nil), is recorded as a deposit included in Security and Customer Deposits in the Statement of Financial Position until future costs are incurred.

15. Other Matters

A number of unions challenged the legality of Protecting a Sustainable Public Sector for Future Generations Act, 2019 (the Act or Bill 124), which limited public sector wage increases to 1% per year for a three-year moderation period. The Superior Court of Justice, in a decision issued November 29, 2022, held that the Act violated the applicants’ right to freedom of association under section 2(d) of the Canadian Charter of Rights and Freedoms by interfering with collective bargaining rights. As a result, it was declared to be “void and of no effect”. The Ontario government has appealed the Superior Court’s decision.

The AGCO, alongside the OPS and several other agencies, agreed to a wage reopener for bargaining unit employees in the event that Bill 124 was struck down by a court of competent jurisdiction. The court’s decision in late 2022 has activated the wage reopener and the AGCO is currently engaged in talks with the union. The likelihood, timing or extent of any potential liability is uncertain at this time.

16. Comparative Figures

Certain comparative figures have been reclassified to conform to the financial statement presentation adopted for the current year.

HRAP members are appointed by the AGCO Board of Directors based on experience and qualifications and through a competitive, merit-based process. There is broad representation from the various sectors of the industry on the Panel, with various members possessing a background or experience in law, veterinary medicine and pharmacology, governance and administrative justice.

Throughout 2022-23, hearings continued to be offered through an electronic format. These hearings are accessible through a secure Zoom platform and facilitated by the HRAP Secretariat. Virtual training is available through the Secretariat to all participants in the electronic hearing process.

This year was the first one since 2020 wherein no racing dates were lost due to COVID-19 mitigation measures.

The HRAP received a total of fifty-four (54) Notices of Appeal and heard a total of forty-seven (47) virtual hearings (and one (1) in-person on an accommodation basis) with seventeen (17) additional matters, totaling sixty-four (64) electronic hearings for the fiscal year. This number does not include contested Motions or pre-hearing conferences. In doing so, the HRAP continued to operate without any backlog of cases. In the “A” hearings stream, which are usually complex cases with significant consequences, regular pre-hearing conferences have helped shorten the hearing process. The type “B” hearings are the less complex cases and the average filing time from appeal to hearing for this fiscal year was 67 days (down from 96 days in 2019–20). 

Table 37 - Notices of Appeal 

Table 38 - Appeals by type of infraction 

Table 39 - Motions

Table 40 - Hearings