More than 15 years ago, the Ontario government implemented a model that transformed the delivery of public services for consumer protection and public safety. It is a proven and continuing success that could be emulated in other areas and jurisdictions.
Delegated Administrative Authorities, or DAAs – a groundbreaking notion when first introduced in 1996 – are self-financing, not-for-profit corporations with delegated responsibility for administering several regulatory programs in Ontario.
The DAA model gives these arm’s-length corporations the day-to-day responsibility for regulating specific sectors in the marketplace, keeping them free from abuses, and informing and protecting consumers.
Who, for example, knows better than the Ontario Motor Vehicle Industry Council (OMVIC) how to protect consumers from unscrupulous car dealers and curbsiders who often prey on an unwary public? OMVIC is the DAA that regulates the province’s 8,800 motor vehicle dealers and salespersons and enforces registration requirements.
And who is in a better position than the Real Estate Council of Ontario (RECO) to provide guidance and expertise to homebuyers and sellers when they are facing one of the biggest financial transactions of their lives? RECO is the DAA that oversees the province’s real estate market and registers more than 62,000 real estate agents and brokers.
It’s important to note that while DAAs assume responsibility for all aspects of day-to-day decision making and regulatory service delivery, the Ontario government, through the Ministry of Consumer Services, has overall accountability and control of relevant enabling legislation and monitors and remains accountable for the overall performance of each authority.
When DAAs were first conceived, many governments were seeking ways to reduce red tape and improve efficiencies.
Ontario introduced enabling legislation that allowed it to delegate powers and duties to a DAA to administer specific statutes. To test the model, it chose mature industries that already demonstrated a collaborative relationship with government and had a solid track record of addressing public concerns.
A team was built with government as lead on policy development and regulation, and the DAA as implementer and industry regulator. Over time, the model has expanded to different sectors in Ontario, as well as different jurisdictions in Canada. The British Columbia Safety Authority and the Real Estate Council of Alberta are two examples of how the DAA model has been adopted across the country.
The model has also been supported by several independent reviews. Most recently the Drummond Commission (the Commission on the Reform of Ontario’s Public Services) recommended the expansion of DAAs as a way to decrease the size and cost of government.
As the model evolves, Ontario continues to refine its standards and protocols for managing its DAA relationships so that everyone benefits.
DAAs reduce the government’s footprint. Their employees are not public servants and they are self-financed: the regulatory services they provide are funded by fees paid by the industries they regulate.
Our existing DAAs improve regulatory outcomes. They have achieved significant gains, including increases in enforcement activities. For example, between 1996 and 2010, real estate brokerage inspections in the province increased by 86 percent and travel agency/wholesaler inspections increased by 87 percent.
DAAs have also improved safety outcomes. For example, the Electrical Safety Authority has contributed to a reduction in the rate of electrocutions in Ontario.
DAAs assume all operational and statutory decision-making responsibility for licensing, education, complaints handling, inspection and enforcement. They are well-positioned to make efficient risk-based decisions on how they allocate resources.
The Ministry of Consumer Services uses several accountability mechanisms, including administrative agreements, business plans and regular reports on performance to ensure that delegated duties are being carried out in the public interest.
The administrative agreement is at the centre of the governance structure between the ministry and the DAAs. Each agreement sets out accountabilities, expectations and administrative arrangements.
Both the ministry and the DAAs take the oversight function seriously and strive to improve relationships, which is fundamental in making the model work for the government, industry and the public.
Of all the stated benefits of a DAA model, perhaps the two most valuable are increased industry engagement and the resolution of consumer concerns. With the ministry’s mandate to help Ontario consumers make smart, safe choices in the marketplace, this is of vital importance.
Industry is heard when they participate on DAA boards and advisory committees. And consumers are informed and protected and their inquiries or complaints about their purchases of products or services are addressed.
Our flexible model supports industry competitiveness while protecting the public interest through focused expertise. It can be tailored to meet the needs of a specific sector. It is more nimble and efficient than similar operations in government. It reduces regulatory red tape. It strengthens partnerships and understanding of industry without being beholden to it. And it ensures the alignment of interests, objectives and effective collaboration.
Giles Gherson is deputy minister of the Ontario Ministry of Consumer Services.
Ontario’s 8 administrative authorities
Six authorities regulate specific sectors
MOTOR VEHICLE SALES:
Ontario Motor Vehicle Industry Council of Ontario (OMVIC)
Motor Vehicle Dealers Act, 2002
Travel Industry Council of Ontario (TICO)
Travel Industry Act, 2002
Real Estate Council of Ontario (RECO)
Real Estate and Business Brokers Act, 2002
NEW HOME WARRANTIES (including new condos):
Tarion Warranty Corporation
Ontario New Home Warranties Plan Act, 1990
Board of Funeral Services
Funeral, Burial and Cremation Services Act, 2002
Vintners Quality Alliance Ontario
Vintners Quality Alliance Act, 1999
Two authorities deal with public safety
TECHNICAL SAFETY (amusement park rides, elevators, boilers, fuel safety, stuffed/upholstered items):
Technical Standards and Safety Authority
Technical Standards and Safety Act, 2000
ELECTRICAL SAFETY (electrical product safety; licenses contractors; electrical distribution safety, Ontario Electrical Safety Code):
Electrical Safety Authority
Electricity Act, 1998, Part VIII