Compliance and enforcement processes

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Compliance process

Compliance objectives

As part of its compliance policy, the Board: (a) monitors whether regulated companies adhere to their statutory and regulatory obligations; (b) works cooperatively with regulated companies to ensure they understand their obligations; (c) investigates allegations of non-compliance; and (d) undertakes enforcement action where appropriate.

Board staff also strive to: (a) provide information and guidance to regulated companies about statutory and regulatory obligations; (b) identify and report emerging policy issues to the Board; and (c) recommend amendments to regulatory requirements where appropriate.

“Compliance” concerns the subject-matters discussed in this policy and does not include “Enforcement”. “Enforcement” is addressed in the Board’s Enforcement Policy. Learn more about the Board’s Enforcement Process.

A “regulated company”, as referred to in the Compliance Process, means a person required to have a licence under ss. 48 or 57 of the Ontario Energy Board Act, 1998 (“Act”); a gas distributor, gas transmitter or gas storage company.

A “statutory and regulatory obligation” means an “enforceable provision” as defined in s. 3 of the Act and includes, among other things, a provision of the Act or the regulations, a provision of Part II or Part III of the Energy Consumer Protection Act, 2010 or the regulations made under it, a provision of the Ontario Clean Energy Benefit Act, 2010 or the regulations made under it, certain sections of the Electricity Act, 1998, conditions of a licence, a provision of an Order of the Board, or a provision of an assurance of voluntary compliance that is given to the Board.

An overview of the compliance process

Issues brought to the Board’s attention proceed through an initial fact-finding, review, and assessment process. At the initial stage, Board staff may seek further information from regulated companies in order to clarify and understand the issues or positions of affected parties. This information may be sought on a voluntary basis or compelled by an inspector pursuant to specific powers provided in Part VII of the Act. If an inspector requests information under the Act, the Board opens a formal compliance file and informs the affected person.

Flowchart - Compliance and Enforcement Process (pdf)

Inspectors and inspections

Section 106 of the Act provides that the Board’s management committee may appoint persons to exercise and perform the powers and duties of an inspector. Inspectors may include Board staff. Section 107 provides that inspectors are authorized to require licensees, gas utilities and their affiliates to provide documents, records or information. Section 108 provides inspectors specific powers of entry and inspection without a warrant or court order.

All information gathered by Board staff, whether compelled by an inspector under s. 107 or provided voluntarily, may be used in enforcement proceedings. 

Methods of proceeding

Matters may be resolved in any of the following ways:

  • Informal Resolution. Most matters are resolved informally between parties and Board staff. This may involve staff assistance in interpreting regulatory requirements, informal mediation, or other voluntary measures. 
     
  • Escalated Consumer Complaint. The Board has established processes for handling consumer complaints. Issues that are not resolved in the normal complaint handling process are reviewed by Board staff. These cases may result in the opening of a formal compliance file. 
     
  • Assurance of Voluntary Compliance. Section 112.7 of the Act provides that a person may give the Board a written assurance of voluntary compliance, which has the same force and effect as an order of the Board. Board staff may seek the Board’s approval for such an assurance of voluntary compliance. 
     
  • Recommendation for a Policy Review. An issue may be referred to the Board where it is necessary to clarify an existing policy or to develop a new policy relating to applicable regulatory requirements. 
     
  • Recommendation for Enforcement. Where there is a potential issue of non-compliance, Board staff may recommend enforcement action pursuant to Part VII.1 of the Act.

“Enforcement” matters are those in respect of which Board staff recommend to the Board the issuance of a Notice of Intention to Make an Order under ss. 112.3, 112.4 or 112.5 of the Act.
 

Enforcement process

An “enforceable provision” is defined in s. 3 of the Act and includes, among other things, a provision of the Act or the regulations, a provision of Part II or Part III of the Energy Consumer Protection Act, 2010, or the regulations made under it, a provision of the Ontario Clean Energy Benefit Act, 2010 or the regulations made under it (the Ontario Clean Energy Benefit ended on December 31, 2015), certain sections of the Electricity Act, 1998, conditions of a licence, a provision of an Order of the Board, or a provision of an assurance of voluntary compliance that is given to the Board.

A “regulated company”, in the context of the enforcement process, means a person required to have a licence under ss. 48 or 57 of the Act; a gas distributor, gas transmitter or gas storage company or an affiliate thereof; or an affiliate of a person required to have a licence under ss. 57 (a) or (b).

Enforcement objectives

The objective of the enforcement process is to hold accountable persons who breach their statutory or regulatory duties and to deter other instances of non-compliance by that licensee or others who are engaged in similar activity.

Overview of the enforcement process

Part VII.1 of the Act establishes the Board’s enforcement authority. Enforcement may be pursued for non-compliance with a statutory or regulatory requirement. Learn more about the Board’s Compliance Process.

Where Board staff intend to recommend that a matter be referred to the Board for possible enforcement action the affected person is so notified.

The compliance file will be reviewed in order to decide whether:

  1. to recommend that a Notice be issued (see below); 
  2. to refer the matter back to Board staff to seek additional information; or 
  3. to not proceed with the matter.

Flowchart - Compliance and Enforcement Process (pdf)

Seeking a notice

Board staff may recommend that the Board issue a Notice of Intention to Make an Order (a “Notice”) under ss. 112.3, 112.4 or 112.5 of the Act. The Board has discretion whether to issue a Notice. A Notice is a public document.

A Notice will set out the reasons for the proposed order and the applicable section of the Act under which the Board intends to proceed. It will also advise that, if the person wishes to require the Board to hold a hearing, the person must notify the Board within 15 days of receiving the Notice.

Notice of intention to make a compliance order (s. 112.3)

If the Board is satisfied that a person has contravened, or is likely to contravene, an enforceable provision (as defined in s. 3 of the Act), the Board may make an order requiring the person to comply with the enforceable provision and to take such action as the Board may specify to remedy or prevent a contravention or a further contravention.

Notice of intention to make an order for suspension or revocation of licence (s. 112.4)

Where the Board is satisfied that a person who holds a licence has contravened an enforceable provision, the Board may make an order suspending or revoking the person’s licence. In deciding whether to suspend or revoke a licence, the Board will review the totality of the circumstances, including (but not limited to) the seriousness of the contravention and any past contraventions, the likelihood of recurrence, whether the contravention has harmed the industry as a whole, and whether an administrative penalty would be sufficient.

Notice of intention to make an order for an administrative penalty (s. 112.5)

Where the Board is satisfied that a person has contravened an enforceable provision, the Board may make an order for payment of an administrative penalty for each day or part of a day on which the contravention occurred or continues. Any such order must be made within 2 years after the later of the day the contravention occurred and the day on which the evidence of the contravention first came to the attention of the Board.

Amount of penalty

The Board may impose an administrative penalty of up to $1,000,000 for each day or part of a day on which the contravention occurred or continues. However, the administrative penalty cannot be more than the maximum fine that would be applicable under s. 126 of the Act had a proceeding been commenced under that section in relation to the contravention.

In addition, the Board can increase the administrative penalty by an amount equal to the monetary benefit that was acquired by, or that accrued to, the person as a result of the contravention.

Ontario Regulation 51/16 (Administrative Penalties), made pursuant to the Act, identifies the following as criteria that must be considered by the Board in determining the appropriate amount of an administrative penalty for a contravention of an enforceable provision:

In selecting the appropriate administrative penalty, the Board must consider the following criteria:

  1. The extent to which the contravention deviates from the requirements of the enforceable provision;
  2. The extent to which the contravention has the potential to adversely affect consumers, persons licensed under the Act or other persons;
  3. The extent to which adverse effects of the contravention have been mitigated by the person who committed the contravention;
  4. Whether the person who committed the contravention has previously contravened any enforceable provision; and
  5. Whether the person who committed the contravention derived any monetary benefit from the contravention.

The Board may also consider any other criteria that it considers relevant.

Ontario Regulation 51/16 also states that an administrative penalty cannot, by its magnitude, be punitive under the circumstances.. 

Methods of proceeding

No hearing requested

A person who receives a Notice may choose to admit the alleged particulars of non-compliance and file submissions with the Board with respect to penalty only. The Board will consider the submissions and make an order.

A person may also choose to give the Board a written assurance of voluntary compliance (as provided by s. 112.7 of the Act) and file with the Board submissions with respect to penalty. A person may give the Board a written assurance of voluntary compliance: (a) to refrain from contravening an enforceable provision specified in the assurance; (b) to take such action as is specified in the assurance to remedy a contravention of an enforceable provision; or (c) to take such action as is specified in the assurance to prevent a contravention of an enforceable provision. A written assurance of voluntary compliance has the same force and effect as an order of the Board.

Hearing requested

a. Notice of hearing
A person who receives a Notice may, within 15 days, give notice to the Board requiring the Board to hold a hearing. Where a hearing is required, the Board will issue a Notice of Hearing, which will generally set out, among other things, the particulars of the alleged contraventions and the penalty which may be imposed.

b. Other steps in hearing process
A person who has requested a hearing has the right to appear at the hearing before the Board, make submissions, cross-examine witnesses, and present evidence.

The Board has special rules that apply to the conduct of enforcement hearings. Refer to the Board's Rules of Practice and Procedure for Enforcement Proceedings.

c. Consequences of failing to attend the hearing
The Board may proceed with a hearing in a party’s absence and, if appropriate, impose penalties against such a person.