Vision

A world-class regulator that is innovative, proactive, inclusive and socially responsible.

Mandate

To regulate in accordance with the principles of honesty and integrity, and in the public interest.

Mission

The AGCO commits to conducting business in a manner that will:

• develop, implement and enforce fair policies and procedures
• establish a framework of critical regulatory controls in the public interest that are sensitive to the economic viability of the alcohol, gaming, horse racing and cannabis industries and sectors
• be client focused in the way we respond to and manage client and stakeholder needs
• educate clients and stakeholders and develop partnerships
• create a supportive work environment that respects and values the contributions of AGCO staff and provides them with opportunities for growth and professional achievement.

Governing legislation

Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, Regulations (141/01; 469/18)

Cannabis Licence Act, 2018 (CLA), Regulation 468/18

Gaming Control Act, 1992 (GCA), Regulation 78/12

Horse Racing Licence Act, 2015 (HRLA), Regulation 61/16

Liquor Control Act (LCA), clauses 3(1)b, e, e.1, f, g and 3(2)a, subsections 3.0.1(1), (2), 3.0.2(1), (2), 3.0.3 (1),(2),(3), (5), and section 4.1, Ontario Regulation 232/16

Liquor Licence Act (LLA), Regulations 58/00; 718/90; 719/90; 720/90; 70/09; 783/94; 389/91

Wine Content and Labelling Act, 2000, Regulation 659/00

Order-in-Council 208/2024

With the evolving views of society and to better reflect their maturity, the AGCO continues to refine its role in the promotion of social responsibility in the alcohol, gaming, horse racing and cannabis industries and sectors.

A focus on responsible gambling is a key factor in the public’s confidence in the gaming industry. A greater emphasis on responsible use is a continued focus during the continued modernization of the liquor sector. Public interest in the wellbeing of racehorses spotlights our ongoing commitment to the integrity and safety of horse racing. With the legalization of cannabis, the AGCO works to ensure that the retail sale of cannabis in Ontario is carried out with honesty, integrity, and in the public interest.

Social responsibility is an integral part of the AGCO as an organization and as a regulator. In 2019 the AGCO formally launched its Corporate Social Responsibility (CSR) program, which aims to embed CSR into the cultural fabric of the agency and to ensure that it is taken into account in regulatory and operational decisions. CSR encapsulates a range of initiatives at the AGCO that focus on supporting people both internally and externally, reducing environmental impacts and supporting its regulated industries. Through the COVID-19 pandemic, the AGCO continued to find ways to advance CSR, including through a new employer-funded Volunteer Time Off program that provides employees with the opportunity to use one day to support a charitable cause. This program is another step in the AGCO’s journey to enhance its commitment to social responsibility as an organization and make a positive impact and difference in the local community.

CSR helps provide the AGCO and its employees with a sense of purpose and motivation, and ultimately drives them to do good work.

The AGCO places a priority on digital and enhanced communications to inform and engage with audiences, based on its “Digital by Default” approach. Over this past year, under the spotlight of significant interest in the regulation of recreational cannabis, the AGCO had a unique opportunity to reinforce its communications commitment of sustaining the agency’s reputation by expanding its website content, amplifying its social media presence, proactively engaging with media and taking a direct communication approach with licensees.

AGCO website

The AGCO website had more than 1.2 million views in 2020–2021 by 667,000 users. Overall traffic to the site was 14% lower than the previous fiscal year. This is likely due to the spike in interest seen in 2019– 2020 due to the opening of cannabis stores, as well as the economic effects of COVID-19 in 2020–2021. Sixteen new videos were added in 2020–2021 for a total of 61 videos available on the AGCO’s Vimeo page or via the website. These videos generated a total of 8,500 views during the fiscal year, which is down from 34,000 views the previous year. This decrease can be attributed to the significant interest the cannabis industry received the previous year.

Social media

The AGCO continued to increase the reach of its regulatory announcements and build its social media communities and online engagement through its English and French Twitter accounts, @Ont_AGCO, @Ont_CAJO, @AGCO_Racing and @CAJO_Courses. There were 734 new followers in 2020–2021, for a total of 4,346 followers (a 20% year/year increase). A total of 4,297 tweets were sent during this fiscal year, with 2,750 engagements (retweets, replies, and likes) from users. Twitter and other social media platforms continue to be an important part of the AGCO’s communications strategy, and increasing the rate of follower growth remains a key objective.

Email distribution list

As part of its continual efforts to provide support during the COVID-19 pandemic, the AGCO focused its external email campaigns primarily on existing licensees and stakeholders, by informing them of the impacts of government and public health measures on their businesses. In 2020–2021, the AGCO sent over 372,000 emails during 95 direct email campaigns (in both official languages) to licensee and stakeholder groups across all regulated lines of business. This included the launch of the AGCO’s electronic Lottery Line and Race Line newsletters. The average email open rate of 65% exceeds industry standards.

AGCO media requests

Working with media outlets to share information continued to be a priority over the year.

TABLE 1: Media requests by month

¹ First Cannabis stores opening. ² Lottery draw for Second Allocation of stores

In 2020–2021, the AGCO undertook significant organizational structural change to better advance its strategic priorities and operational needs. Its organizational structure is based on functional responsibilities and consists of seven divisions, each led by a member of the Executive Committee that reports directly to the Chief Executive Officer and Registrar.

The Investigation and Enforcement Bureau (IEB) functions as an Ontario Provincial Police (OPP) bureau assigned to the AGCO and is headed by a Chief Superintendent of the OPP. The IEB is responsible for regulatory and criminal investigations, as well as sharing its expertise and information with external law enforcement and other regulatory and industry stakeholder agencies.

Organizational Structure of the AGCO

Organizational Structure (Text Version)

Brief description of corporate structure and function of AGCO divisions

Operations Division

Through its Licensing and Registration Branch (L&R), the Operations Division is responsible for reviewing and processing all application types, including licences, permits, authorizations and registrations, across all the lines of business regulated by the AGCO. L&R also works with municipalities and First Nations overseeing the licensing of charitable lottery schemes.

The Division includes Compliance Services (CS), which consists of the Audit and Financial Investigations (AFI) Branch and the Regulatory Compliance Branch (RCB). These branches conduct regulatory compliance activities, including education, planning, and inspections, along with audits and financial investigations across all lines of business. Equipping frontline staff with the knowledge and skills to deliver services to all industries and sectors, CS deploys regional, cross-functional teams who take a comprehensive, risk- and outcomes-based approach to regulatory compliance.

Compliance Officials (COs) and Auditors respond to compliance concerns when and where they occur, taking a multi-sector approach and maintaining a focus on supporting desired regulatory outcomes. In addition, the Forensic Accountants of the AFI Branch conduct due diligence in support of L&R processes and financial investigations regarding allegations of fraud.

RCB also provides Racing Officials (Judges and Stewards), who supervise horse races conducted at Ontario’s licensed racetracks, as well as Veterinary Services, which oversee the health and welfare of horses during racing. Veterinary Services work with the Official Veterinarians, who are employed by the racetracks but supervised by the AGCO.

The Division’s Technical and Laboratory Services staff assess and approve electronic games, systems and equipment against Ontario Technical Standards and assess supplier and Ontario Lottery and Gaming Corporation (OLG) quality assurance and testing procedures.

The Regulatory Assurance Branch (RAB) leads the development and implementation of tools, strategies and frameworks that assess risk and drive the AGCO’s compliance-focused approach. The RAB also works with the province’s cannabis retail store operators and the Ontario Cannabis Store to ensure the accurate tracking of all cannabis.

Corporate Affairs, Strategic Policy and Planning Division

The Corporate Affairs, Strategic Policy and Planning Division provides a variety of strategic functions to support the delivery of the agency’s mandate, including regulatory policy, external stakeholder engagement, and corporate planning. It also serves as the primary liaison with government partners to support government initiatives and conduct issues management.

The Corporate Secretariat responsible for Board support resides within this division and assists the AGCO Board of Directors in fulfilling its governance responsibilities. This includes ensuring that key corporate accountability measures are completed within government timelines and monitoring compliance with the Memorandum of Understanding between the government and the AGCO. A dedicated and independent unit also provides administrative support to the Horse Racing Appeal Panel.

Corporate Services Division

The Corporate Services Division provides advice and guidance on all aspects of the AGCO’s day-to-day administration and client services and plays a strategic role as proactive facilitator of the agency’s major change initiatives.

This Division is responsible for a number of functions and activities:

• A new People and Culture Branch, responsible for AGCO’s Diversity, Inclusion and Accessibility (DI&A) Framework, People Strategy, Workplace of the Future, and future organizational projects, ensures that foundational workforce pieces align with strategic priorities, human resource strategies and I&IT vision.
• The Human Resources and Training Branch is responsible for supporting the People First strategic direction. This includes full-cycle human resources operational services, wellness, employee engagement, coaching, management/labour relations, talent management and succession planning, talent data analytics/reporting, and internal and external training. This branch ensures that the AGCO Development Program harmonizes staff training needs with professional career growth, mentoring, coaching and succession planning.
• The Finance and Administration Branch provides the following services and resources: financial planning and reporting, accounting, payroll, procurement (including oversight of vendor management), facilities management, and mail and courier services.
• The Risk Management and Internal Audit Branch undertakes internal audits, which provide reasonable assurance that the AGCO’s risk management, governance and internal control processes are operating effectively. The Branch also supports the agency’s Enterprise Risk Management framework and coordinates the Emergency Management Enterprise System, which includes the Business Continuity Plan.”
• The Project Management Office (PMO) continues to manage AGCO’s priority projects. It ensures major projects stay on track, outcomes are aligned to strategic goals and the right resources are in the right place based on corporate needs.
• The Change Management Office (CMO) implements a change management framework for the agency by applying structured processes and tools to lead people through organizational change, and helps individuals transition by engaging, adopting and implementing change.

Information and Information Technology (I&IT) Division

The I&IT Division, in partnership with each business area, provides strategic advice and technology to support the AGCO’s strategic pillars of Digital First and Work of the Future. The Division oversees investment in information and information technology and makes it easier for people and businesses to interact and engage within the agency.

The Information Services division is responsible for the technology portfolio, which includes oversight of several branches:

• The Regulatory Information and Intelligence Branch (RII) provides data analytics solutions to inform regulatory policy and operations. It optimizes service delivery and resource efficiencies to ensure alignment with the two strategic pillars of Data Analytics and Data Governance.
• The Business Optimization Branch (BMO) continues to bring an enterprise-wide business lens to key optimization initiatives resulting in continuous process and business improvements across the organization. Built on a continuous innovation and improvement framework and digital transformation and automation mindset, this branch works with all lines of business to identify optimization opportunities and liaise with system and data teams.
• A new Cybersecurity Branch will be established to focus on matters related to AGCO's lines of business and corporate solutions such as iAGCO, the Data Analytic platform, Enterprise Document Management, and human resources and financial systems.
• The Information Management Branch provides IT planning and roadmaps, innovative business solutions, robust technology platforms, enterprise architecture and design, AGCO system development and configuration, data management/governance and end-user solutions, and operates the help desk.

Communications and Service Experience Division

The Communications and Service Experience Division provides strategic communications advice and services, manages media relations and the AGCO’s public reputation, and oversees the development of internal and external communication materials and publications. It builds understanding and acceptance of organizational objectives and policy priorities through regular communication with staff and stakeholders.

The Service Strategy and Experience Branch delivers on the AGCO’s Service Excellence strategic objectives by working with partners across the organization to strengthen the organization’s service culture and competencies and ensuring customer needs are the “organizing principle” around which policy development, service design and delivery are planned and executed. The branch houses the AGCO’s Contact Centre, handling 100,000-plus customer transactions yearly, across a range of channels. It also provides oversight of the agency’s inquiries and complaints handling policy and practices, and ensures the customer experience is monitored, measured and managed.

Investigation and Enforcement Bureau

The OPP Investigation and Enforcement Bureau (IEB) assigned to the AGCO employs approximately 135 sworn and civilian members, fully integrated within the AGCO. The OPP Superintendent (Director) reports directly to the Chief Superintendent. The Bureau’s branches conduct investigations across all lines of business regulated by the AGCO. The Bureau also provides investigative expertise to, and shares information with, other law enforcement services and regulatory and industry stakeholder agencies to ensure integrity and public safety within these regulated industries and sectors.

Legal Services Division

The Legal Services Division provides legal advice and services to the AGCO. This includes providing advice on the application of legislation, regulations and standards administered by the AGCO, assistance in drafting legislation, contracts and policies, as well as providing advice and opinions on corporate issues and initiatives. It also provides legal advice on licensee and registrant compliance matters within the regulatory framework and represents the Registrar at hearings of appeals before the Licence Appeal Tribunal (LAT), the Horse Racing Appeal Panel (HRAP), the Divisional Court and the Court of Appeal.

The AGCO is guided by a Strategic Plan that positions the agency to be an effective and modern regulator through an increasingly complex operating environment. Serving as a compass, the Plan helps the AGCO to strategically navigate the challenges and opportunities that exist within the liquor, gaming, horse racing and cannabis retail industries and sectors.

The Strategic Plan outlines the vision and strategic goals of the organization. The AGCO’s vision of being a world-class regulator that is innovative, proactive, inclusive and socially responsible will be achieved through its three strategic goals – Modern Regulator, Service Excellence, and People First. Characterized by a set of key commitments that drive AGCO’s culture and inform decision-making, these goals align with, and support the achievement of, government objectives to:

• enhance accountability and efficiency in the delivery of public services
• use evidence-based decision-making and policy development
• reduce the administrative burden on businesses, and
• increase consumer choice.

Continuing to put employees’ wellbeing at the top of our priorities, the AGCO is developing a Wellness Strategy that will outline the various ways we support, encourage and increase awareness in the area of health and wellbeing.

The AGCO is responsible for regulating Ontario’s privately run cannabis retail stores under the Cannabis Licence Act, 2018 and Regulation 468/18.

Under Ontario’s regulatory model, the AGCO:

• licenses eligible retail store operators and managers
• authorizes cannabis retail stores
• regulates and enforces the appropriate sale of recreational cannabis in privately run stores in Ontario.

In 2020–2021, the AGCO continued its work to support the Government of Ontario in the regulation of legal, recreational cannabis.

In response to the COVID-19 global pandemic, the government declared a state of emergency in April 2020. The AGCO responded in turn by updating its Registrar’s Standards for Cannabis Retail Stores to enable delivery and curbside pickup, announcing various burden-reduction measures as well as pivoting to a remote compliance approach wherever possible.

While the government’s emergency orders expired in July 2020, it subsequently announced a lockdown in November 2020, followed by stay-at-home orders in January 2021. The AGCO amended its Registrar’s Standards for Cannabis Retail Stores accordingly to permit delivery and curbside pickup in applicable regions and will continue to be responsive to licensees and other stakeholders throughout the duration of the pandemic and beyond.

In 2020–2021, the AGCO, in partnership with the Ontario Cannabis Store, significantly increased the rate at which it issued Retail Store Authorizations (RSAs). As of February 2021, the AGCO began issuing 30 RSAs per week.

To help both new and current applicants better understand the RSA application process, the AGCO also developed and published new resources, including:

• A Cannabis Retailer Licensing Journey Map that outlines the step-by-step process of opening a cannabis retail store.
• An enhanced map of cannabis stores in Ontario, offering updated and detailed information on proposed and authorized cannabis retail store locations across the province.

In December 2019, the Liquor Licence and Control Act (the LLCA) received Royal Assent.

The LLCA represents a major modernization of the regulatory regime for Ontario’s beverage alcohol sector and is expected to come into force in 2021.

Over the past year the AGCO has continued to work collaboratively with Government to develop the regulations that will complete the new regulatory framework under the LLCA. In the coming years, the AGCO will work to implement the changes in the liquor regulatory regime and develop Registrar’s Standards for the sector to reflect the AGCO’s modern, outcomes-based approach to regulation.

Throughout 2020, the AGCO worked collaboratively with the Government of Ontario to introduce several measures to support businesses through the COVID-19 pandemic and offer consumers greater choice and convenience, now and into the future. These changes include:

• Providing flexibility for local businesses and restaurants by introducing liquor takeout and delivery with food from eligible liquor licensed establishments.
• Increasing options for liquor delivery to customers by providing more flexibility for liquor delivery licensees and manufacturers with a retail store and the Beer Store.
• Partnering with Smart Serve to offer free registration to the certification program to quickly increase the availability of certified delivery drivers. There was an overwhelming response to the initiative, with 100,000 enrolments during the free enrolment period.
• Enhancing consumer choice and reducing administrative burden on businesses by expanding the Farmers Market program to permit additional Ontario wines and allow the sale of spirits at Ontario farmers’ markets.
• Permitting virtual auctions to provide charitable organizations, administrators, executors, and law enforcement officers more flexibility to continue operations during the ongoing restrictions on social gatherings and into the future.
• Allowing liquor sales licensees (e.g., licensed bars and restaurants) to temporarily extend their patios to support businesses to safely reopen and minimize administrative burden for licensees.
• Allowing boat operators with a liquor sales licence to sell and serve liquor while the boat is docked, and to temporarily extend their licensed premises to create a patio.
• Temporarily extending the liquor sales retail hours to provide ongoing flexibility for customers and retail stores. This extension of hours applies to all authorized grocery stores, Manufacturer’s Retail Stores, LCBO stores (including Convenience Outlets), and Brewers Retail Inc. stores (The Beer Store).

OLG casino modernization

The OLG started modernizing commercial gaming operations by inviting private-sector casino companies to become the new Casino Operators. The OLG divided Ontario casino sites into eight gaming bundles and released Requests for Proposal for private-sector Casino Operators for each bundle. All eight bundles (East, Southwest, North, Ottawa, GTA, West GTA, Central, and Niagara) have transitioned to private- sector Casino Operators. The Niagara Bundle was the last to transition in June 2019.

Casino Operators are choosing to build new casinos or expand and relocate existing ones in their respective bundles. Numerous expansions and new builds have taken place over the past few years, many with plans to build hotels and live entertainment venues, as well as expand gaming facilities to include “live” table games. The AGCO enhances the operators’ understanding of and compliance with AGCO/OPP regulatory requirements by providing them with a Building, Expanding and Relocating Casinos guide, and participates in activities such as pre-opening compliance inspections and “mock” casino exercises.

In accordance with the Open Data Directive, the AGCO posted on its website an inventory of datasets under its custody and control. The inventory identifies whether a dataset is currently open, in the process of being opened, or exempt from being released as open data due to legal, security, privacy, confidentiality or commercially sensitive reasons. New datasets were added to the inventory in 2020. The AGCO will continue to make priority datasets available to the public on its website under an open-by-default approach.

In February 2021, the Ontario Government released three new data directives. The new Digital and Data Directive replaces the Open Data Directive.

The Accessibility for Ontarians with Disabilities Act, 2005 (AODA) was created with the goal of developing standards that would improve accessibility for people with disabilities across the province. The AGCO has developed accessibility standards in the areas of customer service, employment, information and communications, transportation and the physical environment.

The AODA requires all provincial agencies to provide updates to their Accessibility Plan and Policies on an annual basis. The AGCO is committed to meeting the needs of persons with disabilities in a timely manner by preventing and removing barriers to accessibility and meeting accessibility requirements under the AODA. The AGCO has implemented the requirements outlined in the plan and participated in various activities to inform its plan and policies, including the review and update of its practices in the areas of training, information and communication, and employment.

The AGCO is committed to ensuring that its public website meets or exceeds the accessibility standards required under the AODA. This includes producing all content in an accessible HTML format, which can be more easily read by assistive technologies such as screen readers. The AGCO website met Web Content Accessibility Guidelines (WCAG) 2.0 Level AA in December 2020. These guidelines are an internationally accepted standard for web accessibility developed by the World Wide Web Consortium, an international team of experts. Each guideline has three levels of accessibility: A, AA and AAA.

All AGCO employees are trained on the requirements of Ontario’s accessibility laws, including the Integrated Accessibility Standards Regulation (IASR) and the Ontario Human Rights Code as it pertains to persons with disabilities. This accessibility training has been built into the employee orientation process to ensure that all new AGCO employees, as well as the Board of Directors and HRAP members, have a good and appropriate understanding of accessibility to perform their duties and provide services to the AGCO’s diverse stakeholders.

The AGCO maintains a commitment to meeting all requirements under the AODA and the IASR and continues to refine its accessibility plan with a focus on ensuring its policies and practices remain accessible and meet the needs of all stakeholders, including persons with disabilities.

The French Language Services Act (FLSA) applies to all Ontario government ministries and agencies and protects the rights of French-speaking people in Ontario. Under the FLSA, all AGCO staff are responsible for ensuring that members of the public can access AGCO services in French.

The AGCO is committed to making its services to the public available in French at the same quality and service standard as in English. In addition to frontline assistance provided by AGCO staff, the AGCO seeks to ensure that French Language Services are clearly visible, readily available, easily accessible and publicized. In line with this commitment, the AGCO has developed policies and procedures to document and support the consistent delivery of French language services across the agency.

Funding for Educational, Training and Awareness (ETA) initiatives is available through the AGCO’s Orders of Monetary Penalty (OMP) account. This account is funded through the monetary penalties that have been assessed against licensees, registrants and others regulated by the AGCO who have contravened provincial laws. The AGCO is required to use all of the money collected through monetary penalties exclusively for ETA purposes. Over the years the AGCO has increasingly leveraged OMP money to develop educational projects and initiatives to promote and enhance regulatory compliance.

In 2019–2020, the Education, Training and Awareness (ETA) Fund was launched, allowing industry associations, social responsibility groups and others similarly active and that have the capacity to deliver programming in the industries and sectors the AGCO regulates to develop programs strategically aligned with the AGCO’s mandate. Funding is provided to programs selected by the AGCO by using money collected through OMPs.

In its first year, the AGCO selected three projects to receive funding. All three projects were successfully completed in 2020 and delivered on their intended objectives:

Project 1: MADD Canada

Funding Provided: $100,000.00
Final Evaluation: June 2020

MADD developed a public service announcement aimed at thanking servers and licensees for keeping our communities safe by refusing to sell alcohol to intoxicated customers in compliance with the law and demonstrating what can happen when servers do not uphold the law. The announcements were run on TV and radio stations in Ontario, in addition to Facebook and YouTube for five months.

• Total online views = 1.4 million
• Total online impressions = 2.29 million
• Total television broadcasts = 862

Project 2: Responsible Gambling Council (RGC)

Funding Provided: $81,400.00
Final Evaluation: December 2020

The RGC developed a series of evidence-informed social media messages about refraining from gambling while intoxicated by alcohol and/or cannabis, targeting young adults in Ontario, with a focus on Kenora, North Bay, and Peterborough.

• Total online views across all videos = 24,349
• Total online impressions = 444,599
• The Northwestern Health Unit and Peterborough Public Health Unit ran social media posts allowing the campaign to reach an additional 1,218 and 480 individuals respectively.

Project 3: Kingston, Frontenac, Lennox and Addington Public Health Unit

Funding Provided: $45,000.00
Final Evaluation: February 2021

The Kingston, Frontenac, Lennox and Addington (KFLA) Public Health Unit developed a young adult social marketing campaign aimed at reducing the harms of binge drinking. The campaign targeted the young adult peer crowd at greatest risk of alcohol harm. The campaign was presented on Facebook, Instagram and Snapchat for two months.

• Total online impressions: 1,693,652
• Non-video view engagements (likes, comments, shares): 1,868
• Total video views: 325,425

Given the success of the first year of the ETA Fund, the AGCO launched an additional round of funding for the 2020–21 fiscal year. The AGCO selected two projects to receive funding and these projects will be reported on in next year’s annual report.

Upcoming Project 1: A Question of Care (Peterborough Drug Strategy)

Supporting individuals who drink beyond recommended limits
Funding Provided: $22,600.00

Objective: A Question of Care was developed to engage health and social service professionals in conversations about substance use and mental illness with topic-specific workshops/training opportunities. As part of the Peterborough Drug Strategy, a Question of Care will expand the course offering to include new courses on alcohol use with the goal of reducing stigma. By enhancing the skills of professionals and building the capacity of friends and family members to understand substance use, the community will be better able to support individuals who experience people who drink beyond recommended limits.

Upcoming Project 2: Parachute Canada – Avoid Cannabis Impaired Driving

Funding Provided: $100,000.00

Objective: Parachute will adapt their #KnowWhatImpairedMeans campaign with an intended audience of Ontarians aged 25 to 34. With a consistent theme of showing situations where one would not trust someone high to keep them safe, this campaign draws the parallel to not driving while high. In addition, they will explore a point-of-sale (POS) partnership with one or more licensed Ontario cannabis retailers to share reminders about the effects of cannabis on fine motor control and perception and provide tips on avoiding cannabis-impaired driving.

_{^{1 Includes applications, inquiries and complaints}}

_{^{2 Includes application turnaround times and auto-renewals completed on the iAGCO portal}}

_{^{3 Average based on AGCO website, iAGCO portal and telephone calls}}

_{^{4 Based on the 2018 AGCO Employee Engagement Survey}}

_{^{5 Based on the 2018 AGCO Employee Engagement Survey}}

Management's Statement of Responsibility for Financial Reporting

The accompanying financial statement of the Alcohol and Gaming Commission of Ontario has been prepared by management in accordance with the accounting policies described in Note 2 to the financial statement. The financial statement has been properly prepared within reasonable limits of materiality and is based on information available up to July 6, 2021.
Management is responsible for the integrity of the financial statement 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 ensure 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 statement has 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 statement is prepared in accordance with the accounting principles described in Note 2 to the financial statement. 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:

Indepedent Auditor's Report

To the Board of the Alcohol and Gaming Commission of Ontario

Opinion

I have audited the Statement of Revenue and Expenditures of the Alcohol and Gaming Commission of Ontario (the AGCO) for the years ended March 31, 2021 and March 31, 2020, and notes to the financial statement, including a summary of significant accounting policies (together the "financial statement").

In my opinion, the accompanying financial statement is prepared, in all material respects, in accordance with the basis of accounting described in Note 2 to the financial statement.

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 Statement 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 statement 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.

Emphasis of Matter — Basis of Accounting

I draw attention to Note 2 to the financial statement, which describes the basis of accounting. The financial statement is prepared to report on the revenue and expenditures of the AGCO. As a result, the financial statement may not be suitable for another purpose. My opinion is not modified in respect of this matter.

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

Management is responsible for the preparation of the financial statement in accordance with the basis of accounting described in Note 2 to the financial statement, and for such internal control as management determines is necessary to enable the preparation of a financial statement that is free from material misstatement, whether due to fraud or error.

In preparing the financial statement, management is responsible for assessing the AGCO·V 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 Responsbilities for the Audit of the Financial Statement

My objectives are to obtain reasonable assurance about whether the financial statement as a whole is 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 the financial statement.

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 statement, 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 us 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 statement 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.

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
July 6, 2021

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 Revenue and Expenditures
($'000)

See accompanying notes to the financial statement.

On behalf of the Board:

Notes to the Financial Statement
For the Year Ended March 31, 2021
($'000)

1. Nature of Opeations
   The Alcohol and Gaming Commission of Ontario (AGCO) is an Ontario provincial regulatory agency reporting 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 when the AGCO became responsible for the regulation of retail cannabis sales.
    
   The AGCO is responsible for regulating the alcohol, gaming and horse racing industries and sectors as well as cannabis retail in accordance with the principles of honesty and integrity, and in the public interest. In so doing, the AGCO administers the Liquor Licence Act, Gaming Control Act, 1992, Horse Racing Licence Act, 2015 and the Cannabis Licence Act, 2018. The AGCO also administers sections of the Wine Content and Labelling Act, 2000 and the Liquor Control Act as well as the charity lottery licensing Order-in-Council 208/2024.
    
   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 recoveries.
    
   The AGCO is exempt from income taxes. The AGCO's head office is located at 90 Sheppard Avenue East, North York, Ontario, Canada, M2N 0A4.
2. Significant accounting policies
   1. Basis of accounting
      The financial statement is prepared on a cash basis of accounting. Consequently, revenues are recognized when received rather than when earned, and expenditures, except for certain transactions with related parties, are recognized when cash is disbursed rather than when the obligation is incurred. Expenses allocated to the AGCO by Ministries of the Province of Ontario (Note 4a) are expensed when charged, as these transactions are not settled in cash.
   2. Currency
      The financial statement is presented in Canadian dollars (the AGCO’s functional currency).
       
      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.
   3. Revenue
      Revenue from fees, licenses and registrations are recorded in the fiscal year that the payment is received.
       
      Revenue from other sources include awarded costs from court received in the fiscal year.
   4. Recoveries
      The AGCO is authorized to recover costs of its regulatory activities in accordance with the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996. The AGCO records recoveries in the Statement of Revenue and Expenditures when the payment is received.

3. Fee and levies
   The AGCO collects fees and levies from the issuance of licences, permits and registrations to the following sectors:

   	2021	2020
   Cannabis	$8,067	$8,907
   Gaming	$2,161	$14,253
   Liquor	$2,485	$14,563
   Other	-	$5
   Total	$12,713	$37,728

4. 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.
    
   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 has 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, 2021, the AGCO was charged $14,488 (2020 - $16,390) by the Ministry of the Solicitor General for these costs.
      2. The Ministry of Government and Consumer Services (MGCS) provides the AGCO with network, telecommunication and administrative services. For the year ended March 31, 2021, the AGCO was charged $1,410 (2020 - $1,561) by MGCS for these costs. MGCS also provides the AGCO with other services such as accounting 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, 2021, the AGCO was charged $661 (2020 - $893) for this cost.
      4. For the year ended March 31, 2021, MAG charged the AGCO $481 (2020 - $376) for legal services, horse racing regulatory costs, Workplace Safety Insurance Board charges and other administrative services.
      5. MAG provides the AGCO with leased office space at 6 (2020 – 6) locations across the province without charge.
   2. Liquor Control Board of Ontario (LCBO)
      For the year ended March 31, 2021, the AGCO paid LCBO $125 (2020 - $136) for winery audit services and administrative costs.
   3. Ontario Racing Management Inc. (ORM)
      For the year ended March 31, 2021, the AGCO paid ORM $120 (2020 - $138) for the rent of one office location.
5. 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 PSPP and a joint sponsor of OPSEUPP with the Ontario Public Service Employees Union. The sponsors of these plans determine the AGCO’s annual payments to the respective plans. The AGCO’s responsibilities with regard to PSPP and OPSEUPP are limited to its contributions. Payments made to the plans are recognized as an employee benefits expenditure when contributions are made to the plans. The AGCO’s required annual payments of $4,573 (2020 – $4,428), is included in employee benefits expenditure in the Statement of Revenue and Expenditures.
6. Post-employment benefits
   1. Non-pension post-employment benefits
      The costs of non-pension benefits for eligible pensioners are paid by the Province of Ontario and is not included in this financial statement.
   2. Separation costs
      Separation costs made to employees are recognized as an employee benefits expense when payment is made. For the year ended March 31, 2021, these separation costs amounted to $293 (2020 - $300).
7. AGCO Board of Directors' remuneration
   The AGCO's Board of Directors are part time appointees and are remunerated according to Schedule B of the Management Board of Cabinet’s Agencies and Appointments Directive. Total remuneration paid to the Board of Directors during the year was $105 (2020 - $121).

8. COVID-19 impacts
   On March 11, 2020, COVID 19 was declared a global pandemic by the World Health Organization. The Government of Ontario declared a state of emergency on March 17, 2020. In response, to support its licensees and registrants, the AGCO extended the terms of licences, authorizations and registrations through a series of announcements between March 18, 2020 and January 14, 2021. Effective March 18, 2020, the combined term extensions granted were as follows:

   • Active liquor and gaming licences, authorizations and registrations – 15 months;
   • Active cannabis licences, authorizations and registrations – 9 months;
   • Active horseperson licences – 12 months; and
   • Horseperson licences expired within six months of March 18, 2020 – 12 months.

   Further, in recognition of the impact the pandemic had on businesses that rely on in-person patrons, the AGCO provided recovery waivers to the Ontario gaming sector and refunded any recoveries already collected.
    
   The horse racing sector was allowed to operate for a significant part of the year without patrons in attendance. The AGCO waived fees for all Ontario racetrack operations for the months of April and May 2020. The AGCO also fully waived licensing and regulatory fees for racetrack operators who were required to cancel their scheduled races as a result of the emergency declaration and province wide shut down orders.
    
   These AGCO cost relief measures resulted in a significant decrease in fees, levies and recoveries for the year ended March 31, 2021.

Statistical report for 2020–2021

Appeals

Motions

Hearings