The AGCO is Ontario’s regulator for the sale and service of alcohol, horse racing, retail cannabis, and lottery and gaming, including the expanded provincial internet gaming (igaming) market. The AGCO has long strived to be at the forefront of modern industry regulation, and over this past year, it was well positioned to regulate effectively and respond to industry needs during the evolving COVID-19 pandemic.

The AGCO is required under the Agencies and Appointments Directive to annually provide a multi-year Business Plan to the Attorney General. This Business Plan sets out AGCO’s core strategy for the next three fiscal years, including the initiatives for the upcoming year that will be undertaken toward this strategy.

The AGCO’s Strategic Plan sets out the following three strategic goals: Modern Regulator, Service Excellence, and People First. These goals align with and support the achievement of the AGCO’s mandate and key government objectives for enhanced accountability and efficiency in delivering public services; evidence-based decision making and policy development, reducing the administrative burden on businesses; and increasing consumer choice.

As the AGCO enters the third year of its five-year Strategic Plan, the organization remains focused on its strategic goals while continuing to evolve its regulatory and business functions in support of government objectives. The AGCO continues to strive to successfully meet its expanding regulatory mandate within Ontario’s complex alcohol, lottery and gaming, horse racing, and retail cannabis sectors.

For 2022-23, the AGCO’s strategic corporate projects will include continued modernization of its regulatory frameworks for gaming and liquor, completing its work to address the 2020 Value for Money Audit of AGCO by the Office of the Auditor General of Ontario and implementing a focussed diversity, inclusion and accessibility strategy.

The AGCO will continue to apply its risk-based, outcomes-based, and compliance-focused approach to regulation. This provides greater flexibility for regulated entities in terms of how they achieve regulatory compliance and enables the AGCO to more effectively manage risks while prioritizing resources to ensure its approach to regulation is fair and responsive to sector needs while protecting the public interest.

In July 2021, the government announced that iGaming Ontario, a new subsidiary of the AGCO, will conduct and manage the new online gaming (igaming) offerings in the province. It will also help establish Ontario as an international leader in online gaming while ensuring robust measures are in place to protect consumers. iGaming Ontario anticipates that it will be fully operational in early 2022. The Ontario Lottery and Gaming Corporation (OLG) will continue to conduct and manage its own igaming offerings through OLG.ca.

iGaming Ontario’s principal activities will be the conduct and management of igaming offerings and revenue generation for the province. To achieve these, iGaming Ontario will enter into an operating agreement with private operators on behalf of the province and determine which types and categories of games are permitted to be offered to players. This will enable private operators to offer a version of their games to consumers within Ontario’s regulated framework in exchange for a defined revenue share paid to the operator. This model is intended to bring operators and suppliers currently operating outside of Ontario’s regulated igaming market into it.

The igaming model was developed by the provincial government based on various considerations, including the need to be compliant with the Criminal Code (Canada), as well as experience and feedback from stakeholders and private operators potentially interested in participating in Ontario’s new regulated market. iGaming Ontario will begin to produce a Business Plan in fiscal 2022-23 once it is operational.

The AGCO’s role as regulator for all legal gaming activities in Ontario will remain the same and will be kept separate from the subsidiary’s role.

The AGCO is an arm’s length regulatory agency of the provincial government, reporting to the Ministry of the Attorney General (MAG). It was established on February 23^rd, 1998, under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996. The AGCO continues as a corporation under a new corporate governance statute, the Alcohol and Gaming Commission of Ontario Act, 2019.

The AGCO is responsible for the administration of:

• Alcohol and Gaming Commission of Ontario Act, 2019
• Liquor Licence and Control Act, 2019
• Gaming Control Act, 1992
• Charity Lottery Licensing Order-in-Council 208/2024 (as amended)
• Cannabis Licence Act, 2018
• Horse Racing Licence Act, 2015

Over the last 10 years the AGCO’s mandate has continuously evolved to support the growth of the alcohol, lottery and gaming, horse racing, and retail cannabis sectors and, more recently, the open competitive igaming market.

In July 2021, changes to AGCO’s mandate and structure to regulate the new igaming framework and reflect the AGCO Board’s accountability to the Attorney General for oversight of iGaming Ontario came into effect. Ontario Regulation 517/21 under the Alcohol and Gaming Commission of Ontario Act, 2019, provides for appointments to the iGaming Ontario Board. There is the ability to cross-appoint AGCO Board members to the iGaming Ontario Board of Directors with certain limitations which are set out in regulation.

While iGaming Ontario is a subsidiary of the AGCO, it will be operating on a day-to-day basis as a separate legal entity, with a distinct legal mandate to conduct and manage prescribed igaming offerings. Its Executive Director has a direct reporting relationship to the iGaming Ontario Board and Chair. iGaming Ontario also has distinct objects and duties prescribed in the regulation, including enhancing the economic development of the Province of Ontario, generating revenues for the province, and promoting responsible gaming with respect to prescribed igaming offerings. In turn, the iGaming Ontario Board Chair reports to the AGCO Board on iGaming Ontario matters.

The AGCO remains an independent agency responsible for the regulation of gaming activities in the province, including igaming, to ensure it is conducted with honesty, integrity, and in the public interest. The Registrar’s role is independent of iGaming Ontario’s role in the conduct and management of igaming.

The AGCO is developing a comprehensive Conflict of Interest (COI) policy for all AGCO employees, the Registrar and CEO, and AGCO Board Members. iGaming Ontario is also required by regulation to develop and maintain a separate COI policy for its directors, officers employees.

The AGCO has also been working diligently to develop an igaming regulatory regime for an open, competitive market that provides consumer choice, protects consumers, supports legal market growth and provincial returns, and reduces red tape. The AGCO’s regulatory approach has remained nimble and adaptive to ensure these sectors are regulated effectively and efficiently while also ensuring that the sectors are conducted in accordance with the principles of honesty, integrity, and in the public interest, as prescribed in the AGCO’s governing legislation.

The AGCO’s Strategic Plan articulates the vision, goals, and key commitments the agency has made to fulfill its regulatory mandate and to support the achievement of the priorities outlined by the Ontario Government, in particular the Ministry of Attorney General to which the AGCO reports.

In fulfilling its mandate, the AGCO Chair reports to the Attorney General. The AGCO is committed to fulfilling the expectations as set out in its 2022-23 mandate letter from the Attorney General. The AGCO has developed this 2022-23 – 2024-25 Multi-Year Business Plan to align with the expectations in its mandate letter and in support of achieving the government’s objectives.

The AGCO promotes compliance with relevant legislation, regulations, and Registrar’s Standards to protect the public interest in alignment with government and ministry priorities. The following core activities enable the AGCO to fulfill its mandate effectively.

Licences and Registrants for the 2020/2021 Fiscal Year

The charts below outline some of the AGCO’s licensing and registration activities, including the number of active licences and registrations in the fiscal year (FY) 2020-2021 and the number of special occasion permits issued during that time.

Alcohol

The AGCO licenses and regulates establishments that sell, serve or deliver liquor. In addition to establishments, the AGCO also licenses and regulates alcohol manufacturers, including by-the-glass, retail store, delivery, and temporary extension endorsements. The AGCO also administers the Special Occasion Permit (SOP) program, allowing for the sale and service of liquor on special occasions. In terms of compliance activities, the AGCO inspects, monitors, and educates licensed establishments to ensure compliance with the Liquor Licence and Control Act, 2019 and regulations.

SOPs issued in FY2020-2021

Lottery and Gaming

Licensing and Registration activities for lottery, gaming, and internet gaming sectors include registering operators, suppliers, retailers/sellers, and gaming assistants. In partnership with licensing authorities of municipal and First Nations with an IOC, the AGCO administers the regulatory framework governing the issuance of charitable lottery licences (e.g., bingo, raffle, and break open ticket events). The AGCO also approves rules of play or changes to rules of play for games of chance conducted and managed by the OLG and licenses games of chance at fairs and exhibitions. In addition, the AGCO works to ensure excluded persons (i.e., youth and self-excluded individuals) do not access gaming premises in Ontario pursuant to the Gaming Control Act, 1992.

Compliance activities for the lottery and gaming sector include, inspecting and monitoring casinos, internet gaming, charitable gaming events/facilities, and retail locations where OLG lottery products are sold for compliance with the Gaming Control Act, 1992 and its regulation, any licence/registration requirements as well as the standards and requirements established by the Registrar of the AGCO. The AGCO ensures the safe, responsible and lawful operation of the expanded igaming market consistent with the Gaming Control Act, 1992. The AGCO also conducts ongoing regulatory assurance activities, including regular audits, testing, and site visits, to assess compliance with the Gaming Control Act, 1992 and the standards and requirements established by the Registrar. The agency also arbitrates lottery disputes.

The AGCO also tests, approves, and monitors slot machines and gaming and lottery management systems. In terms of internet gaming, the AGCO conducts technical assessments, including analysis of an internet gaming site’s random number generator software design; analysis of game design and verification of software functionality through mathematical analysis, simulation, emulation of the rules of play; and thorough assessment of a platform’s security and testing for vulnerabilities.

Horse Racing

The AGCO regulates the conduct of horse racing at Ontario’s licensed racetracks through the Rules of Racing for Thoroughbred, Standardbred, and Quarter Horse breeds, exercising authority for the overall governance of horse racing in Ontario. The AGCO also licenses and regulates individuals and businesses involved in the horse racing industry, including processing applications from racing participants and for racetracks and teletheatre locations and conducting due diligence reviews and investigations of applicants. Lastly, the agency promotes safety and consistency for horse racing participants and equine athletes.

The AGCO ensures compliance with the Rules of Racing by investigating 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. This program identifies and investigates people and businesses involved directly and indirectly with illegal equine medication and drugs, investigates racehorse deaths, and identifies new and unknown drugs and medication used in horse racing. The AGCO also ensures an Official Veterinarian is in attendance to supervise live racing and confirm that horses are healthy and fit to race. Lastly, the agency administers and oversees the Human Alcohol and Drug Program designed to detect and deter substance abuse and offer programs of intervention, rehabilitation, and support to those in the horse racing sector who are identified as having substance abuse problems.

The Horse Racing Appeal Panel, an independent adjudicative tribunal, the members of which are appointed by the AGCO Board, hears appeals of rulings made by Judges, Stewards, and Racing Officials under the Rules of Racing.

Cannabis

The AGCO licenses and regulates Cannabis Retail Store Operators and Managers, authorizing Cannabis Retail Stores, approving Cannabis retail employee training programs, and regulating the sale of recreational cannabis through privately run stores. Cannabis compliance activities include a range of activities related to authorized cannabis retail stores to ensure their compliance with the Cannabis Licence Act, 2018, its regulation, and the Registrar’s Standards.

Educational Activities in FY2020-2021

The AGCO proactively provides education to all sectors and those who are regulated to increase their understanding of regulatory obligations and improve overall compliance. The chart below outlines the number of educational activities conducted by the AGCO during the 2020-21 fiscal year.

Environmental Scan

As a result of the COVID-19 pandemic, the past year has continued to bring unprecedented challenges to the liquor, gaming, horse racing, and retail cannabis sectors in Ontario. These challenges required the AGCO to adapt its regulatory approach to support these sectors, while maintaining a high degree of public confidence in fulfilling its regulatory mandate.

Looking forward to 2022-23 and the following years, the AGCO aims to balance the need for economic sustainability and recovery with continuing its focus on regulating in the public interest. This includes working with stakeholders from across the sectors it regulates, and the government to consider and recommend changes to legislation, regulations, and policies for regulating these sectors.

The AGCO has experienced significant growth in the last few years, having assumed responsibility for the horse racing industry, private cannabis retailers, as well as internet gaming, and ongoing liquor modernization. As a result, in addition to its strategic intent, the AGCO will also be increasing its focus internally on continuous improvement with a digital perspective, business optimization measures, and strengthening its financial framework over the next three years.

Many of the determinants of the AGCO’s operating environment flow from changes to government legislation and regulations. At the same time, public expectations and the AGCO’s visibility continue to rise, making it even more imperative that the AGCO regulate effectively and in the public interest. These new challenges underline the importance of focusing regulatory attention on higher-risk areas so that the AGCO is better equipped to navigate a changing environment.

Assessing and Managing Risk

The AGCO, like all organizations, faces external and internal factors that carry several risks and uncertainties which, if left unaddressed, could adversely affect the achievement of the AGCO’s strategic goals. The AGCO leverages risk management methodologies through the continued use and enhancement of an ERM Framework to monitor and mitigate these environmental risk factors. The ERM Framework assists the organization in identifying areas of risk in a systematic, disciplined, and integrated approach.

Key risks identified under this framework include:

• New business functions and/or mandate change(s) requiring significant organizational and governance changes, may not be effectively integrated with current AGCO responsibilities

• COVID-19 pandemic may negatively impact the achievement of corporate and strategic plans

• Building a strong information security approach in the event that a significant information security incident occurs

• The achievement of AGCO’s strategic and corporate plans may be negatively affected if the leadership and workforce do not have the appropriate skill sets and expertise

• Financial resources are insufficient to meet operating and performance expectations

As mentioned above, ERM is a continuous, proactive, and systematic process to understand, manage and communicate risk from an organization-wide perspective and assists management in making strategic decisions that contribute to the achievement of the AGCO’s corporate objectives. An annual risk workshop is held with the senior management team to identify, assess, and decide on prioritization and mitigation activities for the AGCO’s top risks.

The results of the risk assessment activities are a key input in developing the AGCO’s Audit and Evaluation Plan, which prioritizes areas considered high risk and provides coverage of risk management, control, and governance processes. They also play a core role in developing the AGCO’s Corporate Plan.

External Factors

The AGCO has identified enterprise-wide risks that could impact the agency’s ability to deliver on its regulatory responsibilities. The AGCO will continue to monitor risks and implement risk mitigation strategies to ensure the AGCO is able to fulfill its mandate.

Responding to the COVID‑19 pandemic

The COVID-19 pandemic necessitated a major shift in the AGCO’s approach to developing and implementing regulatory activities. The COVID-19 pandemic has required the Ontario Government and the AGCO to react to unforeseen challenges as they arose. The AGCO has responded to demand from the sectors it regulates and requests from the Ontario Government to adapt its regulatory requirements to help protect public health while supporting the continued economic viability of the liquor, gaming, horse racing, and retail cannabis sectors. The AGCO has demonstrated a flexible regulatory approach and the ability to move swiftly to protect regulated sectors. The AGCO has learned from the strategies implemented during the COVID-19 pandemic and will continue to draw on this as Ontario moves forward with recovery from the COVID-19 pandemic. In the coming years, the AGCO will continue to work closely with the government to provide ongoing supports for the sectors we regulate, such as revised alcohol retail store hours and patio extensions. The AGCO has worked with the retail cannabis sector to implement curbside pickup and delivery from cannabis retail stores and will continue to support these retailers.

More than two-thirds of AGCO’s budget comes from recoveries collected from regulated industries.  Due to the COVID-19 pandemic, many of the regulated sectors were closed or greatly reduced in their offerings, making it untenable for the AGCO to recover costs. As a result, the AGCO is facing economic challenges in recovering its costs, resulting in a budget shortfall.   The AGCO and the Ministry of the Attorney General continue to manage its budget in a fiscally responsible manner.

In the coming months and years, the AGCO will continue to assess the impact of the COVID-19 pandemic on the alcohol, gaming, horse racing, and retail cannabis sectors. The AGCO will work closely with the Ontario Government to support economic recovery while fulfilling its regulatory mandate.

Emerging Issues and Industry Trends

The AGCO continues to monitor and address the evolution in public and consumer attitudes towards the sectors we regulate and will continue to stay informed on issues related to unregulated areas. These industry trends include changing consumer choices, increasing customer service expectations, and calls for more stringent protections on information. These trends are linked to global currents of rapidly advancing technological development, fully integrated use of data and analytics, and an increasingly digital first world. As a modern and collaborative agency, the AGCO will work with government partners, municipalities, law enforcement, and its stakeholders to address new challenges that may arise in the future.

Internal Factors

Impact of COVID-19 on the AGCO’s Workforce

A rewarding workplace environment with high performing and empowered staff is essential to implementing a successful transformation of the AGCO’s regulatory approach. Engaging staff is a particular challenge, with the majority of AGCO’s employees working remotely during the COVID-19 pandemic. The AGCO will continue to work on this and has just introduced a number of operational and well-being measures. Examples include:

• Regulatory activities that are typically conducted away from home (e.g., compliance inspections) have been modified to protect the health and well-being of AGCO employees and the broader public. The AGCO will continue to ensure that the necessary personal protective equipment (PPE) such as masks, gloves, and hand sanitizer are available to field staff.

• Keeping staff connected, engaged and supported, through monthly “Staying Connected” newsletters and the “Ask Us Anything” video conferences led by the AGCO executive team to provide an opportunity for all AGCO staff to ask questions directly.

• The AGCO launched the Future of Work initiative. This initiative identifies what the future of work looks like at the AGCO and embraces solutions that advance the Digital and People First mindsets. AGCO’s hybrid work policies will be evaluated in 2022-23 with the goal to continue to evolve AGCO’s workplace as flexible, with the aim of improving employee wellbeing and work-life balance, enhancing the AGCO culture and reducing internal costs where possible.

Expansion of AGCO Regulatory Mandate

Marketplace evolution and initiatives such as the federal legalization of recreational cannabis and provincial proposal to expand and establish a competitive online market for igaming in Ontario and the need to create a regulatory frame for single event sports betting have expanded the AGCO’s regulatory authority. 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. As a result, the AGCO works with government in order to request resources as it faces the challenge of managing an expanding mandate. Public expectations and the AGCO’s visibility continue to rise along with that expanded mandate, particularly during the COVID-19 pandemic. These challenges underline the importance of focusing regulatory attention on higher-risk areas so that the AGCO is better equipped to navigate a changing environment.

To help manage the operational and financial pressures related to this expanded mandate, the AGCO continues to implement its long-term direction through its Strategic Plan.

The AGCO’s Strategic Plan outlines the vision and strategic goals for 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. Each strategic goal is associated with several key commitments, as outlined below.

The AGCO Strategic Plan was introduced in 2019 and will be refreshed in 2024. As the AGCO is entering year three of the five-year plan, management is in the process of refreshing our key organizational commitments to help guide our work through the conclusion of the Strategic Plan. The AGCO’s Corporate Plan supports the government’s priorities, including those identified in the Attorney General’s mandate letter.

In addition, the AGCO’s Corporate Plan, which captures the AGCO’s major initiatives and supports its expanded mandate by ensuring that initiatives are prioritized based on alignment with its mandate and resource capacity. As previously mentioned, AGCO’s primary focus for the following years will be continuous improvement with a digital lens, business optimization, and strengthening its financial framework. The Corporate Plan is reviewed by the AGCO’s leadership team on an annual basis to ensure priorities remain accurate and resourced effectively. The AGCO continues to develop its final Corporate Plan for Board approval in March 2022.

Gaming remains a focus as the AGCO moves to implement a new igaming regulatory framework that aims to achieve the Government of Ontario’s objectives of providing consumer choice, ensuring consumer protection, supporting the growth of the legal market, generating provincial revenues, and reducing red tape. As such, igaming work is expected to transition from a project into regular business for 2022. With the legalization of single-event sports betting, the AGCO also now has an important role to play in regulating an enhanced menu of sport and event betting offerings within the new competitive igaming market, as well as in more traditional gaming channels, such as casinos or lottery products. For 2022-23 the AGCO will be rationalizing the Registrar’s Standards for Gaming with the objective of aligning them across the land-based, lottery, and igaming channels.

The AGCO will continue to support the regulatory model through the licensing and registration process for operators and suppliers interested in participating in Ontario’s regulated igaming market. The AGCO will also continue to employ the Registrar’s Standards for Internet Gaming that are fundamental to the AGCO’s igaming regulatory framework and standards-based approach to regulation and will come into force when the regulated igaming market is launched in Ontario. In addition, the AGCO will monitor compliance within the new open competitive igaming market, ensuring player protection, reinforcing responsible gaming measures, and supporting appropriate controls to minimize lawful activity and money laundering. 

Liquor Modernization remains a key priority. The regulations required to modernize the new liquor framework under the Liquor Licence and Control Act, 2019 (LLCA) came into effect in Fall 2021. The AGCO now moves into a phase where we are implementing this modernized and flexible approach to regulating the sale, service, and delivery of liquor. Working closely with the government on these changes, this modernization aligns with priorities set out in the mandate letter.

Primary amongst these changes will be facilitating the transition to a new flexible licence structure and the Interim Registrar’s Standards and Requirements for Liquor. The AGCO will also orient stakeholders to new permissible activities and changes that reduce red tape and burden, such as new retail sales opportunities for manufacturers at industry events. In addition, the AGCO’s focus will remain on facilitating better monitoring and compliance and adopting industry best practices to enhance social responsibility measures. While the implementation of the new liquor framework continues, the AGCO will work closely with industry partners on the development of the Registrar’s Standards for Liquor to replace the Interim Standards and Requirements for Liquor.

The Auditor General Report is a key corporate priority, and the AGCO will continue to implement an agency-wide action plan to respond to the Auditor General of Ontario’s 2020 Value For Money Audit Report. In line with this, the AGCO will continue to conduct reviews and develop action plans to improve the AGCO’s compliance and inspection activities, regulatory processes, public transparency, and cost-recovery. The AGCO will also continue reporting, including financial, to the relevant oversight bodies.

The AGCO is committed to continuing to focus on Diversity, Inclusion, and Accessibility for the fiscal year 2022-2023 and beyond. To date, the AGCO has crafted a DI&A vision that has a two-pronged approach of building a culture of inclusion as an employer, and as a service provider. The AGCO has engaged an external vendor, KPMG, to conduct an organizational assessment, and is committed to the implementation of the strategy. The AGCO’s current DI&A strategy states the following goals: having a workforce reflective of Ontario’s demographic diversity, building an inclusive workplace culture, free of discrimination and harassment, and committing to delivering services in an accessible, culturally aware, relevant, and responsive way.

This strategy and accompanying future work include integrating DI&A programs and measurable actions, facilitating the AGCO’s progression in the DI&A maturity continuum, and making meaningful partnerships with employee groups that enhance recruitment outreach which is reflective of Ontario’s diversity. The agency will also embed cultural awareness and inclusion in an accessible, relevant, sustainable, and responsive way.

Implementation Plan

The AGCO’s corporate planning process is an annual process, and it aligns the agency’s major initiatives to the three strategic goals across all levels of the organization. This planning process tracks and reports on the progress of ongoing initiatives annually while also informing the consideration of new initiatives.

The AGCO’s Corporate Plan captures direction from the Minister’s mandate letter, major initiatives from across the organization, including key commitments and deliverables. The status of Corporate Plan initiatives are updated quarterly and regularly reported to the AGCO Board.

The key Human Resources priorities and initiatives supporting the AGCO’s People First Strategic goal are:

Diversity, Inclusion & Accessibility

• The AGCO is committed to addressing head-on and with honesty the concerns and needs of our diverse workforce, increasing equity, including all racialized communities in Canada, Indigenous peoples, members of the LGBTQ2S+ community, persons with disabilities, and women. A review of the AGCO’s recruitment revealed our processes could benefit from an additional focus on a DI&A lens to ensure fairness and inclusivity. The AGCO is working on developing sustainable partnerships with a range of community resources to improve the diversity of our candidates’ pool. This work is related to having retained KPMG to complete an organizational assessment and develop a DI&A strategy.

Future of Work and Hybrid work model

• The Future of Work initiative is identifying a new strategy and implementation plan that will guide the AGCO’s work arrangements within a vision for the “next normal.” On November 15^th, 2021, AGCO launched its new Hybrid Work model. As of the same date the head office and regional offices reopened, following all public health requirements.

• The Hybrid Work model supports the needs of employees to balance their work and home lives, while maintaining an engaged, productive workforce. It enables AGCO employees, where operationally feasible, to work from multiple locations, such as from home and other locations within Ontario.  

• The AGCO instituted a mandatory COVID-19 vaccination policy that requires all staff, including OPP employees as well as Board members and Horse Racing Appeal Panel members, unless exempt, to be fully vaccinated by November 12th, 2021.

Well-Being Program

• Ensuring employee well-being remains a top priority, on September 1st, 2021, AGCO relaunched the Well-being Program (previously known as the AGCO Wellness Program), focusing on total Well-being (i.e., mental, financial, physical, and social health).

• The program is designed to provide more focus on awareness and available resources. In addition to that, several enhancements have been made to our benefits plan.

igaming

• On July 6th, 2021, the Government of Ontario announced the establishment of iGaming Ontario, a subsidiary of the AGCO, as a separate and distinct legal entity to conduct and manage Ontario’s open and competitive iGaming market. At that time, a number of positions were identified that would play a key role in achieving this goal.

• Extensive work has been completed to ensure timely and efficient recruitment of a number of vacancies. In particular, a recruitment strategy has been developed. All vacancies were scheduled to be filled based on priority and with the goal of attracting and retaining quality staff.

Leadership Assessment and Development / Succession planning

• Earlier in 2021, AGCO launched a new Leadership Assessment and Development program. This multi-step program will identify, assess and develop successors for C-Suite and create a pipeline of future leaders. The AGCO is planning to expand the program beyond executive and director levels to ensure a strong talent pipeline for all key positions in the AGCO.

AGCO’s Compensation Strategy

The AGCO’s compensation strategy, including employee benefits, is targeted to the market median of the Broader Public Sector market (comparator group). In the past, the AGCO has participated in annual market surveys to confirm its compensation competitiveness. The AGCO continues to follow the government’s direction on compensation, providing what was negotiated in the current Collective Bargaining Agreement. According to government direction, the salary ranges for management have not changed since 2017.

The AGCO is compliant with the Broader Public Sector Executive Compensation Framework. The information about the process and its outcomes is posted on the AGCO website. The AGCO provides a comprehensive benefits package including the following:

• 100% Employer-Paid Insured Health Benefits.

• Defined Benefits Pension Plan administered by Ontario Pension Board or the Ontario Public Service Employees Union (OPSEU) Pension Trust.

• Short Term Income Protection to a maximum of six months (130 working days) in the calendar year.

Bargaining Agent

The bargaining unit for the AGCO is OPSEU Local 565, which represents 75% of the AGCO’s workforce.

AGCO Headcount

Organizational Chart

The AGCO continues to invest in technology, leveraging digital platforms to deliver accessible, reliable, secure, and customer-centric services to Ontarians. At the centre of AGCO’s digital-first strategy, in alignment with Ontario’s Digital and Data Strategy, is the iAGCO platform. iAGCO provides online services for alcohol, lottery and gaming, horse racing and cannabis. AGCO will be developing a cloud strategy to increase the resiliency of systems and decrease the delivery times of enhancements and new functionality.

The AGCO recognizes that data is a key pillar supporting the agency’s risk-based approach to regulation. In recognition of this, the AGCO has created an Enterprise Data and Analytics function to support the development of data channels, management, and governance of data to support the AGCO’s vision of becoming a modern, evidence-based regulator with data-driven decision-making.

Cyber attacks are a significant threat to all government entities. The AGCO has created a cybersecurity roadmap and implemented significant controls to assist in the identification of phishing and social engineering attacks. Further investment in people, processes and technology will continue to reduce the possibility of successful cyber attacks, protect personal information and increase the response and recovery capabilities of AGCO.

With the AGCO’s digital-first strategy, there is an increased focus on the confidentiality, integrity, and availability of data and IT systems. Additional investment is being made to ensure the resilience of core systems, such as iAGCO, in the event of a disaster.

In alignment with AGCO’s social responsibility principles, the agency will be looking to reduce its overall carbon footprint by implementing a print reduction strategy.

The AGCO remains committed to partnering and engaging across all the sectors it regulates to understand stakeholder perspectives, identify opportunities to be more effective and efficient, and collaborate with other organizations to improve regulatory outcomes.

The AGCO continues to use its enhanced engagement toolkit to connect with its diverse stakeholder network within Ontario, as well as nationally and internationally, to seek feedback on the issues they care about. One of these tools is a digital stakeholder engagement portal which provides the agency with access to innovative and accessible approaches to engage with its stakeholders and Ontarians. During the COVID-19 pandemic, this tool has been of particular importance, as it has allowed the AGCO to continue comprehensive consultations and engagements virtually rather than in-person to support the public health measure of physical distancing. Incorporating digital tools and programs will be a focus moving forward as it advances the AGCO’s key commitments to promote a digital-first mindset, be customer-centred and responsive, and support innovation and consumer choice.

The AGCO will continue to organize and execute stakeholder engagement activities across all of the sectors it regulates, as well as actively seek out and participate in stakeholder and industry events in an effort to better understand the trends and risks within these sectors, and to improve regulatory outcomes. Of particular focus for the gaming sector are two priorities. The first is for the AGCO to continue working with the Government of Ontario, iGaming Ontario, and stakeholders to establish a safe, open, and competitive online gaming market that will help protect consumers and provide more choice while ensuring a level playing field for new businesses. The second is to commence engagement with the gaming industry on potential refinements to the Registrar’s Standards for Gaming to understand current risks within the industry, to examine opportunities to reduce regulatory burden and support market innovation, as well as to continue to support recovery within the industry from the COVID-19 pandemic. In the liquor sector, the AGCO is committed to supporting licence and permit holders and industry stakeholders during the transition to the new liquor framework under the Liquor Licence and Control Act, 2019. The AGCO will soon begin working to develop the Registrar’s Standards for Liquor that will build the outcomes-based regulatory model enabled by the LLCA. Development of the permanent standards will occur over the next two to three years and will include engagement with the industry.

The AGCO remains committed to building and maintaining partnerships with law enforcement agencies across Ontario, whether through regular contact with members of the Ontario Provincial Police Bureau assigned to the AGCO, through specialized educational seminars and materials on enforcement activities for front-line police officers, or information sharing. With respect to information sharing, the AGCO has continued to engage with regional and municipal police services on the Last Drink Program and is developing a pilot program that would automate information sharing.

Nationally, the AGCO is a member organization of the Association of Liquor Licensing Authorities of Canada and the Canadian Association of Gaming Regulatory Agencies and regularly engages with provincial and international colleagues in the cannabis regulation sphere. Internationally, the AGCO continues to be a well-respected member organization of both the International Association of Gaming Regulators and the North American Gaming Regulators Association. In the horse racing sector, the AGCO is a member of the Association of Racing Commissioners International, the umbrella organization of the official governing and rule-making bodies for professional horse racing, which sets international standards for racing regulation.

The AGCO will continue to leverage existing relationships and to proactively establish new ones with other regulators and organizations in order to promote collaboration, information sharing and enhance due diligence processes. This includes leveraging and strengthening existing memoranda of understanding, as well as establishing new agreements.

The AGCO will remain strategic in maintaining, engaging and developing relationships and partnerships with third parties within Ontario, as well as nationally and internationally, given the global elements of these regulated sectors.

The AGCO’s corporate communications function provides a range of services and products that help the agency deliver on its strategic objectives in a way that cultivates relationships of trust, understanding and support with its internal and external stakeholders.

The AGCO’s “Digital by Default” communications approach places a priority on digital communications to inform and engage with the public, its customers, and employees by leveraging digital channels and taking advantage of the benefits of rich media to support the agency’s overall modern regulatory approach.

Communication activities that will be a focus next fiscal year include media relations, digital communications for stakeholders, channel content development, as well as communications planning and support for agency initiatives, and stakeholder engagement activities. These services help the AGCO provide stakeholders with the information that matters to them at the right time and in the right place while acting in the public interest.

The agency continuously monitors its communications strategies and products for usability, engagement, and in response to changing government priorities. The AGCO continues to refine its communication approaches and has developed rapid response strategies to quickly support government announcements and distribute important information in a timely manner. With the onset of the COVID-19 pandemic, the AGCO quickly refocused its communication efforts to support the government’s response and used its established channels to inform the public, licensees, and registrants about the changes, restrictions, and public health measures put in place.

Initiatives and Products

Rapid response to emerging issues

Working collaboratively with policy, legal operations, and compliance services, the corporate communications team has established processes to reduce the normal turnaround time to create and distribute information in a matter of hours. This can include drafting news releases, information bulletins, direct emails to licensees and registrants as well as fact sheets for AGCO Customer Service and Compliance Officials. These processes include French translation for all public-facing communications products.

AGCO Website

AGCO’s website, agco.ca, remains a primary information and communication channel for the agency and its stakeholders. This site is also the gateway to iAGCO, the agency’s online service delivery portal. The website is compatible with tablets and mobile devices for ease of use. The agco.ca site provides information for all lines of business and is updated regularly to reflect new programs and changes in government policy. The website also hosts educational videos to help clarify important processes and changes.

The AGCO generates analytics reports that measure a number of key website performance indicators. These reports help gauge how well the site is contributing to business objectives related to education, awareness, and compliance. The AGCO also captures direct user feedback from users to better understand how easily users can find the information they came for. All of this is with the goal of continually improving and expanding the site to meet the needs of the AGCO’s stakeholders.

AGCO Engagement Website

The AGCO also maintains an engagement website, connectagco.ca. The site allows interested stakeholders to follow and participate in engagement opportunities to provide input on AGCO projects, policies, and initiatives.

Social Media

The AGCO is taking a more proactive approach to community engagement and exploring opportunities by expanding its social media footprint in a meaningful and manageable way. The number of followers to the AGCO’s social media channels continues to grow. Every day, the AGCO publishes information about new applications for liquor licences and for cannabis retail stores with links to the process for the public to share their views or concerns.

To align with the Ontario Public Service’s digital objectives, the AGCO continues to pursue a digital first strategy and is implementing relevant tools to promote an improved digital footprint by 2022.

Ongoing Programs

Media Relations

With the introduction of Ontario’s open and competitive igaming market, licensing of retail cannabis stores, the modernization of liquor, and changes to horse racing regulation, the number of AGCO media inquiries continues to rise. The AGCO is now receiving over 400 media inquiries each year, including those from newspapers, radio, magazines, web-based news blogs and television. The agency strives to respond to these requests in a timely and transparent way.

The AGCO’s Accessibility Plan and Policies are developed in accordance with the Integrated Accessibility Standards Regulation (IASR) under the Accessibility for Ontarians with Disabilities Act, 2005. The Accessibility Plan and Policies outline the AGCO’s commitment and strategy to prevent and remove barriers and improve opportunities for internal stakeholders and the public with disabilities and address the current and future requirements of the Accessibility for Ontarians with Disabilities Act, 2005. In the following year, the AGCO will conduct an annual review of our accessibility policies as part of a broader commitment to diversity, inclusion, and accessibility going forward. Ongoing compliance with the Accessibility for Ontarians with Disabilities Act, 2005 and IASR is a corporate priority for the AGCO. The AGCO is committed to making all of its communications and publications accessible and continuing to meet the Web Content Accessibility Guidelines.

The AGCO is always looking to consult with people living with disabilities to understand where there may be opportunities for continuous improvement. These consultations will continue to assist the AGCO in better understanding the barriers that persons with disabilities may experience when accessing services provided by the AGCO. This information will also inform mitigation strategies as part of the ongoing review and development of the AGCO’s Accessibility Plan and Policies.

All AGCO employees are trained on the requirements of Ontario’s accessibility laws, including the 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 Horse Racing Appeal Panel members, have a good and appropriate understanding of accessibility and will continue to perform their duties and provide services to the AGCO’s diverse range of stakeholders.

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.

Multi-Year Operating Budget

*2021-22 Budget and YE forecast (as of Q3 2021-22) do not include expenditures paid on behalf of iGaming Ontario. Forecasted iGaming Ontario direct costs are $11.3M.

** Budgets are inclusive of changes requested through the government’s annual budget request process.

*** This represents fee revenue that goes into the Consolidated Revenue Fund.

**** The increase in revenue during the 2023-24 budget is due to the adoption of a new accounting standard PS3400 – Revenue recognition. There could be changes in timing of the revenue recognition depending on the nature of the revenue.

AGCO Revenue – Key Explanations

• The revenue forecast in 2021-22 is higher than the 2021-22 budget mainly due to forecasted AGCO igaming regulatory revenue from operators and suppliers of $2.4M. The licensing and registration process for operators and suppliers interested in participating in Ontario’s regulated igaming market commenced in September 2021.

• Over the next three fiscal years, revenue is expected to increase as industries recover from the COVID-19 pandemic and as demand for new applications and renewals from cannabis retail licenses and authorizations continues.

• The increase in revenue in 2023-24 is as a result of the new accounting standard PS3400 which mandates revenue recognition based on when licenses are issued starting in FY 2023-24.

AGCO Expenditures – Key Explanations

• Services include expenditures related to due diligence costs and related recoveries. These costs are incurred to acquire external service providers to assist in Eligibility Assessments for Gaming Modernization and private cannabis retail, The AGCO will be transferring $8.1M of the $8.6M budget for expenditures in services and recoveries related to Gaming Modernization Eligibility Assessments in 2021-22 to 2022-23; the remaining $0.5M is expected to be fully spent in 2021-22. The 2022-23 budget includes the $8.1M that is being transferred. There is no budgeted amount for this item in 2023-24, resulting in a lower budget for that year.

• The overall AGCO expenditure variance in 2021-22 of ($16.7M) is mainly due to:

  • Forecasted igaming Regulatory and Shared Services costs (including Salaries and Wages and Benefits) totaling $10.4M that are currently being risk managed.

  • Forecasted decrease in recoveries of $30.3M as a result of a gradual shift in regulatory work to non-recoverable sectors and the COVID-19 pandemic - regulatory fees charged to casino service providers as well as OLG cGaming were waived for the first half of 2021-22. Horse racing fees were also waived for approximately the first 2.5 months in FY 2021-22 due to racetrack closures.

  • Management is working with the government to secure in-year funding for 2021-22.

AGCO Capital Assets – Key Explanations

• The AGCO’s Capital Budget includes $3.5M approved in Capital Assets in 2021-22 for Regulatory Assurance Solution (RAS) betterments – to support and enhance iAGCO for the new iGaming line of business, liquor reform, and other changes (e.g., cannabis renewals).

• The Capital Budget also includes an increase of $0.2M in IT Hardware to equip AGCO staff supporting iGaming. AGCO IT hardware includes the purchase of personal computing devices, mainframes, data network equipment, and storage devices.

• A request to transfer $1.6M in Capital Assets from 2021-22 to 2022-23 was submitted in the 2022-23 Multi-year Plan.

Measuring performance enables the AGCO to improve program effectiveness by setting targets, assessing data, and evaluating the results. Through continuous evaluation and feedback, the AGCO is able to achieve key objectives that are identified in the AGCO Strategic Plan.

The results from these measures, shown in the table below, demonstrate that in 2021-22, while the AGCO was recovering from the peak of the COVID-19 pandemic, it has successfully and will continue endeavouring to meet or surpass minimum agency targets in most respects. The achievement of these measures results from a number of overarching projects and initiatives at the AGCO, including:

• the continuous optimization of iAGCO;

• 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 “Future of Work” model that provides the tools and flexibility necessary for a positive employee experience post-COVID; and

• the development of a strategy to address diversity, inclusion, and accessibility at the AGCO.

The AGCO is committed to further developing an agency-wide performance strategy. To meet this commitment, the AGCO has created a new Business Optimization and Insights unit, which will continue to engage in multi-year goal setting and a refinement of its approach to linking resource planning and performance measurement. The goal is to develop a robust performance measurement framework at the AGCO to support transparency, accountability and regulatory compliance.

Modern Regulator

Digital-First - AGCO provides user-based services and information through multiple windows and service channels anytime and anywhere.

Service Excellence

Service Experience - AGCO employs service-centered design that optimizes the service experience, engages customers proactively, and identifies opportunities for improvements.

Value for Money- AGCO ensures value per transaction (internal and external) with a focus on streamlining processes and reducing regulatory burden.

People First

Employee Experience - The level of engagement and enablement is directly correlated with higher productivity, increased motivation, and job satisfaction.

 Diversity, Inclusion and Accessibility- The cultivation of a workforce that is reflective of Ontario’s diversity, an inclusive culture free of discrimination and harassment and service delivery that is accessible, culturally aware, relevant and responsive.

¹ Includes applications and complaints.

² Includes new, renewal and amendment applications completed on the iAGCO portal.

³ COVID-19 has caused: a) a decrease in applications, which has allowed AGCO staff to address the existing backlog, causing a one-time increase in the application turnaround timeframe; and b) a decrease in auto-issued applications (SOPs), which typically have very short turnaround times. An open market for cannabis licensing and authorizations was introduced in 2020, which requires due diligence and therefore results in higher turnaround time.

⁴ Average based on AGCO website, iAGCO portal and telephone calls.

⁵ iAGCO survey results fluctuated significantly over the past year due to changes in service volumes directly related to COVID restrictions.

⁶ These numbers were affected by COVID-19. When looking at Q1: 84.3%; between March and September 30th, the number dropped to 51.8%.

⁷ Percentage of calls that were resolved to full customer satisfaction at the first point of contact by the contact centre.