Ontario Updating Executive Compensation Framework
Province Amending Regulation While Maintaining Transparency and Accountability
Ontario has amended the Executive Compensation Framework regulation to ensure broader public sector organizations can benchmark compensation for senior nuclear technical experts against other jobs that require the same unique skills and experience. This amendment will ensure Ontario is able to attract and retain the highly specialized executive talent necessary to safely operate its large nuclear facilities and generate Ontario's single largest source of emissions-free electricity.
The framework regulation came into force on September 6, 2016 and applies to all designated employers under the Broader Public Sector Executive Compensation Act, 2014. It requires designated employers to cap salary and performance-related pay for their executives by selecting appropriate comparators from within the Canadian public sector and conducting a comparative analysis. The resulting caps must not exceed the market median of comparable positions at comparator organizations. With the approval of the President of the Treasury Board, employers may include private sector or international comparators in their analyses.
In the course of implementing the framework regulation, it became clear that the only public sector executive positions in Canada that require the commercial and technical nuclear expertise necessary to safely operate large nuclear facilities are at Ontario Power Generation (OPG). This expertise includes specific recognition from nuclear regulators and decades of experience in safe nuclear operations.
The amendment will allow OPG, as Canada's only large public sector nuclear generator, to compare solely to organizations outside the Canadian public sector for their senior leadership roles that require commercial nuclear expertise. The amendment applies only to positions that require this specialized senior nuclear technical expertise.
All other BPS executive positions, including non-nuclear executive roles at OPG, continue to require comparators from within the Canadian public sector. In addition, all designated employers including OPG must continue to consult with the public when determining executive compensation programs and must post program details to their websites. These requirements will ensure that executive compensation in the broader public sector is accountable and transparent.
- The framework amendment will apply to approximately 12 executive positions at OPG, which require specialized commercial nuclear expertise.
- The Broader Public Sector Executive Compensation Act, 2014 was proclaimed on March 16, 2015 and applies to approximately 340 employers, including hospitals, school boards, universities, colleges, and designated provincial agencies.
- Designated executives under the legislation are employees and office holders eligible to receive $100,000 or more in a calendar year, including CEOs, presidents, vice-presidents, chief officers, directors of education, and supervisory officers at school boards.
- Executive compensation at hospitals, school boards, colleges, universities, and hydro entities has been restrained under the Broader Public Sector Accountability Act, 2010 since March 31, 2012. All elements of compensation have been frozen, including base salaries.
- The existing freeze on salaries for executives under the Broader Public Sector Accountability Act, 2010 remains in effect for a designated employer until the employer posts their final executive compensation program to their public website.
“This timely amendment will enable OPG to attract and retain the highly specialized executive talent it needs to ensure the safety of Ontario’s nuclear power generation system and continue to deliver on key nuclear projects such as the Darlington Refurbishment.”