Self-regulation in licensing in Canada: How do professionals police themselves?
Imagine if you, as a prospective home buyer in a hot real estate market, felt pressured to make an offer on a property that had not yet received a full home inspection. What if you made your offer, obtained the home, and found the property needed crucial repairs? Who would be to blame? Some would argue that the home inspection industry and its self-regulatory practices are at fault for such occurrences, but the issue is not always so simple.
What is self-regulation?
Though the idea of regulation calls to mind federal involvement in business operations, many industries hold their practitioners accountable without government intervention, thanks to the formation of what are called self-regulatory bodies.
The nature and prevalence of self-regulation varies from country to country, so for the purposes of this post we will only be discussing self-regulation as it pertains to professional licensing in Canada. We will focus on the topic with respect to professions in the U.S., the U.K., and Australia in blog posts to come.
What powers do self-regulators have?
Self-regulation means these organizations – often called regulatory bodies in Canada and agencies in the U.S. – are governed by elected professionals (chosen by licensees) that sit on boards or councils to oversee operations. Self-regulating bodies make decisions about:
- Who enters a profession
- What the standards of admissions are
- What restrictions professionals must practice under
- Standards they must meet while practicing
- When a professional can no longer practice in their chosen field
In some cases, these organizations can quite literally come to the doors of practitioners who are under investigation of misconduct to conduct searches and seizures in an effort to collect and preserve evidence. Regulators have been granted substantial power, through their governing legislation, to enforce their standards, but there are procedural safeguards also in place to ensure the regulator does not overstep their bounds.
It is important to note that regulators only hold power over their licensees. If a professional is stripped of their license to practice and they continue to do so anyway, the transgression may enter criminal-offense or quasi-criminal territory, and penalty enforcement becomes the responsibility of the provincial government. The self-regulating body does not direct or control this process.
Who holds self-regulators accountable?
Self-regulating bodies act as their own police, judge, and jury. While self-regulatory bodies are predominantly independent of government, they remain accountable to government, and they are ultimately what are called “creatures of statute” – they do not exist without government enacting legislation. This accountably often lies in the form of reporting functions rather than direct intervention.
For example, health regulators in Ontario must submit an Ontario Fairness Commissioner (OFC) report yearly, detailing how they have made efforts to ensure their licensing processes are fair. The OFC considers four basic principles when evaluating licensing processes across different professions:
- Transparency – ensuring rules and guidelines are easily understandable for applicants and making sure that applicants have access to all necessary information throughout the process.
- Objectivity – ensuring consistency across all licensing decisions, regardless of the individual making the decision and the context in which the decision is made.
- Impartiality – ensuring that licensing processes are free of biases that may stem from, for example, conflicts of interest and limited understanding of issues related to diversity and equality.
- Fairness – ensuring overall that licensing processes are rational and “above board,” and that they do not place unnecessary barriers to entry in the way of otherwise qualified applicants.
The government can also, at times, amend legislation to take powers away from a regulator. In more extreme cases, government can step in to directly intervene in the affairs of a self-regulating body, like they did with the College of Denturists of Ontario in 2011, when they appointed a supervisor after receiving numerous complaints about the board/council.
The theory behind self-regulation
There are two basic arguments for why licensing in various professions should be self-regulated:
1. Only experts in each field can truly articulate the standards required to obtain licensing (and those required to maintain it)
The average government official is not likely to have the same level of knowledge regarding best practices in healthcare as any given doctor would. By self-regulating, professionals can ensure that the rules that govern them are written by the people who know their profession best.
2. Professionals have an interest in maintaining public confidence
Though it takes a backseat to the first argument, the idea that professionals want to assure the public that they are in good hands is an important driving force behind self-regulation. The average person can rest easier knowing their doctor’s license is approved and maintained by boards comprised of other doctors, rather than by the local or federal government.
While some professionals may balk at the idea of being regulated and having duties and obligations imposed on them, self-regulation is considered a privilege. Where a profession is self-regulated, the government (and by extension the public) has endowed professionals with a level of trust to govern themselves accordingly without government interference. Self-regulated professions are seen as being in a position of trust and power, not just in society, but with their individual clients.
What industries are self-regulated?
Generally, industries that are self-regulated are those that, if left unregulated, pose a risk to the public. Professional fields in Canada that are governed (in terms of licensing) by self-regulatory bodies include healthcare, legal practice, accounting, engineering, and education.
Since the late 20th century, these fields have expanded to include professions like nursing and dentistry. In 2012, new colleges were proclaimed to govern licensing practices in homeopathy, psychotherapy, traditional Chinese medicine, and kinesiology.
Interestingly, paramedics as a collective have historically been turned down for the opportunity to self-regulate. The reasoning behind this denial is that as part of the larger healthcare ecosystem, paramedics are already governed in their day-to-day practices by healthcare self-regulation standards. The rules written for doctors and hospitals include language that ostensibly covers everything relevant to the average paramedic.
How can self-regulation fail?
A CBC article published in May 2021 details a potential crisis for new homeowners and inspectors across Ontario. As the province’s real estate market has grown rapidly over the past year, property buyers have found themselves increasingly pressured to make offers on homes without ordering full home inspections. Len Inkster, executive secretary of the Ontario Association of Certified Home Inspectors (OntarioACHI), says he believes that less than 25% of home sales are being inspected at this moment.
The consequences of such a rushed sales process are fairly obvious – without comprehensive home inspections, buyers incur the risk of obtaining homes that fall short of quality standards. Full home inspections have been increasingly replaced with “limited-scope inspections,” which are often commissioned by realtors representing sellers during the pre-listing phase. Thanks to limited-scope inspections, buyers can be led to believe their prospective home has been adequately inspected (and thus dissuaded from commissioning a full inspection) before making an offer.
Leaders in the home inspection industry argue that this issue has arisen in part because of their limited power as self-regulators. If legislation were passed to increase the power of self-regulatory bodies in the home inspection field, professional associations would be better equipped to “weed out” subpar inspectors and thus ensure higher quality standards across the industry. Organizations like Ontario ACHI have spent years pushing for legislation to give home inspectors more self-regulatory power within their field.
The future of self-regulation
Typically, as industries grow and develop, they tend to move away from government regulation and toward self-regulation. The reasoning here is that by self-regulating, professional regulatory bodies can shift the administrative and cost burden away from governments while also promising that quality standards are upheld and enforced by highly educated experts within a given field.
However, self-regulation faces many critics. Where a regulator is acting (or seen to be acting) in a manner that is more protectionist of the profession than of the public, calls for ending self-regulation come from many corners. In the case of Ontario health regulation, while the government did not end self-regulation, they made significant amendments to the Regulated Health Professions Act in 2014 which made some of the College processes around complaints and investigations more prescriptive.
For example, health colleges in Ontario formerly only had to post the results of disciplinary hearings. Now, many other decisions about investigations – decisions that have not been subject to a hearing – must also be published on the public registers. The effort here was to grant the public more access to information about the history of their chosen or potential practitioner in a timely fashion.
It’s impossible to predict the future, but it stands to reason that self-regulation will continue to play a key role in licensing practices across many industries for years to come.