Conflict of Interest (H-08-01)

Date: January 4, 2008

The policies and procedures in this Directive are to be implemented under the following programs:

• Local Housing Corporation
• Non-Profit Program
• Co-op Program

Background

Under the Social Housing Reform Act, 2000, and O. Reg. 339/01, s. 4, a Housing Provider is responsible to appropriately address any potential or actual Conflicts of Interest.

O. Reg. 339/01, Section 4 established new standards and definitions for Conflict of Interest. The full text of the relevant sections of the regulation is attached as Appendix ‘A’. The regulations replace the Ministry of Municipal Affairs and Housing Directive 97-04.  The following Directive is not intended to replace O. Reg. 339/01 s. 4, but simply to elaborate a recommended approach in terms of compliance with Section 4. The Directive also sets out The City of Kingston’s recommendations for a Housing Provider’s purchasing policy along with a sample Conflict of Interest Policy or By-Law.

Definition

For the purposes of this Directive the following definition will apply.

The Social Housing Reform Act, 2000 and Ontario Regulation 339/01, Section 4 (2) states:

A Conflict of Interest exists if any of the following situations occur:

1. The personal or business interests of a director, officer, agent or employee of a Housing Provider are in conflict with the interests of the Housing Provider.
2. A personal gain, benefit, advantage or privilege is directly or indirectly given to or received by a director, officer, agent or employee of the Housing Provider or a person related to one of them as a result of a decision by the Housing Provider.

Generally, a Conflict of Interest exists where an actual or potential Conflict of Interest is declared and the Board of Directors and/or the Service Manager has confirmed that an actual pecuniary interest or Conflict of Interest does in fact exist and a plan to resolve or mitigate the Conflict of Interest has been proposed by the Housing Provider and approved by the Service Manager. (It should be noted that even the perception of Conflict of Interest must be avoided and in some cases it may in fact be necessary to declare and appropriately resolve a perceived Conflict of Interest).

Action to be taken

Housing Providers must avoid any situation where an actual or potential Conflict of Interest may arise or exist. This can be accomplished by following the best practices set out in the sample Conflict of Interest By-Law for Non- Profit and Co-operative Housing Providers (see Appendix ‘B’).

This includes at a minimum:

1. At every board meeting, general members meeting or annual general meeting, the opportunity to declare an actual or potential Conflict of Interest should be a standing item on the agenda.
2. All Board members, officers, employees and agents of the Housing Provider should be made aware of the Housing Provider’s Conflict of Interest Policy or By-Law when they join the organization and must sign an acknowledgement form confirming they have received, read and understand the Conflict of Interest Policy\By-Law and Directive H-08-01.
3. Resolving all declarations of a potential, perceived or actual Conflict of Interest in the manner indicated in the Housing Provider’s approved Conflict of Interest Policy\By-Law.
4. Where a Conflict of Interest is on-going or not easily resolved, the Housing Corporation will be required to have clear, concise and written procedures detailing how an on-going Conflict of Interest is declared, isolated and resolved which must be approved by both the Board and the Service Manager.
5. Establishing a Purchasing Policy\By-Law which gives clear standards for how goods and services are to be acquired.
6. Including a clause in all contracts and purchase orders of $14,999.99 (or $19,999.99) or more, that permits the Housing Provider to terminate the contract if a Conflict of Interest is determined to exist by the Housing Provider or Service Manager.
7. Housing Providers are to maintain a Conflict of Interest file, which should include a copy of the revised Conflict of Interest Policy\By-Law, a copy of all signed Conflict of Interest Acknowledgement Forms, all declarations of an actual or potential Conflict of Interest, along with the process undertaken by the Housing Provider and Service Manager to resolve the declared or actual Conflict of Interest, as well as any other appropriate documentation.
8. Housing Providers are required to pass a revised Conflict of Interest Policy\By-Law and submit a copy to The City of Kingston, Housing Programs, along with a copy of the Board motion to repeal the previous Conflict of Interest By-Law, within 30 days of their AGM in 2008.
9. Once the revised Conflict of Interest Policy\By-Law has been passed, all Board members, officers, employees and agents are to sign the Conflict of Interest Acknowledgement Form confirming that they have received, read and understand the Conflict of Interest Policy\By-Law.

Resources

The City of Kingston has reviewed the sample Conflict of Interest By-Laws developed by the Ontario Non-Profit Housing Association (ONPHA) and the Co-operative Housing Federation – Ontario Region.  The ONPHA and Co-op sample Conflict of Interest By-Laws have been modified by the Service Manager in order to address local priorities. The modified Conflict of Interest By-Law is enclosed as Appendix ‘B’. Housing Providers have the option to pass a revised Conflict of Interest By-Law or to implement a Board approved Conflict of Interest Policy.

Where a Housing Provider chooses to pass a Conflict of Interest By-Law based on the sample provided, the Housing Provider is simply required to provide a copy of the approved By-Law to the Service Manager within 30 days following their Annual General Meeting in 2008.

Where a Housing Provider decides to develop their own Conflict of Interest By-Law or to use either the sample Conflict of Interest By-Laws developed by Ontario Non-Profit Housing Association (ONPHA) or the Co-operative Housing Federation, the By-Law should substantially comply with the Service Manager’s sample By-Law and include local priorities, a purchasing policy along with the requirements of Section 4 and 6 of O. Reg. 339/01.   A copy of the amended By-Law must be provided to the Service Manager for review prior to being approved by the Board.

Where a Housing Provider chooses to implement a Conflict of Interest Policy, the policy should be based
on the wording contained in the sample Conflict of Interest By-Law and include local priorities, a purchasing
policy along with the requirements of Section 4 and 6 of O. Reg. 339/01. A copy of the Board approved
Conflict of Interest Policy must be provided to the Service Manager within 30 days following approval and
no later than 30 days following their Annual General Meeting in 2008.

Further, all Housing Providers with a current Conflict of Interest By-Law based on Directive 97-04 must
repeal the current Conflict of Interest By-Law in the manner set out in the General By-Law (By-Law No. 1).
A copy of the Board motion to repeal the Conflict of Interest By-Law must be provided to the Service
Manager within 30 days following their Annual General Meeting in 2008.

Process

As required in Section 4 (6), O. Reg. 339/01, the Chair of the Board of Directors is required to notify the
Service Manager in writing of every declared actual or potential Conflict of Interest.

When a declared Conflict of Interest (which is not of a routine nature) is reported to The City of Kingston,
Housing Programs, the following steps will take place:

1. The Director of Community and Family Services or his/her delegate will review the material
   provided from the Housing Provider including:
   • Description of the potential or perceived Conflict of Interest;
   • The Housing Provider’s recommendation on how the Conflict of Interest should be handled;
   • The Director of Community and Family Services or his delegate may require additional
     information on the steps taken or not taken by the Housing Provider to avoid the potential or
     perceived Conflict of Interest.
2. The Director of Community and Family Services or his/her delegate will make the final decision
   regarding how the Housing Provider has addressed the declared Conflict of Interest or on any
   actions required by the Housing Provider in order to resolve the Conflict of Interest to the
   satisfaction of the Service Manager.
3. The decision of the Director of Community and Family Services or his/her delegate will be provided
   in writing to the Chair of the Board of Directors of the Housing Corporation.
4. The decision of the Director of Community and Family Services or his/her delegate is final.

Note: For the purposes of this Directive the Service Manager need not be notified of any declared
Conflict of Interest which is routine in nature and/or easily resolved. As an example, a routine Conflict of
Interest declaration would include an agenda item discussed at a Board meeting where an actual or
potential Conflict of Interest is declared based on a specific agenda item and is then resolved by the
director or member removing themselves from the discussion (and from the meeting room) and any vote on
the matter. In this case, the declaration of a Conflict of Interest and the action of the director or member
must be clearly recorded in the board minutes and a copy of the approved minutes retained on the Conflict
of Interest file. A copy of every declared Conflict of Interest (both resolved and unresolved) must be kept
on the Housing Provider’s Conflict of Interest file for later reference by the Service Manager.

Reference

• Social Housing Reform Act, 2000
• O. Reg. 339/01 s. 4, Conflict of Interest

Cheryl Hitchen
Manager, Community Programs Administration Unit

The following have been sent this Directive:

• Lance Thurston, Commissioner, Community Development Services Group
• Greg Grange, Director, Community and Family Services Department
• Liz Savill / Marian VanBruinessen / Susan Beckel, County of Frontenac
• Alan McLeod, Senior Legal Counsel, Legal Division
• Supervisors, Housing Programs

If you have any questions, please contact a Housing Programs Administrator, Housing and Social Services Department.

Appendix 'A'

Excerpt O. Reg. 339/01

Conflict of interest

1. This section applies to a Housing Provider in addition to the provisions of the Act listed in subsection 3 (1) to which the Housing Provider is subject. O. Reg. 339/01, s. 4 (1).
2. A Conflict of Interest exists if any of the following situations occur:
   1. The personal or business interests of a director, officer, agent or employee of a Housing Provider are in conflict with the interests of the Housing Provider.
   2. A personal gain, benefit, advantage or privilege is directly or indirectly given to or received by a director, officer, agent or employee of the Housing Provider or a person related to one of them as a result of a decision by the Housing Provider. O. Reg. 339/01, s. 4 (2).
3. A director, officer, agent or employee of the Housing Provider shall not enter into any situation, arrangement or agreement which results in a Conflict of Interest. O. Reg. 339/01, s. 4 (3).
4. Directors, officers, agents and employees of the Housing Provider must notify the chair of the Board of Directors of the Housing Provider of every potential or actual Conflict of Interest no later than the first meeting of the board after the director, officer, agent or employee becomes aware that he or she has entered into a situation, arrangement or agreement that results in or may result in a Conflict of Interest. O. Reg. 339/01, s. 4 (4).
5. The Board of Directors shall consider the notice given under subsection (4) no later than the second meeting of the board after the notice is given and consideration of the notice must be reflected in the minutes of the meeting. O. Reg. 339/01, s. 4 (5).
6. The chair of the board shall notify the Service Manager in writing of the receipt of every notice under subsection (4) and the Board of Directors shall resolve every Conflict of Interest or potential Conflict of Interest to the satisfaction of the Service Manager. O. Reg. 339/01, s. 4 (6).
7. Despite subsection (3), a director, officer, agent or employee or a person related to one of them may directly or indirectly receive a gain, benefit, advantage, privilege or remuneration from the Housing Provider if all of the following conditions are satisfied:
   1. A notice of the Conflict of Interest or potential Conflict of Interest is given in accordance with subsection (4).
   2. The Service Manager agrees that there is no reasonable alternative for the Housing Provider other than entering into the situation, arrangement or agreement that results in or may result in the Conflict of Interest. O. Reg. 339/01, s. 4 (7).
8. For the purposes of this section, a person related to a director, officer, agent or employee includes a parent, spouse, same-sex partner, child, household member, sibling, uncle, aunt, nephew, niece, mother-in-law, father-in-law sister-in-law, brother-in-law or grandparent, or a person with whom the director, officer, agent or employee has a business relationship. O. Reg. 339/01, s. 4 (8).