The Healthcare Staffing Agencies Act, 2023 requires hospitals and long‑term care homes in most Ontario municipalities to prepare publicly available plans to reduce and ultimately eliminate spending on private healthcare staffing agencies on a prescribed timeline. It also changes the market for agencies by requiring new entrants to operate as not‑for‑profit entities and by subjecting agencies that receive substantial government funding to multiple forms of public oversight.
The bill constrains how agencies compensate and recruit staff (a pay cap and a ban on poaching), demands transparency around agency charges, and creates criminal penalties and financial limits that aim to redirect agency fees back into the public system. For health system managers and compliance officers, the Act replaces market flexibility with a regulatory regime that shifts short‑term costs into statutory planning, oversight and enforcement obligations.
At a Glance
What It Does
Mandates that hospitals and long‑term care homes create public plans to reduce agency spending on a set schedule ending in elimination within 24 months, requires newly established agencies to be not‑for‑profit, and imposes transparency, pay and recruitment controls on agencies.
Who It Affects
Applies directly to hospitals and long‑term care homes operating in municipalities above the Act’s population threshold, newly formed and existing healthcare staffing agencies that place staff in those facilities, and oversight bodies that gain investigatory responsibility where government funding to an agency exceeds a set threshold.
Why It Matters
This bill reorders how Ontario manages workforce shortfalls: it replaces reliance on private agencies with statutory reduction targets, folds large‑funded agencies into public accountability frameworks, and constrains agency compensation and recruitment practices — all of which will affect procurement, workforce planning and vendor relationships across the sector.
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What This Bill Actually Does
The Act starts by defining a healthcare staffing agency as any agency that supplies workers to hospitals or long‑term care homes for a fee. Its central operational requirement is a planning duty: every hospital and long‑term care home in communities above the bill’s low population threshold must draft a plan, publish it publicly, and update it every six months.
Those plans must explain recent agency expenditures, non‑agency staffing expenditures, and set out measures to maintain safe, humane patient care while transitioning away from agency use. The senior nursing leader at each institution must take a leadership role in preparing the plan.
The drafting timeline is short: plans must be developed within six months of the law coming into force and then refreshed semi‑annually. The plans are not purely aspirational — the Act prescribes progressively tighter limits on agency spending based on municipality size, with institutions expected to reduce agency reliance quickly and stop using agencies entirely within a 24‑month horizon.
For smaller facilities the early caps are looser, but every facility faces the requirement to eliminate agency use after two years.On the supply side, the bill bars new staffing firms from operating as for‑profit entities: any agency created after commencement must exist as a not‑for‑profit under Ontario’s Not‑for‑Profit Corporations Act. The Act also sets a funding threshold that triggers public oversight: agencies that receive aggregate government payments above that threshold become subject to review by multiple provincial oversight offices and must place employees on the public Sunshine List.The Act tightly regulates how agencies interact with institutional staff.
It caps what agencies can pay assigned workers relative to the host institution’s prevailing rates, requires transparency and direct payment for transport, accommodation and per diems, forbids active poaching of institution employees, and prohibits agencies from assigning workers who are currently employed by — or who left within the previous 12 months from — the same or adjacent Ontario Health Team. Violations of the anti‑poaching rule carry significant fines, and collected fines are earmarked to fund hospitals and long‑term care homes.
The Minister retains regulation‑making power to set limits for certain charge categories, and the Act comes into force on Royal Assent.
The Five Things You Need to Know
Hospitals and long‑term care homes must develop a publicly available plan within six months of proclamation and update it every six months thereafter.
The Act sets tiered caps on agency spending by municipality size and requires all affected facilities to cease using agencies entirely after 24 months.
Any healthcare staffing agency established after the law comes into force must operate as a not‑for‑profit corporation under Ontario law.
An agency that receives more than $400,000 in total from the Government of Ontario or its transfer payment agencies becomes subject to oversight by the Auditor General, the Patient Ombudsman, the Ontario Ombudsman and the Integrity Commissioner, and must put its employees on the Sunshine List.
The bill bars agencies from paying assigned workers more than 10% above the host institution’s existing rate, requires public disclosure and direct payment of transportation/accommodation/per diem charges (subject to prescribed limits), bans poaching with fines up to $1,000,000, and forbids assigning workers who left institutional employment within the prior 12 months in the same or adjacent Ontario Health Team.
Section-by-Section Breakdown
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Definition of healthcare staffing agency
A single statutory definition governs the scope of the Act: any agency that supplies workers to hospitals or long‑term care homes for a fee. That definition is broad and will capture traditional temporary staffing firms as well as intermediary organizations that place clinicians for short‑ or long‑term assignments. Compliance officers should treat this as a wide net: contractual form (vendor, temp agency, third‑party provider) will not necessarily change coverage.
Planning duty for hospitals and long‑term care homes
This multi‑subsection creates a mandatory planning process. Facilities in municipalities above the Act’s population threshold must create, publish and semi‑annually update a plan that quantifies past agency spending, contrasts it with non‑agency staffing spend, and lists measures to protect care quality during the transition. The law assigns operational responsibility to the facility’s nursing leadership, making clinical staffing strategy—rather than procurement alone—the focal point. The public‑availability requirement exposes institutions to scrutiny from boards, unions and local communities.
Prescribed spending limits and elimination schedule
The Act lays out three population bands with progressively stricter percentage limits on agency spending at six and 12 months, and a universal requirement to stop using agencies after 24 months. The banding recognizes scale differences but sets a uniform end‑state: complete cessation. Practically, this forces facilities to invest in recruitment, retention and internal surge capacity; plans must justify how patient safety will be preserved while reducing agency reliance.
Not‑for‑profit requirement for newly formed agencies
The Act prevents new entrants from adopting a for‑profit corporate form by mandating that any agency created post‑commencement incorporate as a not‑for‑profit under Ontario law. That reshapes the business model for new providers and is likely to deter private capital entry; it may also incentivize existing for‑profit firms to restructure or create affiliated entities to operate within the new constraint.
Oversight triggered by government funding
If an agency receives government funds above the specified aggregate threshold, it becomes subject to oversight by four provincial accountability offices and must include employees on the Sunshine List. The provision links public funding with public accountability; the chosen threshold determines how many agencies fall under this regime and can create incentives around structuring payments or contractual relationships to avoid the trigger.
Limits on agency pay and transparency for extra charges
The Act caps agency pay at no more than 10% above the host institution’s rate for the same profession, and requires that travel, accommodation and per diem charges billed to institutions be published, paid directly to agency workers, and be subject to ministerial limits. Those rules reduce agency markups but introduce administrative obligations: employers and agencies must verify institutional rates, calculate permissible differentials, and implement direct payment mechanisms for incidental charges.
Anti‑poaching rule, assignment restrictions and fines
Agencies may not solicit or hire facility employees (poaching), and they may not assign staff who are currently employed by, or who left within the previous 12 months from, the same or adjacent Ontario Health Team. Breach of the poaching rule is an offence with fines up to $1,000,000, and fines are earmarked to fund hospitals and long‑term care homes. These provisions protect institutional staffing investments but raise questions about enforceability and interaction with individual worker mobility and union rules.
Regulations, commencement and short title
The Minister can make regulations to prescribe limits on charges referenced earlier, which allows the government to set detailed dollar caps administratively. The Act comes into force on Royal Assent and is cited by the short title. The delegated authority to regulate the charge limits will be important: the details in those regulations—not the Act’s high‑level caps—will determine day‑to‑day compliance.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Patients and residents seeking continuity of care — the planning and nursing leadership requirements aim to reduce reliance on short‑term agency staff, which can improve staffing stability and continuity for patient care.
- Hospitals and long‑term care operators that can rapidly expand internal staffing capacity — over time they stand to reduce agency fees and redirect those funds into permanent positions and training.
- Public oversight bodies and taxpayers — agencies that receive substantial public funding are brought under audit and ombuds oversight, increasing transparency about how government money is used.
- Unionized and permanent staff — anti‑poaching rules and assignment restrictions protect institutional recruitment investments and may strengthen bargaining positions for permanent workforce stability.
Who Bears the Cost
- For‑profit healthcare staffing agencies — new entrants must be not‑for‑profit and existing firms face limits on pay and business practices that compress margins and may force restructuring or exit.
- Hospitals and long‑term care homes during transition — they must build recruitment, onboarding, and retention capacity quickly, expand workforce planning, and absorb administrative burdens linked to plan publication and semi‑annual reporting.
- Temporary/agency workers — caps on pay premiums, restrictions on assignments and anti‑poaching rules reduce short‑term earning opportunities and can limit mobility between employers.
- Provincial oversight offices and the Auditor General — expanded jurisdiction over agencies receiving government funds increases investigative workloads and may require new resources or mandate prioritization changes.
- Ontario Health Teams and regional HR functions — the assignment prohibition within same or adjacent OHTs creates operational coordination and monitoring obligations that regional bodies must manage.
Key Issues
The Core Tension
The central dilemma is between controlling public spending and market practices (and increasing accountability for publicly funded staffing) versus preserving enough workforce flexibility and financial incentives to meet urgent staffing needs; the bill reduces costs and increases transparency but risks worsening staffing shortages and administrative burdens unless matched with concrete workforce and funding measures.
The Act forces a rapid shift away from agency reliance but leaves key operational questions unanswered. Reducing and eliminating agency use within 24 months presumes that institutions can recruit and retain sufficient permanent staff in regions that already face labour shortages; the bill requires plans and public reporting, but it does not supply targeted funding or specific recruitment programs.
That gap creates a risk that facilities will face unavoidable staffing shortfalls or increased overtime burdens during the transition, threatening the very patient safety the law seeks to protect.
Enforcement and perverse incentives are also real concerns. The oversight threshold tied to aggregate government payments is easy to game: large for‑profit agencies could fragment corporate structures or alter contracting pathways to avoid the $400,000 trigger.
Similarly, the pay cap and anti‑poaching rules may encourage agencies to reclassify fees as non‑wage charges, subcontract through affiliated entities, or find other mechanisms to preserve margins. Monitoring poaching and proving a breach will demand investigative capacity and clear evidentiary standards, especially where worker mobility and individual choice intersect with employer‑side restrictions.
Finally, imposing a not‑for‑profit requirement on new entrants will shrink private capital entry but could prompt hybrid organizational models or create small not‑for‑profit entities with limited oversight experience. The Minister’s regulation‑making power over charge limits means the real compliance obligations may eventually be contained in subordinate instruments; how those are drafted will determine practical impact far more than the Act’s high‑level language.
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