On August 22, 2008, the Divisional Court released its reasons in Ontario Public Service Employees Union’s (“OPSEU”) judicial review of the Central East Local Health Integration Network’s (“CELHIN”) decision to enter into an Accountability Agreement with Rouge Valley Health System (“RVHS” or the “Hospital”) in March 20081. RVHS was an interested party.

For the first time, the Court interpreted sections of the Local Health System Integration Act, 2006 (“LHSIA” or the “Act”) regarding community engagement and integration of health services, finding that the CELHIN and RVHS complied with the Act and dismissing OPSEU’s application for judicial review. The Court also affirmed that the Hospital has the authority to make its own decisions regarding consolidation of health services within its Hospital sites, Rouge Valley Centenary and Rouge Valley Ajax and Pickering.


In 2007, the CELHIN ordered a peer review of RVHS’ operations with a view to improving and eventually eliminating the Hospital’s deficit. The peer review report, released in December 2007, recommended that RVHS identify the potential to consolidate and relocate clinical services and leverage capacity at the Hospital’s sites. Subsequently, the Hospital developed a Deficit Elimination Plan to address its deficit, which included a plan to consolidate inpatient mental health services at Rouge Valley Centenary. From June 2007 through to April 2008, RVHS consulted its staff, volunteers and internal community as well as the broader community where appropriate regarding its redevelopment planning. In March 2008, the CELHIN entered into an Accountability Agreement with RVHS pursuant to the Act on the understanding that the Hospital’s deficit would be reduced and eventually eliminated, based on the representations in the Deficit Elimination Plan.

CELHIN Decision

OPSEU argued that the Accountability Agreement constituted a decision to approve the Hospital’s mental health consolidation and pursuant to the community engagement and integration sections of the LHSIA, which required the CELHIN to engage the community prior to entering into its Accountability Agreement with RVHS. Having failed to do so, OPSEU argued, the CELHIN’s decision ought to be quashed. The Court disagreed, finding as follows and limiting the scope of the judicial review to the CELHIN’s decision to enter into the Accountability Agreement:

The decision to consolidate inpatient mental health beds was made by RVHS, which had the authority to decide how best to eliminate its budget deficit. The LHIN did not require approval of the specific measures proposed by RVHS, as that was an internal hospital decision. What [the] LHIN decided was to fund RVHS on the basis of its representations in respect of fiscal improvements aimed at eliminating the budget deficit.

Community Engagement

Section 16 of the LHSIA deals with community engagement. Subsection 16(1) requires the LHIN to “engage the community of diverse persons and entities involved with the local health system about that system on an ongoing basis, including about the integrated health service plan and while setting priorities.” Subsection 16(6) requires health service providers, including hospitals, to “engage the community of diverse persons and entities in the area where it provides health services when developing plans and setting priorities for the delivery of health services”.

The Court held that the LHIN’s obligation to engage the community as set out in section 16(1) of the Act relates to planning activities, finding that it does not require public consultation during budget negotiations with individual health service providers. The Court also held that RVHS complied with its obligation at section 16(6) to engage the community when developing plans and setting priorities.


Sections 25 through 27 of the LHSIA deal with integrations. Section 25 deals with integration of health services by a LHIN, and requires that a LHIN issue an integration decision in certain circumstances. Section 26 permits integration by the LHIN in certain circumstances, and requires notice to the public. Section 27 provides that a health service provider may integrate its services with another entity with notice to the LHIN. There are requirements in these sections that the community be advised of intended integrations in certain circumstances. OPSEU argued that the mental health consolidation constituted an integration and therefore the community should have been advised pursuant to the legislation.

“Integration decisions” only occur in certain circumstances; generally only where one health service provider integrates with another entity. As outlined above, the Court held that RVHS is one health service provider operating from two sites, and therefore there was no integration of services for the purposes of the Act in respect of the Hospital’s mental health consolidation.

The Court held that the LHIN did not issue an integration decision pursuant to section 25 or 26 of the Act, nor was it required to do so in the circumstances, and therefore the community consultation provisions in those sections did not apply.

Key Findings

  • A hospital with multiple sites constitutes a single health service provider pursuant to the LHSIA, and therefore hospital-initiated movement of services from one site to another is not an integration decision;
  • Hospitals are free to make independent decisions regarding movement of services from one site to another without requiring approval by their LHIN;
  • LHINs are only required to consult the community in limited circumstances, which do not include the negotiation of accountability agreements with health service providers;
  • Hospitals are required to consult the community when “developing plans and setting priorities for the delivery of health services”, but not necessarily when entering into the annual Accountability Agreement with the LHIN.

In this case it was clear that the Hospital had gone to great lengths to engage the community. It remains to be seen how section 16(6) of the Act will be interpreted in different circumstances. Hospitals should be aware of this section and of its obligation to engage its diverse community, potentially in a broad range of circumstances.

Bill Carter and Heather Pessione of Borden Ladner Gervais LLP represented the Hospital before the Divisional Court.

You can access the full judgment at: http://www.canlii.org/eliisa/highlight.do?language=en&searchTitle=Search+all+CanLII+Databases&path=/en/on/onscdc/doc/2008/2008canlii41820/2008canlii41820.html

You can access the Local Health System Integration Act, 2006 at: http://www.e-laws.gov.on.ca