09 May Where Ontario can make cuts: Stop giving welfare to refugee…
Late last year, Ontario auditor general Bonnie Lysyk raised a number of concerns about the province’s $10-billion-per-year welfare system. She noted that the province was owed $790 million in overpayments and wasn’t doing much to try to get them back. She also flagged that, rather than addressing fraud tips in the 30 days required by the ministry’s own rules, managers were taking nearly a year on average to investigate. Most appallingly, Lysyk highlighted that managers were sometimes failing to ask the most basic questions about eligibility. Does the recipient live in Canada? Is he or she allowed to live in Canada?
Lysyk’s team found more than 500 profiles that raised red flags about their immigration status, including refugee claimants who had been getting paid long after they should have been either deported or reclassified as permanent residents. The province says that, as of November, there were 1,110 individuals or families listed in the welfare system as refugee claimants for more than five years.
Managers were taking nearly a year on average to investigate
At a committee meeting in March, Progressive Conservative MP Goldie Ghamari asked assistant deputy minister Richard Steele why the ministry wasn’t routinely checking immigration statuses with Immigration, Refugees and Citizenship Canada. “What has to happen now is that individual requests … have to get faxed to IRCC,” he said. “Faxed?” Ghamari responded. “Yes, faxed,” Steele confirmed.
Lisa MacLeod, Minister of Children, Community and Social Services, has been working with the federal government on a plan to electronically flag people who are slated for deportation, so that taxpayers are no longer paying for failed refugee claimants. That seems like a no-brainer, and it should have happened years ago.
Journalists tend to scoff when Premier Doug Ford when he says he can find enough “efficiencies” to close the $15 billion deficit left by the Liberals without cutting frontline services or raising taxes. After all, he long claimed that he and his brother, former Toronto Mayor Rob Ford, claimed to have found $1 billion worth of efficiencies in the City of Toronto’s budget — a number that was, to put it mildly, generous. Still, the auditor general has shown that getting serious about fraud would help get the province get a lot closer to balanced books.
Small businesses that hide their sales from the taxman are one of the biggest sources of unaddressed fraud. Statistics Canada puts the underground economy nationwide at $51.6 billion, with residential construction, retail and hospitality making up more than half. Quebec has found a relatively simple way of cracking down, at least in bars and restaurants: tamper-proof “sales recording modules” connected to debit machines and cash registers that track every sale. SRMs have been required in Quebec restaurants since 2011 and in bars since 2016. Revenu Québec said last year that it had recovered $2.1 billion in otherwise hidden taxes as a result of the program. Kathleen Wynne’s Liberals passed a law last spring to require “electronic cash registers,” which would have served the same purpose. They estimated the rule, which has not yet come into force, would catch $500 million per year. Finance Minister Victor Fedeli, who was PC critic at the time, framed the requirement as just more red tape for business owners. Now the government refuses to rule out going ahead with the idea, which is a smart one.
Another area where the province could root out fraud is in the $514 million annual assistive devices program, which provides things like oxygen tanks, insulin pumps and wheelchairs to more than 400,000 Ontarians. Between 2010 and 2018, the Ministry of Health and Long-Term Care looked into 235 device vendors and found that 99 per cent had submitted ineligible claims. The ministry managed to get $10 million back. But rather than widening its inspections, it cut them.
Then there’s the Ontario Student Assistance Program. The province handed out $1.57 billion in in grants to 234,000 people last year. Only those facing financial hardship are supposed to get the money, but they were paid out without even verifying that students are being honest about their assets. The Ministry of Training, Colleges and Universities investigated 2,036 OSAP recipients over three years ending in 2017 and found reasons to stop payments to 11 per cent of them. That suggests there’s millions of dollars that can be saved here without hurting anyone who’s actually eligible for the assistance.
Other programs that have been known for decades to be regular targets of fraud include the Ontario Health Insurance Plan and the public drug plans, yet the auditor general finds year after year that little is done to catch the fraudsters. Last year, a doctor was found guilty of defrauding OHIP after billing $2 million over four years but he was only caught because a patient reported him for offering her hundreds of dollars per month to take part in his scam.
Lysyk has made many detailed recommendations to root out fraud, including better training and more automated flagging of high-risk files. But there’s a lot more the province could do. Managers could have their compensation tied to how much fraud they catch, and the province could also enlist the general public. How about cash rewards for catching cheaters?