Ontario’s $3B problem

Governments seeking new ways to collect unpaid fines and taxes

Cash-strapped governments know there is a pot of gold out there, but finding it is another matter.

Unfortunately there is no rainbow leading to back taxes and unpaid fines and loans worth billions of dollars.

And every year the tab grows as individuals and companies still reeling from the great recession turn their backs on paying fines, taxes and government loans.

Ontario alone figures it has more than $3 billion coming to it, money that could be used to pay down the $11.9-billion deficit or spent on education and health care.

Getting at that money has been an age-old problem for municipalities, provinces and the federal government.

“Since the recession it’s been exacerbating. We’ve got about between $3 (billion) and $4 billion of bad debt, uncollected taxes, OSAP (On- tario Student Assistance Program) loans, fines, speeding tickets. I’d say about a billion of that amount (in unpaid fines) are actually owed to municipalities,” Finance Minister Charles Sousa told the Star.

“My real concern is going after individuals who have made money in Ontario and have not paid their fair share or companies, especially . . . going forward we’ve got to make sure we take proper measures to ensure that these things don’t grow,” he said.

The Canada Revenue Agency is responsible for collecting taxes for Ontario. Sousa emphasized the province is onside with all federal efforts to chase down scofflaws.

On Thursday, the federal government proposed measures in its budget to crack down on tax evaders, including paying people who provide information about them.

Of the whopping amount owed Ontario, Auditor General Jim McCarter had said about $1.4 billion might as well be written off given the cases are so old. Of that about $600 million is considered uncollectable.

Tory finance critic MPP Peter Shurman (Thornhill) said with the thousands of new provincial civil servants the Liberals have hired over the past 10 years, Queen’s Park should not be owed anything. “I can’t believe we are owed a dime, except by people who have either died or are completely incapable of paying. Not only should we be collecting, we have people to do the collecting. It strikes me as more than passing strange that we should have this problem at given the bloated bureaucracy that exists,” Shurman said. The NDP’s finance critic Michael Prue, former mayor of East York before it amalgamated, said his municipality refused to write off back taxes. “Ordinary people who pay their taxes and live by the rules are disgusted when they think people are getting away with this simply by walking away,” the Beaches-East York MPP said. He said municipalities and the province have been reluctant to put the kind of levels of services into enforcing payment. The Liberal government has legislation pending that would help municipalities collect hundreds of millions of dollars in unpaid traffic fines. Expected to be introduced

"We’ve got about between $3 (billion) and $4 billion of bad debt, uncollected taxes, OSAP (Ontario Student Assistance Program) loans, fines, speeding tickets. I’d say about a billion of that amount (in unpaid fines) are actually owed to municipalities.”

CHARLES SOUSA ONTARIO FINANCE MINISTER

within days, the proposed law would deny licence plate renewals to drivers with outstanding tickets for speeding, improper lane changes, illegal turns, driving with no insurance and careless driving, and make it easier for municipalities to charge out-of-province drivers who run red lights and fail to stop for school buses. According to the transportation ministry, unpaid Highway Traffic Act fines and fines for failing to have insurance — totalling an estimated $669 million — represent about 70 per cent of the total amount of unpaid fines owed to municipalities. The ministry added that fines owed to municipalities are increas- ing by an average of approximately $100 million a year.

The administration of the Provincial Offences Act was turned over to municipalities more than 15 years ago by Mike Harris’s Tory government but it lacked any real enforcement for collecting fines.

Besides the outstanding fines, Association of Municipalities of Ontario estimates that the 444 Ontario municipalities are owed about $1 billion in unpaid property taxes.

“Part of the challenge for municipal government is when a business goes bankrupt is how to you get in the line (to be paid),” said Pat Vanini, executive director of the association.