TORONTO - Ontario fails to collect up to $500 million in tobacco taxes annually -- the same amount as the province's projected deficit this year -- and misses out on millions more in gasoline and diesel fuel taxes, Auditor General Jim McCarter said Monday in his annual report.
McCarter said he was particularly concerned by the potential size of the tobacco tax gap, which he first pointed out in his 2001 audit, and he complained the Revenue Ministry is still not doing appropriate auditing on either tobacco or the diesel and gas taxes.
"Quite frankly, this whole area of tax enforcement, especially in the tobacco area, they have definitely got to strengthen up enforcement procedures," he said.
"I mean, $500 million is a lot of money any time, but especially when we're going into a recession and revenues will be tougher to come by."
To address the problem, McCarter said the government needs to:
--Change the Tobacco Act, among other measures, to mitigate incentives for smuggling and sales of illegal tobacco.
--Work with police and border agencies to "reduce or eliminate" illegal importing of cigarettes.
--Better monitor tobacco sales on First Nations reserves so they don't exceed allocation limits.
--Ensure that all tobacco tax returns are properly completed.
NDP Leader Howard Hampton said workers who already feel overtaxed by the government will be discouraged by the auditor's report.
"How does that make the ordinary person feel, somebody who is trying to scratch out a living working at two or three part-time jobs and being taxed here, there and everywhere else, to find out the McGuinty government is literally dropping the ball on $500 million in tobacco taxes?" Hampton asked.
The Opposition also laid the blame for the auditor's findings squarely at Premier Dalton McGuinty's feet.
"It's a matter of discipline and it starts at the top," said Progressive Conservative Leader John Tory.
"If Mr. McGuinty gave the slightest indication at any time that he cared how the taxpayers' money was spent, you'd see a lot of things -- including absenteeism in the jail system and collection of tobacco taxes -- a lot better."
The auditor said even though more than $100 million has been spent to reduce court backlogs, the problem continues to grow, as does the average number of court appearances for each case, dragging out more than 100,000 cases that could potentially be thrown out for taking too long to get to trial.
"We looked at the number of judges and we found on a per capita basis, Ontario is the low man on the totem pole," McCarter said. "They have to address this problem."
The auditor also found a "serious absenteeism problem" in Ontario's jails, where corrections officers take an average of 32.5 sick days each year.
McCarter's audit team wondered if the guards were "gaming the system" when the absentee rate in one institution jumped 55 per cent the year after it was transferred from a private company to become government-run.
"That's an example of the need for more stringent management," McCarter said.
"They acknowledged that this was an issue that had to be addressed and that 32 days was unreasonable."
In his report, McCarter criticized the Liberal government for a lack of adequate oversight of many programs to ensure taxpayers are getting value for their money.
For example, special education funding was up more than 50 per cent in six years, but the number of kids helped is up only five per cent, and no one can explain the situation.
"It's a complete lack of any ability to manage," Tory said.
"It is disrespectful of the taxpayers and their money, and I think it shows yet again the Liberals are big on the spending, big on the PR, but not good on producing results for people."
The auditor said Ontario needs to improve the way it follows up violations of food safety standards in slaughterhouses, meat-processing plants and dairies.
"Consumers in Ontario would have a higher level of comfort if the deficiencies that we pointed out in our audit were corrected by the ministry of agriculture and food," he said. "It would lessen the risk."
McCarter also found Ontario residents with serious mental illness who are living in the community may not be receiving an appropriate level of care, and half of the mentally ill patients in hospitals could be discharged if adequate community services were available.
Mental health services for children were described as a patchwork system without any uniform standards across the province, while up to 90 per cent of the people the government estimates need addiction treatment may not be getting it.
