Ford’s government sent almost $1B to businesses not eligible for COVID aid or who lost less money than they were given: AG report
In a rush to get COVID-19 aid out the door, Premier Doug Ford's government sent almost $1 billion to thousands of businesses that were not eligible or who lost less money than they were given, auditor general Bonnie Lysyk charges in her annual report.
She found a troubling" absence of controls that resulted in the approval of suspicious" applications - including from businesses with addresses outside Ontario - because of a focus on speed and a lack of verification.
I understand that the government was dealing with an unprecedented crisis," Lysyk wrote in the report released Wednesday.
But even in a crisis, systems should be in place to make sure that only eligible businesses received taxpayer dollars, and program funds reach those who need it most."
The annual report also faulted the Ontario Cannabis Retail Corporation for weak controls to prevent minors from buying marijuana products, a lack of timely treatment for 60 per cent of Ontarians experiencing heart attacks, a failure of the Ontario Securities Commission to collect $378 million in fines imposed on companies, lax oversight of private career colleges, and increasingly understaffed" Ontario Provincial Police detachments.
On the pandemic payouts, Lysyk criticized the Ford government for excluding some businesses in the accommodation, dry cleaning, laundry, manufacturing, transportation, logistics, wine and brewery sectors from some aid programs while others got money they shouldn't have.
For example, $210 million in Ontario small business grants of $10,000 to $20,000 went to 14,500 small businesses that were not eligible, according to the criteria. The program was intended for businesses that were required to close during lockdowns or were severely restricted and lost more than 20 per cent of their revenue.
Given the amount of money, the absence of better controls or assessment processes is troubling," Lysyk said.
The province initially relied on applicant-reported information without verifying whether the information was true, asking for supporting documentation, or at a minimum, assessessing the reasonableness of the information being provided."
It took until seven weeks after the launch of the program to set up a system to flag" applications from businesses with addresses outside Ontario, she noted.
The money was written off in August and the government did not make any attempts to recover funds paid to ineligible recipients."
Another $6 million to suspicious recipients" remains under investigation following tips from the public, financial institutions and internal reviews by the ministries of finance, economic development and government services.
Because the small business grants started at $10,000, businesses who lost less than that got a bonus - including some that lost as little as two cents or had no change at all, resulting in overpayments of $714 million.
Over 51,000 recipients received more than $939 million in grants in comparison to their total reported losses of $225 million," Lysyk wrote, noting that the lucky businesses comprised 46 per cent of the total who applied.
Eligibility controls were either missing entirely, poorly designed, or not applied."
Meanwhile, the Ontario Together Fund to help companies with up to $2.5 million each to create products such as ventilators, masks and sanitizing equipment for the pandemic emergency response resulted in its share of disappointments.
One company given $1.8 million went bankrupt and 15 of 54 projects aided with the grants have been delayed, meaning their products are not yet ready for the market.
While delays in providing personal protective equipment (PPE) such as masks, gowns and gloves were well documented early in the pandemic because stockpiles amassed in the wake of the 2003 SARS crisis had expired by 2017, Lysyk chronicled more than 1,600 emergency requests from health care facilities such as nursing homes in February and March of 2020.
That was far more than could be filled.. the Ministry of Health had begun destroying the PPE without replacing it," her report said.
An inadequate supply of PPE contributed to higher risk of COVID-19 exposure for many health-care workers."
The province has established a new organization called Supply Ontario to centralize and manage PPE procurement and supply but it is not expected to be fully functional" for two more years.
It is important the province be prepared for unexpected events where PPE may be needed," Lysyk said.
Rob Ferguson is a Toronto-based reporter covering Ontario politics for the Star. Follow him on Twitter: @robferguson1
Kristin Rushowy is a Toronto-based reporter covering Ontario politics for the Star. Follow her on Twitter: @krushowy
Robert Benzie is the Star's Queen's Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie