Ford government sent nearly $ 1 billion to businesses ineligible for COVID-19 assistance or that lost less money than they received, Auditor General says

Haste makes waste.

In the rush to push out COVID-19 aid, Prime Minister Doug Ford’s government sent nearly $ 1 billion to thousands of businesses that were not eligible or received more than their losses justify it, accuses Auditor General Bonnie Lysyk.

Lysyk found a “troubling” lack of controls that resulted in the approval of “suspicious” requests – including those from companies with addresses outside of Ontario – due to the emphasis on speed. and a lack of verification.

“I understand the government was facing an unprecedented crisis,” Lysyk wrote in his 1,300-page annual report released on Wednesday.

“But even in a crisis, systems should be in place to ensure that only qualifying businesses receive taxpayer money and that program funds get to those who need it most.”

Ford acknowledged its rush to help small businesses, but stressed they were in “desperate need” amid the lockdowns and restrictions.

“As a result of these grants, businesses are still in business today,” he said in Mississauga, where he announced plans to build a new hospital in Mississauga and expand the Queensway Health Center in. opposite Sherway Gardens as part of a 10-year, $ 30.2 billion plan. .

“Unfortunately, you are going to see a fraud. “

The auditor’s annual report also criticized Ontario Cannabis Retail Corp. weak controls to prevent minors from buying cannabis, lack of timely treatment for 60 percent of heart attack patients, failure of the Ontario Securities Commission to collect $ 378 million in fines, lax oversight of private career colleges and “increasingly understaffed” OPP detachments.

In addition, Lysyk criticized the frequent use by the Progressive Conservative government of the minister’s zoning bylaws to accelerate local development, warning that the measures lack “transparency.”

She added that the controversial Highway 413 project from Highway 401 in Milton to Highway 400 in Vaughan is “inconsistent” with land use policies.

Green Leader Mike Schreiner pleaded with Ford to “heed the Auditor General’s warnings and prioritize the protection of people, property and the community by canceling Highway 413” because of its negative environmental impact.

On pandemic payments, she lambasted Ford for excluding some companies in the accommodation, dry cleaning, laundry, manufacturing, transportation, logistics, wine and brewing industries 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 did not meet the eligibility criteria. The program was aimed at businesses that had to close during shutdowns or were severely restricted and lost more than 20% of their revenue.

“Considering the amount of money, the lack of better controls or assessment process is troubling,” Lysyk said, shaking his head as the government wrote off the grants as unrecoverable.

NDP Leader Andrea Horwath said the Tories should go after the money and blamed the problem on a lack of foresight in a program developed in just days at the end of 2020.

“It is shocking that the government’s response to the fraud is to simply cancel it,” she said. “This money must be recovered. They have the names of the companies. They have their bank accounts that they transferred the money to.

It took up to seven weeks after the program’s launch to put in place a system to “flag” inquiries from businesses with addresses outside of Ontario, Lysyk noted.

Because small business grants started at $ 10,000, businesses that lost less than that received a bonus – including some that lost as little as two cents or had no change in income, resulting in losses. overpayments of $ 714 million, according to the report.

“More than 51,000 grantees received more than $ 939 million in grants compared to their total reported losses of $ 225 million,” Lysyk wrote, noting that lucky companies made up 46% of the total applicants.

But Economic Development Minister Vic Fedeli has argued that what the auditor calls an “overpayment” of $ 714 million does not reflect the realities of the pandemic.

“The $ 225 million in losses is just one month of losses suffered by these small businesses,” Fedeli said.

Another struggling aid program, the Ontario Together Fund, has caused its share of disappointments, Lysyk said.

The fund was created to give businesses up to $ 2.5 million each to create products such as ventilators, masks and disinfection equipment for emergency pandemic response. A company that received $ 1.8 million went bankrupt and 15 of the 54 projects funded by the grants were delayed because their products were not yet ready for the market.

“It is just not a competent government,” said Liberal Leader Steven Del Duca.

An additional $ 16 million has been given in property tax and energy cost rebates to businesses that were not eligible, although $ 850,000 has since been clawed back from 229 businesses, according to the report.

However, Lysyk’s audit makes no mention of the alleged theft of $ 11 million in pandemic aid that led to criminal charges against two Ontario bureaucrats sacked in the wake of the scandal.

“I know there are problems,” she said. “We participated in the follow-up. “

Robert Benzie is the Bureau Chief of Star’s Queen’s Park and a journalist covering Ontario politics. Follow him on Twitter: @robertbenzie

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