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  • 15.11.2017 Buy Cigarettes for BitCoin

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Contraband Cigarettes A $500-million Problem, Report Says

The tax gap - the difference between the amount of tax that should be collected and the amount actually collected - has increased dramatically since his office initially pointed out the problem in 2001. “Quite frankly, $500-million is a lot of money any time, but especially when we're going into a recession and revenues are going to be tougher to come by,” Mr. McCarter said at a news conference on Monday. The Ontario government is shortchanging its own coffers to the tune of $500-million a year by failing to crack down on the sale of contraband cigarettes, says the provincial auditor.

Problems persist with smuggling and sales of illegal cigarettes, and the government should crack down to make sure that purchases of tax-free discount cigarettes and cigars on First Nations reserves do not exceed their discount cigarettes allocations, Auditor-General Jim McCarter says in his annual report. The estimated $500-million in lost revenue is about equal to the size of the deficit that the provincial government is projecting for this year.

About 20 million cartons of discount cigarettes were smuggled into Ontario in 2007 alone, but less than 5 per cent were seized by authorities, the report says. Each carton contains 200 cigarettes. A well known source of illegal Buy Cigarettes Online includes tobacco shacks on First Nations reserves, where they are not subject to taxation. Ontario Finance Minister Dwight Duncan said Monday evening that these are the first hard numbers he has seen regarding the scope of the problem. But he said there are challenges cracking down on the illicit sale of tobacco because it involves dealing with cross-border issues as well as First Nations communities.

“It does not lend itself to easy resolutions,” he said. The number of seizures has increased dramatically in recent years, he added, “but obviously there's more to do.” Dave Bryans, president of the Canadian Convenience Stores Association and a member of the National Coalition Against Contraband Tobacco, called on the province on Monday to set up a commission to tackle the problem. “We know the problem with illegal cigarettes is out of control,” Mr. Bryans said in a statement. “Ontario's auditor has now sounded the alarm.”

The auditor's 498-page annual report also finds a litany of problems in other areas, including correctional officers in Ontario prisons who took an average of 32 sick days last year, a backlog of cases in provincial courts, a new hospital built with private sector partners that would have cost less for the government to build on its own and regional disparities in funding to tackle drug addiction and mental health problems. The auditor's report says the government has been ineffective in dealing with “serious problems” associated with the absenteeism of correctional officers, including those who abuse sick leave and overtime provisions, in the province's 31 prisons. Some of the absenteeism was suspicious, including those who called in sick on the weekend preceding Thanksgiving Monday, only to turn up for work on the holiday and earn twice the hourly rate.

The government has been ineffective in dealing with this problem, the report says, which has resulted in the province spending an extra $20-million last year on overtime costs and replacement staff. Substitute officers are paid overtime at 1.5 times the hourly rate. Some have been able to more than double their annual salary to $140,000 by working overtime, the report says.

Mr. McCarter said he asked government officials whether correctional officers were “gaming” the system. “Being auditors, we're suspicious,” he told reporters. The auditor blames low morale among officers for the problem, which has only gotten worse. Absenteeism has soared from just 12 days in 1995 to 32 last year and varies widely among institutions. In one, 82 per cent of workers missed an average of 11.5 days.

No one ever gets fired for poor attendance. When excessive absenteeism occurs at a prison, it often has no choice but to impose lockdowns, the report says. In 2007, there were 235 lockdowns because of staff shortages. The prisons are overcrowded, with some operating at more than 100 per cent capacity, largely because of a backlog of cases awaiting trial in the province's courts. Many two-person cells have three or four prisoners, Mr. McCarter told reporters.

Nearly 70 per cent of inmates are in custody awaiting court appearances simply because it takes the courts longer to dispose of criminal cases, the report says. Over the past decade, the time taken to dispose of cases has climbed 11 per cent to an average of 205 days. On the construction of the William Osler hospital in Brampton, Ont., Mr. McCarter said, “it could well have been cheaper for the province to build it.”

The project was initiated by the previous Conservative government but it could serve as a template for others. The Liberal government has dozens of hospital construction projects on the drawing board that are being done in partnership with private-sector players. “We concluded that the costs and benefits of this public-private partnership were not adequately assessed before the decision was made to proceed,” Mr. McCarter said at a news conference.

Ontario New Democrat Leader Howard Hampton criticized the government for the Brampton hospital. “Ontario families are now paying more and getting less for their investment in health care,” he said. “Every dollar wasted on these private-for-profit hospitals is another dollar that can't be put into patient care.” The auditor's report also examines several programs for what he describes as “people less able to help themselves,” including those suffering from mental illness and drug addictions.

The auditor found disparities in funding from one region to another. For addiction, funding for addiction programs ranged from $3 to $40 a person and funding for community mental health programs ranged from $19 to $115 a person. The government is making good progress in reducing the number of patients in institutions. But it is not adequately meeting their needs in the community, the report concludes. “[Premier] Dalton McGuinty has his priorities backwards,” said Ontario Progressive Conservative Leader John Tory. “They put a premium on spending with no focus on results.”

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