Ontario gave $210M in COVID-19 support to ineligible businesses, auditor’s report finds

TORONTO _ Ontario businesses that weren’t eligible for pandemic relief programs received more than $200 million in provincial supports, others were given more money than they lost and some hard-hit vendors were excluded altogether, the province’s auditor general has found.

Auditor General Bonnie Lysyk’s annual report, released Wednesday, covered 18 topics including COVID-19 help for businesses, management of personal protective equipment, surgery wait times and assisted living services.

Pandemic programs for businesses totalled $11.2 billion _ about a third of the money allocated for provincial COVID-19 relief _ but Lysyk found those programs lacked clear goals and eligibility criteria was poorly defined, allowing thousands of ineligible businesses to receive funds.

“Given the amount of money, the absence of better controls or assessment processes is troubling,” Lysyk said in a statement.

“Even in a crisis, systems should be in place to make sure that only eligible businesses receive taxpayer dollars, and program funds reach those who need it most.”

One such program was the Ontario Small Business Support Grant, which the audit found lacked controls to weed out ineligible applicants. That meant $210 million went to14,500 ineligible recipients _ which the province isn’t trying to recover _ and another $6 million in payments is still being investigated.

The audit found that nearly half of businesses that received grants got more money than they actually lost in revenue, to a total difference of about $714 million, because the minimum grant was for $10,000.

The province also paid $16 million in property tax and energy rebates to more than 3,000 ineligible businesses, the audit found.

Lysky’s office also flagged issues with the Ontario Together fund, which offered help to businesses shifting their operations to help with the pandemic response.

2:28 Ford responds to AG report on small business grants given to ineligible businesses

In one case, a $1.8 million contract with that program went to a business that went bankrupt within eight months. In two instances, the audit found the Economic Development Ministry did not identify a potential conflict of interest, including when the CEO of a company that received $2.5 million was part of the COVID-19 Vaccine Task Force.

Payouts for COVID business relief funds haven’t been tracked centrally, the audit said, so the province doesn’t know how effective programs were at helping people or if the money went to intended recipients.

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Hard-hit businesses that lost revenue but didn’t have to close during the pandemic weren’t eligible to receive funds, the auditor’s report noted.

2:28 Ontario sent hundreds of millions of dollars in pandemic supports to ineligible businesses: auditor

When asked about the findings, Premier Doug Ford said the province moved quickly to support businesses when COVID-19 hit.

“When we’re rushing the money out the door to support the small businesses that were in desperate need of it, unfortunately, you’re going to see some fraud,” he said.

“We’re going to always continue looking into it, seeing where we can improve, but there’s a lot of people that were supported … I think more people benefited than got hurt.”

Finance Minister Peter Bethlenfalvy said the government won’t try to recoup most of the $210 million that went to ineligible recipients because he thinks most people applied in good faith, with the exception of some potential “bad actors.”

“We’ve made the decision to not increase the burden on the backs of those small businesses,” he said. “Those bad actors, well, that’s a fraction of the $210 million.”

He said businesses that weren’t eligible could have been helped if there had been more time to develop the program, but speed was the objective.

NDP Leader Andrea Horwath criticized the Progressive Conservative government’s argument that they were rushed to create the program, noting it was developed last December, several months after the pandemic was declared.

“They dragged their feet,” she said, adding that more should be done to probe possible fraud and recoup the $210 million.

Ontario Green leader Mike Schreiner said it’s frustrating to see so much money go out in overpayments and to ineligible recipients when others asking for help for months were shut out.

Another audit found the province didn’t have enough personal protective equipment at the start of the pandemic, but could have been prepared if it followed recommendations that came in 2006 after the SARS outbreak.

It also flagged a lack of legislated monitoring of PPE stockpiles for health-care providers and said the government wasn’t sufficiently transparent about how it distributed the limited supply of equipment. An initiative established last November to manage the provincial PPE supply chain will likely help address some of the issues, Lysyk said, though it won’t be fully functional until 2023.

Wait times for outpatient surgeries have worsened during the pandemic, another audit found, with some increasing by up to 57 per cent in 2020-2021. Waits vary between regions, leading to inequitable treatment, the report said.

The audit noted that outpatient surgeries can be done in public and private hospitals and independent health facilities, but there is poor co-ordination between facilities. It also found lack of oversight of outpatient surgeries and “no protection” for patients who are charged inappropriately for surgeries that are covered provincially.

Another audit noted inefficient monitoring of assisted living services, which the province spent $389 million on last year. The province gets so little information from service providers that it’s unknown if clients are receiving the care they need or if they are being neglected or abused, the audit said.