2. Status Report - Provincial Offences Act Defaulted Fines
RAPPORT D’ éTAPE - AMENDES IMPAYéES ENCOURUES EN VERTU DE LA LOI SUR LES INFRACTIONS PROVINCIALES
That Council approve ceasing collections activity on the uncollectible Provincial Offences Act defaulted fines identified in this report pursuant to directives from the Ministry of the Attorney General.
Recommandation DU Comité
Que le Conseil approuve la cessation des activités de recouvrement des amendes impayées imposées aux termes de la Loi sur les infractions provinciales irrécouvrables définies dans le présent rapport, conformément aux directives du ministère du Procureur général.
Documentation
1. City Treasurer’s report dated 25 January 2010 (ACS2010-CMR-FIN-0007).
2. Extract of Draft Minute, 2 February 2010.
Corporate Services and Economic Development Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
25 January 2010 / le 25 janvier 2010
Submitted by/Soumis par: Marian Simulik, City Treasurer/Trésorière municipale
Contact Person/Personne ressource : Ken Hughes, Deputy City Treasurer, Revenue/ Trésorier Municipal Adjoint
Finance Department /Département de finance
613-580-2424 ext. 13485, Ken.Hughes@ottawa.ca
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Ref N°: ACS2010-CMR-FIN-0007 |
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OBJET : |
Rapport d’étape - amendes impayées encourues en vertu de la loi sur les infractions provinciales |
That the Corporate Services and Economic Development Committee recommend Council approve ceasing collections activity on the uncollectible Provincial Offences Act defaulted fines identified in this report pursuant to directives from the Ministry of the Attorney General.
Que le comité organisationnels et du développement économique recommande au Conseil d’approuver la cessation des activités de recouvrement des amendes impayées imposées aux termes de la Loi sur les infractions provinciales irrécouvrables définies dans le présent rapport, conformément aux directives du ministère du Procureur général.
Effective March 19, 2001, the City of Ottawa assumed responsibility for the administration of the Provincial Offences Act from the Ministry of the Attorney General (MAG). The Provincial Offences Act (POA) sets out the procedures for administering and prosecuting all provincial offences that exist within provincial legislation, minor federal offences designated as contraventions and municipal by-laws. Provincial Offences are non-criminal charges and highlighted below are some examples:
· Highway Traffic Act, such as speeding, careless driving, not wearing your seatbelt, driving while under suspension;
· Compulsory Automobile Insurance Act, such as failing to surrender your insurance card, or possessing a fake or invalid insurance card;
· Trespass to Property Act, such as entering premises when entry is prohibited or failing to leave premises after being directed to do so;
· Liquor Licence Act, such as being intoxicated in a public place or selling alcohol to a minor and
· City By-Laws, such as infractions under Ottawa’s noise, taxi and animal care by-laws.
At the time of transfer, the province downloaded the responsibility for the collection of a portfolio of just over 121,000 delinquent cases having a total value of about $24 million. Based on the age of the portfolio, industry experts estimated a 1-5 % recovery rate for pre-transfer delinquent cases, meaning matters having a sentence date before March 19, 2001 with convictions dated back to 1970. This report deals with cases that are deemed uncollectible on which the City should cease collection activity.
In 2002, the City established a POA Collection unit. Since that time, in partnership with third party collection agencies, they have recovered just over $26.5 million in defaulted fines. On average an additional $5 million of defaulted fines are added to the collection list each year. As at the end of October 2009 outstanding Provincial Offences Act fines totalled $51,681,351 of which $49,499,059 is in default.
To improve customer service and collection activity, staff has taken steps to enhance e-payment options. An option for electronic payment for POA tickets was introduced in April 2004, with the implementation of Paytickets.ca. Ottawa has one of the largest adoption rates across the province and continues to see annual transaction growth. This payment channel has generated over $11.8 million for the period April 2004 to the end of 2009. In consultation with the Mayor’s e-government task force the City is expanding its e-payment service.
Collections of the aged fines transferred from the Province have been difficult and in some instances impossible for various reasons, including the age of the fine, death, inability to locate the offender, bankruptcy, indigence, legal recommendation to cease collections and the lack of information on the fine. For instance, in some cases transferred there may be no driver’s licence number, incomplete name and address or missing court files. In addition, the limitation period to pursue civil enforcement action has expired and other collection mechanisms have been unsuccessful. POA Collection Staff in partnership with third party collection agencies have diligently pursued these delinquent cases and have successfully recovered $3.4 million of the pre-transfer portfolio. While staff is to be commended for their efforts, the success rate for the collection of aging pre-transfer delinquent cases has, as expected, declined over time. Staff efforts now focus on the more recent, post transfer delinquent cases.
As a result of extensive lobbying and consultation efforts by members of the Municipal Court Managers Association and the Municipal Finance Officers Association, MAG released a POA Write-Off Directive and Operating Guideline. On February 28, 2008, the new MAG directive and guideline provides municipalities with the written authority to establish strike-off criteria for the aged delinquent cases deemed uncollectible and staff have developed the required operating procedures to comply with the new MAG directive.
The MAG’s POA Write-Off Directive and Operating Guideline states unpaid fines may be stricken off for accounting purposes only and do not absolve a convicted offender from the requirement to pay a fine, as debts to the Crown are owed in perpetuity and are never forgiven. Unpaid debts can be quickly reinstated and enforced if a defendant comes to notice in the future.
Several municipalities across Ontario have already sought Council approval to strike-off pre-transfer receivables where collection efforts were not successful. Table 1 highlights the strike-offs from some municipalities in Ontario that have presented reports to Committee or Council seeking approval for pre-transfer strike-offs of uncollectible accounts receivable.
Table 1
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Municipality |
Pre-Transfer Receivables (Million) |
Expected or Actual Strike-offs (Million) |
Percentage |
|
Brampton |
$ 17.00 |
$ 10.66 |
63% |
|
Halton |
Not Reported |
$ 2.29 |
n/a |
|
Hamilton |
Not Reported |
$ 12.52 |
n/a |
|
Milton |
Not Reported |
$ 1.87 |
n/a |
|
Niagara |
$ 15.80 |
$ 11.15 |
71% |
|
York |
$ 13.00 |
$ 4.41 |
34% |
Of the $24 million POA receivables downloaded by the Province in 2001 to the City of Ottawa, staff has deemed that $12 million are uncollectible and recommend that the City cease collection activity. Of the remaining $12 million downloaded, staff has collected $3.4 million, which equates to a collection rate of pre-transfer receivables of 28%. Staff, in conjunction with the City’s contracted private collection agencies will continue to pursue collection of the remaining $8.6 million.
In 2009, the POA receivables for all municipalities in the Province of Ontario grew to over one billion dollars. On October 27, 2009, the Attorney General introduced Bill 212, the Good Government Act, 2009, in the Provincial Legislature. The proposed legislative initiatives in Bill 212 include amendments to a significant number of Acts, including a number related to municipal matters, including the Provincial Offences Act. The Provincial Government indicates that the changes in Bill 212 will improve clarity, increase transparency and enhance accountability in a number of the province’s laws, regulations and administrative processes. Specifically, changes to the Provincial Offences Act will improve processes for pleas, trials and payment of fines. The changes will also permit municipalities to recover the amount of a defaulted POA fine through property taxes and to recover collection agency costs without a requirement to seek prior approval of the Attorney General.
As at the end of October 2009 outstanding Provincial Offences Act fines totalled $51,681,351. Of this $49,499,059 are in default, meaning the fines are greater than ninety days old. Of the almost $50 million in default just over $24 million is secured which means that staff has obtained a certificate of default for the fine. If the offender can be found and the offender has assets, enforcement will proceed. Once the $12 million is struck, staff will continue collection efforts on the remaining balance of approximately $37 million.
In accordance with the Delegation of Authority by-law, the City Treasurer is authorized to strike-off POA unpaid fines which the City Treasurer has determined to be uncollectible. There are no financial implications as the Finance Department records POA fine revenue as received.
Table 2 outlines the unpaid fines deemed uncollectible and that staff recommend collection activity cease and the amounts be stricken off totalling $12,208,525. All fines recommended for strike-off have had all reasonable collections efforts exhausted. Table 2 has been summarized by the year of default from 1970 to 2000.
|
Year of Default |
Number of fines |
Total $ |
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1970 |
4 |
139 |
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1971 |
4 |
141 |
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1972 |
6 |
321 |
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1973 |
50 |
2,063 |
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1974 |
127 |
4,551 |
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1975 |
195 |
8,124 |
|
1976 |
166 |
6,419 |
|
1977 |
127 |
5,253 |
|
1978 |
117 |
5,483 |
|
1979 |
137 |
6,457 |
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1980 |
161 |
7,043 |
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1981 |
179 |
10,796 |
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1982 |
167 |
17,800 |
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1983 |
144 |
15,502 |
|
1984 |
182 |
27,557 |
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1985 |
200 |
37,401 |
|
1986 |
243 |
29,380 |
|
1987 |
306 |
48,468 |
|
1988 |
460 |
60,331 |
|
1989 |
677 |
172,606 |
|
1990 |
4610 |
1,475,998 |
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1991 |
5223 |
711,964 |
|
1992 |
5710 |
1,197,686 |
|
1993 |
6290 |
1,038,922 |
|
1994 |
5728 |
790,062 |
|
1995 |
4160 |
805,104 |
|
1996 |
4308 |
1,008,684 |
|
1997 |
4263 |
1,412,080 |
|
1998 |
3699 |
1,497,721 |
|
1999 |
3050 |
1,018,718 |
|
2000 |
3664 |
785,750 |
|
Grand Total |
54357 |
12,208,525 |
The amount of $12,208,525, reported in Table 2 includes approximately $2.7 million of victim fine surcharges, that if collected would be remitted to the Province, thus never considered revenue for the City of Ottawa.
The public consultation process is not applicable.
There are no legal or risk management impediments to implementing the recommendation in this report.
There is no financial implication as the Finance Department records revenue as received.
This report does not have any specific implications for the rural areas.
Specific details relating to provincial offences receivables deemed uncollectible in 2009 are on file with the Deputy City Treasurer, Revenue.
Upon approval of this report, staff will cease collections activity on the uncollectible POA defaulted fines identified in this report pursuant to MAG’s directives.
Status Report - Provincial Offences Act Defaulted Fines
RAPPORT D’ éTAPE - AMENDES IMPAYéES ENCOURUES EN VERTU DE LA LOI SUR LES INFRACTIONS PROVINCIALES
ACS2010-CMR-FIN-0007 CITY WIDE/À L'ÉCHELLE DE LA VILLE
As Chair of the Ottawa Police Services Board, Councillor El-Chantiry informed the Committee that the City of Toronto and its Police Services Board contacted him regarding the collection of fines, noting that Ottawa was doing a great job in this area. The Councillor asked if there was a collective effort from all the municipalities to work with the Province in order to receive more power in allowing to collect unpaid fines, and highlighted that other Provinces, such as Quebec, have greater power than Ontario in this area. Ken Hughes, Deputy City Treasurer, Revenue advised that there had been some communication with the Toronto Police Services Board (TPSB) and some of the province-wide organizations on a collective effort to identify some of the changes they would like to see in the legislation. Councillor El-Chantiry pointed out that the call from the TPSB initially looked at requests from other municipalities in asking the Province to negotiate data transfer agreements with other Provinces on their license database. He highlighted that the City of Ottawa is seeking over and above the additional enforcement options, such as the ability to stop a vehicle if there are significant unpaid fines on the vehicle.
In response to a question by the Councillor about the staff increase in the Collections Unit, Mr. Hughes recalled that additional Full Time Equivalents (FTEs) were approved in the last two budgets and their collections efforts were above that anticipated. He added that another group of FTE’s approved this year will be hired to fill the new positions and will be assigned to carrying out the collection strategy on parking tickets, which was piloted in 2009.
Councillor El-Chantiry asked for clarification on separating the traffic parking violations versus the Highway Traffic Act (i.e. speeding). Mr. Hughes noted that the staff report only deals with provincial offenses, such as speeding fines, trespassing of property, failure to provide proof of insurance, and liquor license offenses. He clarified that the purpose of the report was to remove uncollectible fines, which amount to $12 million, from the database.
In response to further questions, Mr. Hughes confirmed that if individuals neglect to pay the fines within the ninety day period, it is the City’s responsibility to collect. He noted that smaller fines are given to a collection agency, whereas larger ones are done internally.
In terms of the outstanding provincial offences totalling $51 million, Mr. Hughes explained that the City is able to locate individuals that are responsible for fines totalling $24 million. He added that certain procedures are periodically used when individuals cannot pay, such as ceasing assets, garnishment of salary, or a third party demand on their bank account.
In response to a question from Councillor Monette, Mr. Hughes indicated that there are fines that are issued under approximately 70 Provincial Acts, which would include fishing without a license, liquor license, and speeding, the latter being the most significant. At amalgamation, the Province downloaded $24 million outstanding provincial offence fines that the City initiated collection action on. Mr. Hughes also added that the first 25 cents of every dollar is collected by the Province for the victim fine surcharge fund, and the remaining money is provided to the municipality.
Councillor Monette confirmed that staff are asking to dismiss the uncollectible fines. Mr. Hughes clarified that under the Provincial Offences Act, these fines would always be attached to the person and will continue to be tracked. The report is asking to remove the fines from the overall total so that they no longer appear in the annual report. When staff provide performance reports, it will be measured against the true amount of fines that are outstanding and collectible.
With regard to the $12 million of uncollectable fines, some date back to 1970 and not enough detail is provided to allow staff to locate these individuals. Mr. Hughes added that if any of the individuals commit another offence and a fine is issued, then those fines that have been struck off the list will be brought back and staff will attempt collection.
Councillor Monette wondered why the City cannot collect from the estate when a person is deceased. Mr. Hughes noted that under the limitation clauses, if staff determine that someone has passed away and the estate has been settled, there are no longer options to collect. Additionally, processes are available where newly deceased individuals are identified but the City has no claim on the estate of the individuals that passed away between 1970 and 2001.
In terms of individuals who moved to other provinces such as Quebec, Mr. Hughes reported that there is an agreement with the Province of Quebec that allows Ottawa staff to access their database and their collection records. He added that agreements are not in place with the United States and most other Provinces due to economics with the exception of Provinces adjacent to Ontario. Councillor Monette asked if it would be worth looking at involving all Provinces in Canada and what it would cost to implement. Mr. Hughes explained that staff have the ability with some Provinces under access to information to apply and retrieve the ownership information. That has been successfully done in the past.
In further response to Councillor Monette, Mr. Hughes assured fines are levied against an individual and they remain for life, adding that the Ottawa Police have access to the City’s database.
Councillor Desroches claimed that people are not happy to pay fines, but would be more upset knowing that some individuals are getting away with not paying. He questioned if there was a way to cross reference the fines to other areas such as tax bills or permit applications. Mr. Hughes advised there are limitations that are placed on the City by the Municipal Freedom of Information and Privacy Protection Act (MFIPPA) legislation. He highlighted that when the Ministry of the Attorney General sent an auditor to review the records, and in looking at how staff were complying with the agreements, it was noted that the collection results on the transfer of fines were the best rates in the Province. As mentioned at the outset, the additional enforcement options that were requested will help to ensure that as many people as possible pay their fines.
Councillor Brooks noticed that third party collection agencies are used and asked what percentage is paid to these agencies. Mr. Hughes stated that three collection agencies are used, which were hired through a competitive process, and the arrangements are different with each agency. As well, the costs associated with collection and court are added to the amounts that have to be remitted by the offender.
Councillor Brooks’ final question was about the success to date of Paytickets.ca. Mr. Hughes announced that Ottawa is one of the first municipalities to use this service and it has been a successful way of collecting payment for outstanding fines.
That the Corporate Services and Economic Development Committee recommend Council approve ceasing collections activity on the uncollectible Provincial Offences Act defaulted fines identified in this report pursuant to directives from the Ministry of the Attorney General.
CARRIED with Councillors Monette and Chair Jellett dissenting.