Corruption in Canada

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The Corruption Perceptions Index ranks Canada in the top 10 least corrupt countries in the world.[1] However, in recent years, corruption is increasingly a problem in government, industry and non-governmental organizations. For instance, in 2013, the World Bank blacklisted SNC Lavalin and its subsidiaries from "bidding on its global projects under its fraud and corruption policy" due to the Padma Bridge scandal.[2] Canada ranks at the bottom of the bribery-fighting rankings, "with little or no enforcement of anti-bribery measures".[3] The 2014 Ernst & Young global fraud survey found that "twenty percent of Canadian executives believe bribery and corruption are widespread in this country".[4] According to a study by Graduate School of Public Policy (U of S), "a large proportion of Canadians see their politicians and their institutions as fundamentally corrupt".[5]

Corruption by region[edit]

Ontario[edit]

Corruption in Ontario is increasingly a major issue in government, civil service, business and non-profit sectors. In the last decade, the Ontario Liberal government has faced serious and high profile corruption cases including eHealth Scandal, Ontario power plant scandal, and Ornge scandal. These cases have implicated the leadership of the Ontario Liberal party, including former three time premier Dalton McGuinty of corruption. The successive Kathleen Wynne led liberal government is facing several corruption cases including for offering bribery during elections.[6]

RCMP has alleged that Ontario Provincial Police Association leaders, including President James (Jim) Christie, Vice-president Martin Bain and Chief administrative officer Karl Walsh have committed fraud, money laundering and corruption. The charges include "unusual investment of union money in condos in the Bahamas", "formation of a company to provide exclusive travel services for both union business and personal travel by members", "formation of a consulting company" that billed union $5000 per month, and for "questionable vacation and travel expenses billed to the union".[7]

Quebec[edit]

Among the Canadian provinces, Quebec is perceived to have the most entrenched and widespread corruption problem.[8] The Charbonneau Commission established to investigate corruption in Quebec has uncovered long running, widespread corruption cases including "price-fixing schemes among construction companies bidding on municipal governments", "illegal donations to the province’s major political parties from some of its biggest engineering firms" and links between "FTQ, the province’s biggest union federation, and alleged members of organized crime".[9]

In 2015, employees of EBR Information Technology firm, IBM and Revenu Québec were arrested for fraud, conspiracy and breach of trust in relation to computer equipment and services contracts to government.[10] There is a widespread "financial and management irregularities with the Quebec government's computer networks."[11]

Aboriginal lands[edit]

Canadian aboriginal communities face severe corruption issues from election of officials to the councils' day-to-day management of the reserves.[12]

Corruption by sector[edit]

Health[edit]

Dr. Shiv Chopra, a former employee of Health Canada and a whistle-blower has criticized Health Canada officials for bypassing safety and efficacy regulations to please product manufacturers, for systematically colluding with "corporations in making extra-parliamentary decisions involving the imposition of new risks on society" and for "undermining their responsibilities to protect human health in the interests of capital making profits".[13] Dr. Michele Brill-Edwards issued similar warnings and concerns earlier.

Some doctors and clinics have been found to overbill and/or double bill the Canadian Health System.[14][15] Some Walk-In Clinics intake regular patients at a higher cost to the system without informing the patients about the costs or other options.[16] In Canada, Doctors do not disclose the costs of visits or procedures to the patients. That information can only be obtained through a freedom of information request. This lack of transparency contributes to this corruption.

Some dentists commit corruption by overcharging, changing the codes of the procedures, by waiving co-payment and by treating a different patient than the insurance holder.

In Alberta, a medical inquiry established the existence of queue-jumping and illegal fast tracking of private clinic referrals.[17] Alberta's former head of Health Services Stephen Duckett noted that "preferential access to care was a common practice when he took over and politicians had fixers who could get valued constituents faster treatment."[17]

Education[edit]

Some private high schools have been found to illegally and unethically aid students earn inflated grades, credits and credentials.[18][19] Thus, those with financial means are able to access top university programs and scholarships at the expense of merit students.[18][20] These schools are referred to as “credit mills” or “credit shops”.[20] Lax governmental oversight is a major cause of this corruption.[18]

Majority of students at Canadian universities are engaged in cheating.[21] Among the cheaters, a disproportionate number are international students.[22] "Students who cheat are unlikely to be caught and face few penalties when they are."[21][23]

Tax[edit]

Canada experiences a very high rate of Tax evasion.[24] High-net-worth individuals and companies use offshore tax havens to illegally avoid paying taxes. Canadians have $170 billion parked in the world's top ten tax-haven countries.[25] It is estimated that Canadian federal and provincial governments lose $8 billion per year due to tax havens alone.[25] Black market or under the table commercial activities also contribute to tax avoidance. The full cost of tax evasion is estimated to be $80 billion per year.[24] Tax evasion and corruption are facilitated by administrative corruption and inefficiency of the Canada Revenue Agency,[26] Canadian and foreign banks[27] and lawyers.

Due to Canada's lax regulations, Canada is among the top countries for anonymous shell companies.[28] Shell companies are often used for tax evasion, money laundering, terrorist financing and organized crime.

Law Enforcement[edit]

RCMP's own study found 330 internal corruption cases from 1995 to 2005.[29] "Improperly giving out police information was the most common type of corrupt behaviour, followed by fraud, misuse of police officer status, theft and interference with the judicial process."[29] This is likely to be understatement of true numbers as RCMP has admitted to not tracking "hundreds of cases of serious misconduct committed by Mounties across the country for years".[30] In 2013, "almost 300 current and former female Mounties have come forward to join a class-action lawsuit alleging harassment within the ranks of the RCMP."[31] A 2014 report by an undergraduate sociology student at the University of Western Ontario explains the hierarchical structure and subculture of law enforcement in Canada as well as the nature of hero worship in Canadian society that makes it almost impossible to prevent and punish unlawful police misconduct in the country.[32]

As noted above, Ontario Provincial Police Association leadership has allegedly committed fraud, money laundering and corruption.[7]

Non-profit sector[edit]

In Canada, donations to recognized charities receive tax refunds. This system has been abused extensively. "Typically, tax-shelter firms hook up with a little-known charity that becomes a sort of tax receipt mill, suddenly writing millions of dollars in bogus receipts and making grandiose claims of saving the world. Some $3.2 billion in receipts given in the last few years to 100,000 Canadians have either been disallowed or soon will be".[33]

Many charities have been found to be shell organizations for profit based schemes.[34] A Toronto Star investigation revealed that "self-reported information is so riddled with inaccuracies as to be absolutely useless to a donor" and federal government does not verify the claims by charities of their area of "good works".[34] Further more, "The Star found the primary regulator, the federal Charities Directorate, is virtually powerless to deal with problem charities."[34]

Several charities in Canada have been found to be front organizations for terrorist organizations or organized crime.[citation needed]

Insurance[edit]

Auto insurance fraud involving scammers, auto repair shops, paralegals and medical clinics is widespread in Ontario. It is estimated that the auto insurance fraud costs Ontario drivers $1.3 billion per year.[35] Other forms of insurance fraud are also relatively common, including that related to homes and property, and disability and workers' compensation which anecdotal evidence, at least, suggests is rife with abuse and fraud.

Notable corruption cases[edit]

Anti-corruption mechanisms[edit]

Public Service Commission[edit]

Canada's public service is set up to work independently from the political party in power. The mandate of the Public Service Commission is "protecting public service appointments from political interference and ensuring a professional, non-partisan public service".[36] The Office of Public Service Values and Ethics is tasked with implementing values, ethics and policies intended to prevent corruption.[37]

The current Conservative Party government has been criticized for political interference in an array of administrative bodies including Statistics Canada, Elections Canada, Canadian Military Complaints Commission, Canadian Nuclear Safety Commission, Public Works and the Supreme Court.[38]

Auditor General, Ombudsman[edit]

Canada's federal and provincial governments have independent and strong Auditor General offices. The Auditor General reports to the parliament, not to the government. Annual and special audits are conducted to examine government's activities and hold it to account. Auditor General reports have brought to light major scandals, corruption, waste and inefficiencies leading to change in governments.

Ombudsman offices are tasked with investigating public complaints about government. Special ombudsmans or commissioners are tasked with investigating and reporting to parliament about key areas. Privacy Commissioner of Canada, Environment and Sustainable Development Commissioner and Information Commissioner of Canada are examples of such special offices.

Civilian oversight bodies[edit]

Civilian oversight bodies are used to hold account, to check power and provide input for government and industry bodies. They are specially used to hold account the police, RCMP, military and CSIS.

In 2012, Office of the Inspector General, which was a key oversight body for the Canada's spy agency CSIS was abolished by the Conservative government.[39] The government said the oversight functions were consolidated within the civilian Security Intelligence Review Committee.

Access to Information Act[edit]

Canada's Access to Information Act came into force in 1983. However, in recent years the legislation has been severely criticized to be outdated and in-effective. Centre for Law and Democracy ranks Canada 56th out of 95 countries in terms of the strength of the Access to Information legislation.[40] Both Federal and various Provincial and Territorial access to information systems are overburdened, in part, by the refusal of many governments and agencies to informally release various data either as a matter of routine course or upon informal request, instead demanding that written requests be made pursuant to relevant access to information legislation, subsequently triggering a cumbersome and time consuming formal process for frequently trivial and even obviously public information. As of 2015 there are thousands of individuals employed full-time throughout all levels of government and their agencies tasked with processing formal requests for access to information; this represents a cost to the Canadian taxpayer of hundreds of millions of dollars annually and does not include additional expenses including outside legal and other professional opinions, tribunal hearings, motions and appeals in courts, multiple access to information commissions and tribunals across the country, and various other expenses that likely bring the annual cost to the taxpayer into the billions of dollars.

An investigation by the Information Commissioner of Canada has found that the conservative government's staff have systematically interfered with the processing of access to information requests.[41]

Conflict of Interest laws[edit]

All levels of governments enforce conflict of interest laws for civil servants and politicians. The laws generally require disclosure of actual or perceived conflict of interests and to take appropriate measures, such as removing themselves from decisions.[42]

Conflict of interest laws have been used to highlight an array of improper dealings by politicians. For instance, in 2015 an Ethics Commissioner report found "Government Services Minister Diane Finley breached conflict-of-interest rules by giving preferential treatment and federal funding to a project" that received "one of its lowest ratings" by an assessment done by Department of Human Resources and Skills Development.[43] "The proposal was submitted for the Canadian Federation of Chabad Lubavitch by Ottawa Rabbi Chaim Mendelsohn, who had close ties to the Conservative party, the Prime Minister’s Office and then-foreign affairs minister John Baird."[43]

Federal Accountability Act[edit]

Federal Accountability Act is a major anti-corruption legislation passed in 2006 by the conservative government. It introduced several mechanisms to combat corruption including Commissioner of Lobbying, Parliamentary Budget Officer, Public Sector Integrity Commissioner, Ethics Commissioner, limits to election donations and enhancement of lobbying rules.

Public Servants Disclosure Protection Act[edit]

Public Servants Disclosure Protection Act is a whistleblower protection act. The act "provides a confidential process for employees in Canada’s federal public sector to come forward with any information about possible wrongdoing within the federal government and state corporations", except Canadian Security Intelligence Service (CSIS), Communications Security Establishment Canada (CSEC) and the Canadian Forces.

Corruption of Foreign Public Officials Act[edit]

Canada signed and agreed to implement the OECD Anti-Bribery Convention and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Corruption of Foreign Public Officials Act (CFPOA) was enacted in 1999. The CFPOA applies to persons and companies, aiming to prevent and punish the acts of bribery of foreign public officials to obtain or retain a business advantage. Companies have to develop effective compliance programs with focus on specific areas relevant for the CFPOA.[44]

The aim of the law is to monitor, punish and prevent bribery and other criminal acts being committed by Canadians and Canadian companies in foreign countries. In 2014, Ottawa consultant Nazir Karigar was the first person to be convicted under this law. He was convicted for the Air India bribery scheme.

A 2013 progress report indicates that Canada has failed to implement many of the recommendations and earns an overall score of "Moderate". OECD criticized Canada for lack of prosecutions and lack of resource allocation to address corruption.

Opendata, open government, and transparency initiatives[edit]

Canadian governments at all levels and citizen organizations have undertaken various Open data, Open government and transparency initiatives. The Open Government Strategy was launched by the federal government in March 2011. Various datasets have been released under municipal open data initiatives such as Toronto Open Data. Sharing of MP/MPP/Councilor expenses online, sunshine lists, posting detail program budgets and expenditures online and crime statistics are some examples of open data being released online. Open data has increased public scrutiny of abuses, helping monitor, prosecute and prevent corruption.

International conventions and transparency initiatives[edit]

Canada has ratified United Nations Convention against Corruption and the OECD Anti-Bribery Convention.

The government of Canada is part of the multilateral Open Government Partnership initiative. Canada joined the International Aid Transparency Initiative (IATI) in 2011. Canada was a supporting country to the Extractive Industries Transparency Initiative, and it intends to implement the EITI.

First Nations Financial Transparency Act[edit]

First Nations Financial Transparency Act requires First Nation bands to publicly disclose their financial statements, including salary information of their councillors. Disclosure of this information has highlighted relatively high salaries of many chiefs, in comparison to extreme poor living conditions of their members. For instance, Shuswap band has 87 on reserve members. Its Chief Paul Sam earned $202,413 tax free salary while many band members endured winters without water or electricity.[45] First Nations Financial Transparency Act has promoted higher vigilance regarding band leadership's activities and financial management by members and fellow councilors.

Gallery[edit]

See also[edit]

References[edit]

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