Response to the motion made at the City Council meeting on January 25, 2012.
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1 M E M O / N O T E D E S E R V I C E Information previously distributed / Information distribué auparavant TO : Mayor and Members of Council DESTINATAIRE : Le Maire et les membres du Conseil FROM : Marian Simulik, City Treasurer M. Rick O'Connor, City Clerk and Solicitor EXPÉDITEUR : Marian Simulik, M. Rick O'Connor greffier municipal et chef du contentieux Ken Hughes Department of Finance, Revenue Branch (613) x Ken.Hughes@ottawa.ca Ken Hughes Département des finances, Recettes (613) x Ken.Hughes@ottawa.ca DATE : May 28, mai 2012 REF N O. : ACS2012-CMR-FIN IPD SUBJECT : Report to Council on Ontario Association of Police Services Boards White Paper entitled Provincial Offences Act Unpaid Fines: A $Billion Problem (the White Paper ) and other activities related to the collection of Provincial Offences Act fines. OBJET : Rapport au Conseil sur le livre blanc de l Association des commissions de services policies de l Ontario appelé «Livre blanc sur les amendes impayées imposées en vertu de la Loi sur les infractions provinciales» et autres activités liées à la perception des amendes découlant de la Loi sur les infractions provinciales. PURPOSE Response to the motion made at the City Council meeting on January 25, EXECUTIVE SUMMARY In 2001 responsibility for POA administration including courts and fine collection in the region was transferred from the Province to the City of Ottawa. Since this transfer of responsibility, issues have emerged which reflect a number of gaps under current POA arrangements. In particular, municipalities have had difficulty collecting outstanding fines fines which constitute the enforcement of the relevant acts and the primary source of funding for municipal court operations. While some recent improvements have been made, other options including expanding the use of licence suspension and licence plate denial, vehicle seizure, use of wheel clamps, and improved inter-ministry and inter-jurisdictional information sharing would improve municipal fine collection.
2 On November 1, 2011, the Ontario Association of Police Services Boards published a White Paper entitled Provincial Offences Act Unpaid Fines: A $Billion Problem (the White Paper ) noting that there are presently more than $1 billion in unpaid Provincial Offences Act fines owing to the Provincial Government and municipalities in Ontario. The White Paper notes that in relation to unpaid fines disregard for complying with court orders undermines the justice system and erodes public safety. The Paper identified the need to expand and improve on the range of tools available to municipalities to enforce and collect fines imposed under the Provincial Offences Act. On December 19, 2011 the Ottawa Police Service Board passed a motion supporting the Mayor s efforts in requesting the Provincial Government to adopt legislative changes that will achieve 100% compliance in the payment of Provincial Offences Act fines. At its meeting of January 25, 2012 City Council directed the City Treasurer to review the Ontario Association of Police Services Board White Paper and, in consultation with the City Clerk and Solicitor s Office, report back to the Finance and Economic Development Committee and Council on the status of the City s efforts to collect outstanding Provincial Offences Act fines. This memorandum responds to the motion and details the continued efforts of City Staff to collect outstanding Provincial Offences Act fines. BACKGROUND The Provincial Offences Act (POA), is a procedural law for administering and prosecuting provincial offences. These are non-criminal charges, laid primarily by the police, including offences under the Highway Traffic Act, the Compulsory Automobile Insurance Act, the Trespass to Property Act, the Liquor License Act, other provincial legislation, as well as municipal by-laws and minor federal offences. In 2001 responsibility for POA administration including courts and fine collection in the region was transferred from the Province to the City of Ottawa. Since this transfer of responsibility, issues have emerged which reflect a number of gaps under current POA arrangements. In particular, municipalities have had difficulty collecting outstanding fines fines which constitute the enforcement of the relevant acts and the primary source of funding for municipal court operations. Revenue Staff are using all of the collection tools permitted under current legislation. These tools include driver permit suspension, licence plate denial, garnishment of wages, and tax rolling of unpaid arrears. The City uses both internal and external collection resources to collect fines in default. Using these tools and resources the City of Ottawa has the highest collection rate for POA fines in the Province. Staff believe that collections, and thus the enforcement of provincial statues, would be improved with the introduction of additional collection tools and improved data sharing with the Province and other jurisdictions. While some recent improvements have been made, other options including co-ordinating licence suspension with licence plate denial and vice versa, vehicle seizure, use of wheel clamps, and
3 improved inter-ministry and inter-jurisdictional information sharing would improve municipal fine collection. DISCUSSION At the City Council meeting of January 25, 2012 the following motion was made: Moved by Mayor Watson Seconded by Councillor E. El-Chantiry WHEREAS there are $51 million and $30 million respectively in unpaid Provincial Offences Act and Parking fines owing to the City of Ottawa despite the City s industry-leading record in collecting these amounts; WHEREAS on November 1, 2011, the Ontario Association of Police Services Boards published a White Paper entitled Provincial Offences Act Unpaid Fines: A $Billion Problem (the White Paper ) noting that there are presently more than $1 billion in unpaid Provincial Offences Act fines owing to the Provincial Government and municipalities in Ontario; and WHEREAS the White Paper notes in relation to unpaid fines that disregard for complying with court orders undermines the justice system and erodes public safety ; and WHEREAS the White Paper has identified the need to expand and improve on the range of tools available to municipalities to enforce and collect fines imposed under the Provincial Offences Act; and WHEREAS the Ottawa Police Service Board on December 19, 2011, passed a motion supporting the Mayor s efforts in requesting the Provincial Government to adopt legislative changes that will achieve 100% compliance in the payment of Provincial Offences Act fines ; THEREFORE BE IT RESOLVED that Ottawa City Council direct the City Treasurer to review the Ontario Association of Police Services Board White Paper and, in consultation with the City Clerk and Solicitor s Office, report back to the Finance and Economic Development Committee and Council on the status of the City s efforts to collect outstanding Provincial Offences Act fines; and BE IT FURTHER RESOLVED that the Report outline any recommended legislative changes that would help to achieve 100% compliance in the payment of Provincial Offences Act fines. CARRIED Staff of the Finance Department and the City Clerk and Solicitor s Office have reviewed the report of the Ontario Association of Police Services Boards: White Paper on Provincial Offences Act Unpaid Fines. The report identifies that there is $1 billion in outstanding fines in the Province of Ontario. For the City of Ottawa there are $51 million and $30 million respectively in unpaid Provincial Offences Act and Parking fines. For the City of Ottawa this arrears remains in spite of the fact that the City of Ottawa has one of the best collection rates in the Province. The fines levied under the Provincial Offences Act (POA) are the enforcement mechanism for
4 contraventions of the relevant Acts, Regulations and municipal by-laws. Failure to collect these fines ostensibly negates the enforcement of these laws. Provincially, the numbers are growing at a rapid rate with about one third of all POA fines remaining unpaid. The report states that because of weak or non-existent penalties and ineffective collection methods, many offenders who choose not to pay their fines have never been held to account. The report states that targeted and effective measures are needed to reach these defaulters. The problem of unpaid POA fines is not a simple one as there are a wide variety of offences with a larger variety of penalties. It is further complicated by the number of defaulters, the numerous stakeholders and varied collection successes by jurisdiction. The lack of accessible data impedes any type of useful analysis that would facilitate collection. The report found that Governments and ministries continue to operate in silos, missing opportunities to pursue more effective information sharing and collaboration. Of the outstanding fines (see chart below) a third were levied under the Highway Traffic Act, and another third are under the Compulsory Auto Insurance Act and another third to other convictions (including violations of the Liquor Licence Act, Occupational Health and Safety Act, and Trespass to Property Act) with almost all (91%) of fine defaulters being Ontarians at the time of issue. Trespass to Property Act $19,187, % Occupational Health & Safety Act $20,917, % Other $147,182, % Compulsory Automobile Insurance Act $354,357, % Other By-Laws $41,823, % Liquor Licence Act $56,206, % Highway Traffic Act $314,663, % Source: ICON Database July 2010, OAPSB White Paper: POA Unpaid Fines
5 The report found that there has been varying success with the following collection tools: Licence plate suspensions; Driver s licence suspensions; Use of collection agencies; Ability to add unpaid fines to property tax rolls; and Repeal of the statutory limitations period. In spite of the use of these collection tools the $1 billion in unpaid fines remains uncollected and continues to grow. The major challenges as identified in the report are: Lack of available data; Lack of coordination within the government; Need for greater stakeholder engagement; Lack of alternative penalties; Need for simple, flexible payment methodology; Lack of incentives to pay; Lack of follow-up; and Need for better enforcement powers. These challenges should have come as no surprise, as they are not new. The City of Ottawa and other municipalities along with other stakeholders have previously identified these challenges and asked for changes since the collection of unpaid POA fines was downloaded by the Province. As the OAPSB report provides: The persistent problem of unpaid POA fines undermines the justice system, frustrates law enforcement officers and municipal fine collection agents, and denies municipalities and the provincial government desperately-needed revenues. To address these issues the Ontario Association of Police Services Boards (OAPSB), based on their consultation with stakeholders recommends, the Government of Ontario: Provide better data for better decision-making; Improve inter-ministry collaboration and information sharing; Embrace stakeholders, by holding regular discussion forums and acting on their suggestions; Allow courts to assess ability to pay, and offer alternative sentences; Provide better customer service to those persons paying fines; Provide more carrots and sticks, including discounts for early fine payment, stiffer late penalties, and payments in accordance with the chronological order of sentencing; Help municipalities to follow up on outstanding fines ( ask them, and they might pay ); and Institute stronger, meaningful collection sanctions for fine defaulters, including broader driver s licence and licence plate denial, vehicle impoundment, and garnishment of income tax refunds. OTHER RELEVANT ACTIVITIES City of Ottawa staff continue to work toward changes to provincial legislation, policies and processes that will allow additional collection and enforcement options. These changes will improve collection rates and thus the enforcement of the Provincial Offences Act and the relevant
6 associated acts. Staff are working with other stakeholders to identify and bring about the necessary changes. Staff are supportive of the legislative changes identified by all of the stakeholders. Association of Municipalities of Ontario (AMO) In November 2011, AMO established a task force of municipal court officials and finance staff (including a City of Ottawa representative) to review the above recommendations. The AMO s Board considered these issues and put forward a number of recommendations to improve fine collection and the administration of justice in Ontario. Among them include: 1. An expansion of the list of offences for which licence plate denial can be used to, for example, driving and auto insurance related tickets. About 70% of unpaid fines relate to offences under the Highway Traffic Act and the Compulsory Automobile Insurance Act. Currently, only parking tickets, unpaid Highway 407 tolls, and red light camera infractions can be enforced with licence plate denial. 2. Permit Highway Traffic Act and the Compulsory Automobile Insurance Act infractions to be paid at Ministry of Transportation (MTO) offices. Currently, Ontarians denied driver s license renewal because of unpaid fines must return to the municipal court office to pay those fines before having their driver license re-instated. This could easily be a one step process for citizens and result in improved fine collection. 3. Complete database improvements at the Ministry of Transportation to allow the cross referencing of plate and licence database. A suspended driving license is not tied to the licence plate of the vehicle that is owned by the driver. MTO could improve the collection of unpaid fines by coordinating this data. Further improvements could be made by linking the Ministry of the Attorney General s ICON database with MTO s databases. Changes to Ontario Regulation 679/92 and the statutory late payment fee (which has remained $20 since 1992), may help to offset provincial government expenses related to these database improvements. They would also greatly improve the collection of fines. 4. Municipalities urge the Ministry of Transportation to tighten up the plate denial process. Audit controls on multiple plates being issued to the same driver (including better cross referencing) would make the plate denial process more effective. 5. Eliminate the cherry picking of fines and sanctions. AMO recommends that offenders be required to pay outstanding fines in chronological order as opposed to picking to pay those fines which carry the least penalties first. 6. Increase the provincially established set fine amounts. Maintain current set fines as an early payment incentive. Review set fine amounts on an annual basis. This would offer a carrot to offenders for the early resolution and payment of fines. It would also ensure that penalties remain a penalty. Set fine amounts have remained unchanged for approximately 20 years. 7. Improve the administration of justice by requesting the Province re-institute warning letters prior to licence suspension.
7 This would provide those offenders with a final opportunity to pay their fines prior to their licence being suspended by the Ministry of Transportation. 8. Provide greater municipal access to Ministry of Transportation data. Currently municipalities have access to some Ministry of Transportation data under an agreement for the purpose of recovering welfare over-payments. Expanded access to the MTO database for the collection of unpaid fines would enhance municipal fine collection efforts. 9. Make all fees municipalities charge for late payment enforceable. Currently such fees are not specified as enforceable under the Provincial Offences Act. 10. Give priority lien status to fines collected on the property tax roles. Municipalities were provided with the power to collect unpaid POA fines by adding them to a property tax bill. Enhancing this power slightly by granting fines priority lien status would improve fine collection. Commission on the Reform of Ontario's Public Services, PUBLIC SERVICES FOR ONTARIANS: A PATH TO SUSTAINABILITY AND EXCELLENCE (aka the Drummond Report) On February 15, 2012 the provincial government received the report of the Commission on the Reform of Ontario's Public Services. The Drummond report addressed an extensive list of issues. It also addressed the issue of unpaid POA fines. The report stated: Recent attention has been brought to the estimated $1 billion in uncollected fines related to the Provincial Offences Act (POA). Collection mechanisms should be improved so that the estimated $2.5 million unpaid POA fines can be recovered. The province should take more aggressive action to collect this money; for example, it could suspend licences and registrations, add POA fines to the offender s property tax bill and offset tax refunds against unpaid POA fines. Specifically there were five recommendations directed at resolution of the uncollected POA fines issue: Recommendation 18-10: The Ministry of Finance should take the lead by providing assistance to municipalities in developing policy for the collection of unpaid Provincial Offences Act fines in the province. Recommendation 18-11: Use licence and registration suspensions as a tool to facilitate the collection of Provincial Offences Act fines related to vehicles, including parking, speeding and automobile insurance violations. Recommendation 18-12: Allow fines to be added via the property tax roll by adding Provincial Offences Act fines to the offender s property tax bill, even if the property is jointly owned. Recommendation 18-13: Offset tax refunds against unpaid Provincial Offences Act fines.
8 Recommendation 18-14: Require that recipients of government grants or refundable tax credits, contracts, loans and loan guarantees are first in good standing with the government in terms of accounts receivable and have no outstanding taxes due before providing assistance. Enhanced Collection of Defaulted POA Fines, Provincial/Municipal Working Group In response to the Drummond report and the statements made by the Finance Minister in the most recent provincial budget, the Minister of Transportation has been tasked with the establishment of an ADM-level Steering Committee supported by a Provincial/Municipal working Group. The objective of the ADM-level steering Committee is develop a collaborative and feasible action plan designating ministry and municipal specific deliverables that will improve the collection of defaulted POA fines... This Provincial/Municipal working Group includes a City of Ottawa representative. Ontario Municipal Tax and Revenue Association (OMTRA) POA Working Group OMTRA (formerly the Association of Municipal Tax Collectors of Ontario AMTCO) has established a POA working Group (including City of Ottawa representatives) to identify challenges to the collection of POA fines, determine resolution to those challenges, establish best practices across the Province and educate municipal staff to improve the collection of POA fines. OMTRA has developed a solution to the challenge of adding POA fines from one jurisdiction to the property tax roll in another jurisdiction and will be piloting this solution this summer. CONCLUSION Some recent improvements have been made in the supporting Provincial Offences Act legislation. Nevertheless, other options including expanding the use of Licence Suspension and Licence Plate Denial, vehicle seizure, use of wheel clamps, and improved inter-ministry and interjurisdictional information sharing would improve municipal fine collection. City staff will continue to work with other municipalities, organizations and stakeholders to maintain the momentum on the required changes to improve collection of outstanding Provincial Offences Act fines. Marian Simulik and M. Rick O Connor cc: Ken Hughes, Deputy City Treasurer Stuart Huxley, Legal Services SUPPORTING DOCUMENTATION: None
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