By Sneh Duggal, David Hains and Jessica Smith Cross

Auditor General Bonnie Lysyk tabled a whopping report that slammed the government on subjects ranging from retirement homes to condo oversights to Indigenous affairs.

The sprawling annual report found, among other items, that the government needs more transparency at the Alcohol and Gaming Commission of Ontario (AGCO), that the Bereavement Authority of Ontario (BAO) needs to do a better job safeguarding the interests of people who use the services, and that Metrolinx underestimated the cost of a major transit project.

Lysyk's report also carved out a space to criticize the government on its advertising, noting that the government spent more than twice as much on the expenditures in 2019-20. She found 35 per cent of the value of the reviewable ads would have been deemed partisan by the AG, but the Liberals stripped her of the power to reject those ads in 2015.

Lysyk's annual report follows two other critical reports that questioned the government's performance. In November, she released her annual environmental report as well as a special report of the government's response to the coronavirus.

Rather than accepting the environmental findings, the PC government prepared a forceful response to Lysyk's, with the premier sarcastically dismissing her as out of her depth and staffers releasing a 21-page "fact-check" outlining where and why they disagree with the AG.

The premier also previously opined that he thinks the 10-year term for the AG is too long and she should be held accountable too.

QP Briefing has full coverage of the report, including summaries of each section.

Check back in later in the day for deep dives on specific sections and a look at the political reaction.

Summary sections (click to jump to a certain section, or scroll through each one)

Alcohol and Gaming Commission of Ontario
Bereavement Authority of Ontario
Blood Management and Safety
Business Case Development in the Ontario Public Service
Condominium Oversight in Ontario
Education Curriculum Development, Implementation and Delivery
Electrical Safety Authority
Indigenous Affairs in Ontario
Metrolinx IT and governance
Museums and Galleries
Retirement Homes Regulatory Authority
Supportive Services for People with Developmental Disabilities
Virtual Care—Use of Communication Technologies for Patient Care

Alcohol and Gaming Commission of Ontario

The auditor general says that the Alcohol and Gaming Commission of Ontario (AGCO) needs to be more transparent.

"Despite the fact that the AGCO receives subsidies and spends about $86 million annually, we found that the AGCO, contrary to a government directive, does not produce and publish audited financial statements," the auditor general said. "We were surprised to learn it is the only regulatory government agency in Ontario to not publish such an important accountability document."

She added that the agency has significant latitude to choose which facilities to inspect, but the rationale for which ones it does inspect isn't clear. And she also encouraged the AGCO to be more vigilant about compliance measures, both to ensure that activities like money laundering in casinos are not occurring, and to provide a benchmark against which to judge the agency.

The AGCO also needs to get a better handle on its oversight of the cannabis industry, she added.

She found that despite the legalization of cannabis, illegal sales accounted for 80 per cent of the recreational industry in 2019-20. She added that the AGCO is not providing adequate oversight for cannabis retail locations, including tracking inventory.

Bereavement Authority of Ontario

The regulator that oversees the province's bereavement sector needs to do more to safeguard Ontarians who use its services, at an especially emotional and vulnerable time.

The auditor general's office conducted a "secret shop" test of the industry by going out to 100 licensed funeral homes, transfer services, cemeteries and crematoriums. The findings show that there was a range of tactics and pricing, with half of the mystery shoppers reporting pressure sales tactics and/or misleading information. The price of a basic cremation also had a wide range in cost across 70 operators, going from a low of $512 in Windsor to $8,000 in Toronto. Death-related documentation ranged from $65 to $495.

Lysyk stated that the Bereavement Authority of Ontario, the regulator that oversees the sector, needs to do more to advocate for and protect the perspectives and interests of consumers. "They may not be in the best state of mind to educate themselves on the full details of certain products or services offered by funeral homes, transfer services, cemeteries and crematoriums, or which products and services are optional or required by law."

The AG also found that there was a lack of pricing transparency and industry standards on fees, deposits and cancellation policies. She wrote that this made making informed consumer decisions difficult.

Some institutions weren't following basic procedures. The AG found that over 10 per cent of cemeteries were operating without a valid license. Nine per cent of cemeteries haven't had a licence since 2016. Forty-one per cent of funeral homes filed their annual reports late. Only 3.4 per cent of facilities received an inspection from 2016 to 2019.

The BAO was formed in 2016 to provide a one-stop regulator to govern the broader bereavement sector. It replaced the licensing and enforcement duties of the Board of Funeral Services (BOFS) and the Cemeteries Regulation Unit (CRU) in a single body. It is structured as a Delegated Administrative Authority and is funded through the fees it collects from the industry it regulates, but is not considered self-regulating because the government retains responsibility through the legislation that established the DAA.

Blood Management and Safety

Blood vials at a Toronto clinic. KEITH BEATY/TORONTO STAR.

The auditor general also found that while Ontarians have access to safe blood components and products, more needs to be done to monitor supply and demand after the province experienced "short-term shortages" twice during the past five years. This number bumps up to eight when including "potential shortages" over this same period ending in July of this year.

Neither the Ministry of Health nor Canadian Blood Services (CBS), a national non-profit, collects information on the blood components and products that hospitals use and these facilities aren't required to report this information either, the auditor general's report stated, adding that this data is important to determine how much is needed.

"The collection of this information from hospitals would help better forecast future supply needs, which is particularly important given the delays in surgeries as a result of COVID-19," Lysyk stated.

There is also concern about the growing reliance on blood plasma from outside Canada, with domestic supply accounting for 13.7 per cent in 2019-20 — short of CBS's goal of 50 per cent. Blood plasma is needed to produce a blood product called immunoglobulins, and the demand for this has increased in recent years.

Business Case Development in the Ontario Public Service

This year the auditor also studied the decision-making process at Treasury Board, evaluating the business cases that ministries prepare when seeking additional spending as well as the assessment of those business cases by civil servants at the Treasury Board Secretariat.

Those reports inform the cabinet ministers who sit on the Treasury Board and make the ultimate decisions on those spending requests.

The auditor found that process has improved in recent years but there is “still the opportunity to better support the decision-making process by improving the timing, quality and completeness of business cases, assessment notes and evidence-based recommendations.”

Lysyk also flagged that the civil servants at the secretariat abstained from providing recommendations on high-risk decisions, leaving that to the politicians on the board. She said that occurred with 72 decisions between April 2015 and April 2020 — including all requests related to the Fair Hydro Plan. Another example was an infrastructure project named after a sitting MPP, apparently a reference to the James Bradley Environmental Sciences Centre announced by the former Liberal government in 2017.

One reason her office was given for advice being held was when the civil service did not think the business case should be approved but there was government pressure to approve it.

Condominium Oversight in Ontario

Condo development in downtown Toronto. Andrew Francis Wallace/Toronto Star.

The auditor general surveyed condo owners and condo boards this year and found purchasers may not fully understand the financial implications of buying a condo, including maintenance fees and condo reserve funds. For instance, they may not know that fees tend to go up from the levels set by developers.

The Condominium Authority of Ontario and the Condominium Management Regulatory Authority of Ontario were created in 2017 to regulate the sector, by the audit identified several persistent concerns, including unlicensed condo managers and limited action on complaints.

Overall, she found the bodies “do not sufficiently protect condo owners against common issues that they may encounter in their daily condo living.”

Education curriculum development

TORONTO. Education Minister Stephen Lecce file photos from an announcement at Ogden Junior Public School, 33 Phoebe Street Toronto.(Rene Johnston/Toronto Star) Rene Johnston/Toronto Star

The government needs to hit the books.

Many textbooks used in Ontario's publicly funded schools are "old and not relevant," the auditor general's report stated. Lysyk found that many curricula haven't been revised in more than 10 years and the books used for these subjects are just as dated.

But Lysyk did note that the ministry has made "advancements in digital learning, including digitization of the new math curriculum and online content for various subjects, training for teachers on remote learning, and provisions for technology for students," during the COVID-19 pandemic.

Lysyk's office also found that while the Ministry of Education "followed appropriate steps in its review and revision process" in most cases when developing or revising curricula, it did not provide schools boards and staff with training for the Grade 10 career studies and the high school First Nations, Métis, and Inuit studies curricula in 2019.

As for how the province's curricula are delivered, Lysyk found the process may not be "properly followed."

"Our audit concluded the Ministry of Education and school boards do not have formal processes to enable them to gain assurance the curricula are being delivered consistently to a high standard across the province," stated Lysyk in the report. "Nor does the Ministry have assurance or processes to determine that students are being consistently assessed against curriculum-learning expectations."

Electrical Safety Authority

Lysyk said the Electrical Safety Authority does many "unnecessary inspections that do not improve public safety" in her report.

She noted that while the ESA, which was mandated in 1999 to help improve public electrical safety, introduced a new "risk-based inspection approach" in July with the aim of reducing inspections by 10 per cent, "there is little assurance that inspectors will prioritize high- risk inspections." Lysyk's report stated that of 113,000 inspections of simple installations between 2015-2019, 45,000 were "not required."

The auditor general also said the ESA could further use technology to reduce inspection costs. The ESA started temporarily doing remote inspections in April due to COVID-19.

"Many inspections of electrical installations can be done remotely by examining photos or videos of the installation," Lysyk said. "This saves inspector travel time and vehicle costs."

Indigenous Affairs in Ontario

TORONTO, ON- FEBRUARY 19 - Minister of Indigenous Relations and Reconciliation Hon. Greg Rickford as the Queen's Park Legislative Assembly sits for the Winter Session at Queen's Park in Toronto. February 19, 2019. Steve Russell/Toronto Star

The Indigenous affairs ministry "needs to get a better handle" on the programs and services available to Indigenous people across the province, Lysyk's report stated. The auditor general noted that the ministry could only provide her team with a list of 30 programs, 11 of which are on its own website, that support Indigenous people, but that this is far short of the 140 programs offered.

"This shows that the Ministry was not familiar with many of the Indigenous programs being offered by other ministries," the report stated.

"The problems with this decentralized approach are compounded by the absence of oversight," she said. "The Ministry does not track or monitor the effectiveness of these programs and services at a time when there are considerable social and economic disparities between Indigenous and non-Indigenous people in Ontario."

Lysyk said although the province committed to publicly reporting on the progress of initiatives related to "health, employment, education and justice in response to the 2015 Truth and Reconciliation Commission report, the province has not done so." Reports created in 2016 and 2018 on social and economic indicators were not publicly released, Lysyk's team found.

Her report also highlighted the need for internet services, stating that only 17 per cent of First Nations households on reserves currently have access to internet. This limits "health, social and economic progress," the report stated, adding that this includes people's access to online learning, eHealth services and online business opportunities.

The auditor general also touched on land claims, saying the ministry "does not effectively manage its land claims settlement process in an accountable manner and does not establish expected timelines, milestones or costs for the settlement of land claims." Lysyk noted that 19 of the land claims her office reviewed took 22 years, on average, to settle.

Metrolinx IT and Governance

TORONTO, ON - MARCH 16 - A GO train travels eastbound as it crosses Beechgrove Drive near East Point Park on March 16, 2018. Carlos Osorio/Toronto Star

The auditor devoted two chapters of her report to Metrolinx, a repeat target of her audits.

She found that information technology problems are causing train delays resulting in lost revenue, funding nearly 4,500 glitch-related delays and cancellations in the last five years. The report includes an oft-repeated theme of her IT-focused audits — the agency relies too heavily on higher-cost contract staff, instead of full-time staff.

The PRESTO system is one of the IT headaches. She found that "after 14 years, the PRESTO automatic fare system still has not been fully adopted across the Greater Toronto and Hamilton Area (GTHA). Riders still do not have two key elements of PRESTO: the convenience of integrated fares across the GTHA and the ability to use their own debit or credit cards to tap and pay."

She noted Metrolinx plans to "competitively procure" those services in anticipation of the current contract expiration in 2022.

Lysyk flagged redundant system purchases, project delays and cost overruns. She also took aim at the agency's governance and operations.

She found that Metrolinx was aware that the Hamilton Light Rail Transit project would cost more than the $1 billion that the former Liberal government publicly reported and she deemed the $5.5-billion cost estimate provided by the current government, prior to the cancellation of the project, more reasonable.

But in one bright spot, she found that the provincial transit agency's on-time performance "is comparable to other similar public transportation systems," with trains on schedule more than 90 per cent of the time.

She also noted something that won't be a surprise to many commuters — when customers are eligible for fare refund because their train is delayed 15 minutes or more, or cancelled, because of a problem within Metrolinx's control, they do not always get it.

Museums and Galleries

The Royal Ontario Museum in downtown Toronto. STEVE RUSSELL / TORONTO STAR FILE PHOTO

The AG found that the major Ontario museums and galleries are not doing enough to ensure that acquisitions meet objectives, and that a large amount of the catalogue isn't displayed to the public.

The Ministry of Heritage, Sport, Tourism and Culture Industries provides about $52 million in annual funding to the Art Gallery of Ontario, Royal Ontario Museum and McMichael Art Collection, and the institutions also received significant donations that received corresponding tax receipts, the AG noted.

But the acquisitions weren't always available to the public, she noted. In the case of the AGO, 70 per cent of the collection has not been displayed in the gallery since it was acquired. And half of the McMichael's collection hasn't been displayed in the past 20 years, she added.

"They...need plans to promptly display more of their newly acquired works so that Ontarians have the opportunity to enjoy them," Lysyk said.

She also noted that the institutions live up to best practices when it comes to keeping their collections in good condition when it storage. But they need to do a better job when it comes to checking on the inventory, and also doing regular re-appraisals of the catalogue for insurance purposes.

Retirement Homes Regulatory Authority

The auditors also examined the regulation of the province’s 770 retirement homes, which provide housing for seniors on a private-pay basis. Some have been hard-hit by COVID-19, resulting in 209 resident deaths by the end of August.

The homes are regulated by the Retirement Homes Regulatory Authority under the Ministry of Seniors.

Lysyk reported that residents have more intense health needs than retirement homes were designed for. She found some homes don’t have enough staff — and as a result, the authority has received concerns about residents “not being offered suitable meals, not being provided with personal hygiene services such as bathing and grooming, and instances where residents incurred bedsores that became infected.”

She also found the regime of inspections and enforcement is inadequate and noted the authority has issued licences to some operators “despite identified red flags that these operators did not meet the authority’s own licensing criteria,” and some operate without adequate sprinkler systems.

This year, the province moved more than 4,000 former hospital patients into retirement homes and paid for their lodging in order to free up hospital capacity, but the auditor found those patients do not fall under the oversight of the regulatory authority, nor is their care subject to Ministry of Health inspections.

Supportive Services for People with Developmental Disabilities

Lysyk also called on the government to improve "timeliness and oversight" of services for adults with developmental disabilities.

"There is an average wait time of more than eight months to have needs assessed," Lysyk said, adding that the Ministry of Children, Community and Social Services isn't measuring the effectiveness of services provided by agencies, or client outcomes. The auditor general also found that some agencies overstated how many people they served.

Lysyk's report also said the wait list for the Passport program has also increased by 32 per cent to 19,500 people between 2015-16 and 2019-20. She said the Ministry of Children, Community and Social Services funds clients $8.4 million "in excess of their assessed needs," leaving others with "greater needs" waiting longer for more funding.

"We found that, despite this pressing demand on resources, some Passport clients as well as their caregivers were reimbursed for professional sports and concert tickets," she said in a news release. "This was happening while others waited for funding to purchase critical supports such as employment skills training and caregiver respite."

The Passport program provides funding to adults with a developmental disability for community classes, hiring a support worker, respite for caregivers or developing skills.

Virtual Care—Use of Communication Technologies for Patient Care

The auditor general found the government has been both too slow and too rushed in implementing virtual health care in Ontario.

Until the pandemic, virtual care was limited to the Telemedicine Network – the only Ministry-funded provider of video-visit technology — and Telehealth Ontario, a phone line that offers Ontarians free medical advice, provided by a third party. The two operate in silos and uptake of the Telemedicine Network was low, the auditor found.

As a result, private health-care providers stepped in to fill the virtual care gap, charging patients and working outside of the purview of the ministry and creating concerns about inequality in access to health care.

But during the pandemic, the province introduced temporary virtual care billing codes and allowing physicians to bill for virtual care provided through non-Telemedicine Network platforms or by phone, which greatly expanded the uptake but left some privacy and security concerns unaddressed, according to the AG.

The audit also identified numerous cases where physicians had unreasonably high virtual-care billings, such as a doctor who billed $1.7 million for virtual care in 2019–20, reporting seeing as many as 321 patients virtually in one day, while billing another $1.9 million for in-person services.

Lysysk found the government has no review process specifically for virtual-care billings.

AG Annual Report 2020: Everything from the AGCO to virtual health care

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