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Ministry of Finance

Background

Taxes are the province’s largest source of revenue. The Ontario Ministry of Finance (Ministry),
through its Collections Branch (Branch), is responsible for collecting a significant portion
of the unpaid taxes owed to the province. The Branch’s head office is in Oshawa, with regional
and district offices in Toronto, London and Ottawa. The Branch’s collections process involves initially sending notices by mail, contacting the taxpayer by phone, and sometimes visiting in person. If these actions fail to recover amounts owing, collectors
have other means at their disposal, such as garnishments or registering liens and warrants for seizure and sale of the taxpayer’s property. Accounts are prioritized on the basis of risk,
using criteria such as the amount owing, number of times or length of time in collections, whether there is a history of broken promises, and if any legal action has already been taken. Once their priority has been set, the accounts are assigned according to collectors’ seniority and experience.

As of March 31, 2012, approximately 90% of the taxes owing that the Branch was responsible for collecting related to Corporations Tax and Retail Sales Tax. The Canada Revenue Agency (CRA), which is responsible for collecting personal income tax on behalf of the province, also began administering Corporations Tax on behalf of the province in January 2009. Similarly, in July 2010 the Harmonized Sales Tax, also administered by the CRA, replaced the provincial Retail Sales Tax. As a result, approximately 75% of the Branch’s staff of almost 400 were transferred to the CRA effective March 2012. However, the Ministry remains responsible for collecting Corporations Tax and Retail Sales Tax amounts owing prior to the transfer of the administration of
these taxes to the CRA. The Ministry expects that by 2014 it will have wound down most of its work on collecting these amounts.

In the 2011 Ontario Budget, the government proposed centralizing the collection of all government non-tax revenue within the Ministry of Finance. Under this proposal, the Ministry’s Collections Branch would continue to collect taxes that it administers, but would also become responsible
for collecting non-tax revenue on behalf of other provincial ministries. At the time of our audit, the Ministry of Agriculture, Food and Rural Affairs was the first ministry scheduled to transfer non-tax receivables—in this case, overpayments to crop producers totalling approximately $29 million—to the Ministry of Finance in fall 2012.Tax Collection 2

As of March 31, 2012, the total amount of the taxes owing that the Branch was responsible for recovering was $2.46 billion. 

From the Auditor General of Ontario
Auditor General

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