Tire recycling agency in Canada to be closed

Due to numerous loopholes in the system and its vulnerability to fraudulent activities by insiders, tire recycling agency in Ontario will be closed. Throughout the last years, Canadian newspaper “the Star” exposed frauds within the agency like suspicious money transferring and wasteful spending by its executives.

Canada’s minister of the environment and climate change Glen Murray said the Ontario Tire Stewardship which is the least complicated and the smallest among three recycling programs supervised by government will be eliminated under the new legislation designed to enhance the level of recycling in the province.

Murray said investigations by the Star proved “insufficiency of the transparency, the accountability and the protection of public interest.”

Stories by the Star showed that the Stewardship used public funds to for luxury trips, fine wine and donations to the Liberals of Ontario. These stories also exposed allegations of frauds by executives and doubtful bank transfers emphasized by the federal intelligence organization which investigates terrorism and money laundering.

All doubtful transactions mentioned above come from “eco-fees” which are paid by Ontario’s drivers to recycle used tires. Annually, tire dealers collect some $70 million for the Stewardship. In a letter sent to the Stewardship on the 17th of February Murray mentioned a deadline of the 31st of October given to Andrew Horseman to submit a plan to close down Ontario’s waste oversight authority. Murray asserts that the plan requires cessation of operation by the 31st of December, 2018.

The stewardship must be clear and transparent with the public. At the same time, winding down Stewardship’s operations must not adversely affect Ontario’s tire recycling program. Yet another issue is how to disburse the Stewardship’s surplus. Last year it reached $49.5 million and Tire Recycling Association eventually questioned whether these funds should go to the program which is to be closed. Now authorities think it over, how to manage assets in a fair, open and transparent way. With regard to this matter, there has been an ongoing discussion between representatives of the Stewardship and the Ministry.

The Waste-Free Ontario Act that came into force last November stipulates dissolution of three government recycling programs for tires, hazardous waste and electronics. Of that three, the Stewardship is the only one which has been given a deadline to seize its operations. New law stipulates forcing retailers and manufacturers to take individual responsibility for their products by establishing innovative programs for recycling. Befor new legislation came into effect, a series of problems was addressed by Star and mostly they regarded to spending controls at the tire stewardship.

Murray says that for sure industry wants to put these stories behind it and have a clean start.

Also, the Star revealed invoices and credit card statements which showed that tire steweardship’s executives used consumers’ “eco-fees” for expensive trips and dinners, as well as donations to political parties. Among these documents, there is one invoice saying that the stewardship spent $3200 to send some of the executives to the Liberal’s 2015 Summer Golf Classic.

However, last year chair of stewardship Glenn Maidment asserted that it was absolutely just to pay that fee to see Kathleen Wynne on the golf course. Maidment named additional donations to political parties “modest contributions as a way of supporting democratic process.” Also, the story of the stewardship inclues filing a lawsuit against its former CFO Perminder Candola who transferred $346,565 from a tire collector to his personal account, renamed “Ontario Tire”.

Soon enough after the lawsuit, a former accountant of the stewardship contacted the agency offering to return additional money and requesting anonymity.

In the aftermath, a third-party accounting firm was hired to examine spending and it produced a report, where it claimed that stewardship didn’t give time and access to investigate fraud allegations.

The report described a multi-million-dollar tire recycling program as full of problems that even “invited manipulation” with large amounts of money.

The most recent investigation by the Star elaborated on a report by the federal intelligence agency scrutinizing money laundering cases. According to the Star, it disclosed millions of dollars in suspicious bank transfers from the stewardship to an auto recycling firm.

The report by the federal Financial Transactions and Report Analysis Center said bank records showed that there were 74 direct deposits added up to $2.6 million which were sent to a small eastern Ontario auto recycling company. The stewardship said before that it had no record of that amount.

Currently, the agency is under a forensic audit and its finding will be reported to the new waste authority. For more information on the matter, Moira Welsh can be reached at mwelsh@thestar.ca

Article source: Press Reader

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