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Ontario Disability Support Program (ODSP) Legal Guide
(20 June 2021)
Chapter 14 - Fraud and Prosecutions
- Background and Comment
- Fraud
(a) Overview
(b) Elements of Criminal Fraud
. Overview
. Case Law
(c) "Provincial" Fraud and Aiding & Abetting
(d) Fraud Investigation Process
(e) Analysis and Case Commentary
. Overview
. D'Amour
. Related Cases
(f) Avoiding Fraud Charges
- Eligibility Review Officer (ERO) Investigations
(a) Overview
(b) Entry and Demand
. Clarification
. Entry
. Demands
(c) Warrant Searches
(d) "General" Investigative and Demand Authority
(e) Conflict Between "Entry and Demand" and "General Investigative and
Demand Authority"?
(f) Misuse of Consent to Disclose and Verify Information
(g) Government Information-Sharing Authorities
(h) Legal Privilege
(i) Provincial "Obstruction" Offence
- Fraud Control Units
- Charter
(a) Overview
(b) Evidence Exclusion [s.24(2)]
(c) Right to Liberty [s.7]
(d) Unreasonable Search and Seizure (Privacy) [s.8]
(e) A Case in Point: R v D'Amour
. The Facts
. Search and Seizure [s.8]
. Right to Liberty [s.7]
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NOTE:
Conviction for a social assistance offence (either criminal or provincial) NO LONGER carries with it the additional penalty of a lifetime welfare and ODSP ban(those provisions were revoked 01 January 2004).
1. Background and Comment
Historically, social assistance recipients are subject to criminal punishment out of proportion to the amounts of money involved. Single mothers who defraud to get $5,000 can expect jail time comparable to white collar fraud or embezzlement going into the millions of dollars. Despite the reality that ODSP income support rates leave our disabled co-citizens in poverty (the single person maximum income support is $979 per month) - fraud (dollar for dollar) in the name of feeding children is held to be relatively more blameworthy than fraud in the name of excessive wealth accumulation. Greed is rated as a higher social value than need.
The practical vulnerability of ODSP recipients to fraud charges is further magnified by the fact that they are subject to an unparalleled level of scrutiny into their personal and financial affairs at both the eligibility stage (see Ch.6 "Eligibility Information"), and through further investigative levels (see s.3 "Eligibility Review Officer Investigations" and s.4 "Fraud Control Units", below).
This harsh treatment of ODSP recipients was taken to an extreme on 01 April 2000 when a lifetime ban against receipt of any form of provincial social assistance was established for any welfare or ODSP-related conviction committed from that date forward. The ban was the subject of much public debate and an inquest around the death of Kimberly Rogers in Sudbury - and was opposed by public health boards, municipalities, and some police forces. The ban was bad enough when applied to welfare (Ontario Works) recipients but when applied to ODSP recipients (ie. the "proven" medically disabled) it was plainly cruel and inhumane.
Thankfully, the ban was lifted by the new Liberal government in early 2004.
That said, the issue of fraud and ODSP offences still looms large for claimants. The interface of social assistance law with criminal law is therefore crucial. Unfortunately, the limited experience of most criminal practitioners with the field, the poverty of the accused, and the perceived legal complexity of the social assistance regime - all combine to dampen legal progress in the area.
Further, the Canadian Charter of Rights and Freedoms - so effective otherwise at protecting the procedural rights of criminal defendants, has proven toothless to protect ODSP recipients - with the evidentiary fruit of all the overly-intrusive information and evidence-gathering tactics available to ODSP authorities (again, see Ch.6 "Eligibility Information") to be fed directly into fraud prosecutions (see s.5 "Charter Issues", below) without substantial constitutional impediment.
Practically all information exchanges between a claimant and the ODSP Director are recorded in writing and are available as a source of evidence for criminal or other prosecution, and practically all personal financial and other documentation is available for the same purpose without any serious retention of the legal privacy rights otherwise enjoyed by citizens at large.
2. Fraud
(a) Overview
While middle-class taxpayers happily conceal income as though it were a national sport and small retailers double-book their way to PST and GST tax fraud with only the rare risk of audit or investigation (and the even rarer risk of provincial or federal non-criminal prosecution) ODSP recipients face ongoing and constant investigation to a degree unparalleled by any identifiable class of people except welfare (Ontario Works) recipients and (in recent years) sex offenders.
Some have hoped that the advent of the Canadian Charter of Rights and Freedoms, with its constitutional protections of privacy, against self-incrimination and against unreasonable search and seizure would have changed this situation. However these hopes have proven unfounded. The reality that the poor are effectively compelled by the financial reality of their poverty to disclose intimate financial and personal details of their lives has not softened the hearts of the judiciary. Nor has it dissuaded the pens of legislators - who have so greatly facilitated the ability of investigators to intrude into the private affairs of recipients that there is no substantial remaining area of personal information unshielded from their prying eyes (nor from its use in fraud prosecutions).
As will be seen below, a further insidious aspect of this already significant degradation of privacy and self-incrimination rights is the role of the "eligibility review officer" (ERO) whereby the pretext of "eligibility" assessment is in reality used to facilitate search and seizure for criminal fraud investigative purposes - thus circumventing Charter protections. These duplicitous powers are further bolstered by free-standing "obstruction" offences located in the Ontario Works Act, effectively criminalizing non-compliance with ERO demands and investigations by recipients and third parties alike.
This legal 'whip-sawing' of applicant/recipients is further compounded when administrtor suspicions arise and an 'updating' meeting is scheduled. If applicant/recipients does not then fully abase and expose (ie. incriminate) themselves at that session (which may be tape-recorded) in such a session then the invariable "administrative" response is to cancel income support for "failure to provide information". Courts have consistently refused to acknowledge any degree of state coercion in such practices, hiding behind the shallow pretext that this is not compelled state action as the defendant has 'voluntarily' come to ODSP seeking income support - and that they were 'free' not to do so. Once having chosen to avail themselves of these "optional" services, sadly the applicant/recipient has thereby exposed themselves to the full range of criminal sanctions without normal protections afforded to those of us who break and enter, commit murder and otherwise engage in activities more apparently deserving of constitutional protection.
Of course, this is not to say that all ODSP claimants are saints and do not commit fraud - but it is to point out that the mastery of the duties of a ODSP applicant/recipient is not a simple matter. As Mr Justice Archie Campbell J said while reviewing a ruling of the (then) Social Assistance Review Board respecting the General Regulation under the (then) General Welfare Assistance (GWA) Act, Kerr v Metro Toronto 4 OR (3d) 430 (Div Ct): .... the greatest sympathy for the board in its attempt to interpret a Kafkaesque regulation so complex and ambiguous that it becomes a lawyer's nightmare, ... While the legislation was re-written in 1997, the same complexity and obscurity remains. Contrary to what many would say, I do not (for the most part) view this as a function of poor drafting but rather an unavoidable result of the intricate and exhaustive degree of examination to which claimants are subjected. For current examples of ambiguities and complexities that still exercise the analytic faculties of lawyers and judges, see the discussions of "Loans as Income" in Ch.7 "Income Rules", or the murky legal definition and status of the "independent minor" in Ch.2 "Claimants".
This complexity existing in the law, it is not surprising that it is often only as a result of the more detailed questioning by a worker during an "investigation" that a claimant learns of mistakes in their reporting duties, or some arcane intricacy of ODSP law that they have run afoul of.
As well, ODSP applicants/recipients - as a class - tend to be more prone to mental illness, learning disabilities, unfamiliarity with the English language, speaking and hearing disorders, etc - all of which impact their ability to comprehend and assess the meaning and requirements of this complex legal regime. And yet we continue the legal facade [CCC s.19] that for a learning disability, sexually-abused, drug-addicted, single mother of three that: 'ignorance of the law is not an excuse' for committing an offence (although on this point see the Maldonado case reviewed below).
While this is our collective shame, it is also a legal reality that makes it extremely important for applicants, recipients and their advisors to be aware of their rights on the constant eligibility information (and evidence) struggle between themselves and ODSP Directors. The excessive demands and practices of Directors in this regard are the subject of Ch.6 "Information Eligibility".
More essentially - if there is any issue of false statements or material non-reporting having been made in past - either intentionally or inadvertently -claimants should seek to consult a criminal lawyer (of course - in a final irony - no legal aid coverage is available for such situations until AFTER a charge is laid).
(b) Elements of Criminal Fraud
. Overview
The classic statement of the broad nature of criminal fraud under s.380 [then s.338] of the Criminal Code is contained in R v Olan, Hudson and Hartnett [1978] 2 SCR 1175, where Dickson CJ, analyzing the Criminal Code terms "deceit, falsehood or other fraudulent means" and "defrauds", stated: Courts, for good reason, have been loath to attempt anything in the nature of an exhaustive definition of "defraud" but one may safely say, upon the authorities, that two elements are essential, "dishonesty" and "deprivation". To succeed, the Crown must establish dishonest deprivation.
....
The element of deprivation is satisfied on proof of detriment, prejudice, or risk of prejudice to the economic interests of the victim. It is not essential that there be actual economic loss as the outcome of the fraud. As can be seen this definition of criminal fraud is quite broad and encompasses not just overt intentional misrepresentation, but any behaviour which can be characterized broadly as "dishonest" - EVEN in the absence of economic loss (ie. trying but failing to obtain income support dishonestly can ground a fraud conviction). Further, it is to be remembered that criminal convictions can be founded on both "acts" and "omissions", so that simple silence in the face of a duty to disclose can also ground a conviction.
. Case Law
In R v Maldonado [1998] OJ #3209 (QL) OCJPD, a criminal court considered a charge of criminal fraud against a person who received both welfare and student loans at the same time (the case is further discussed on issues of student loans in Ch.7: "Income Rules: Student and Education-Related Income"). The court dismissed the charge, finding that an element of the fraud offence, that of knowing that the government would be deprived of money, was missing - as the defendant did not know that the money was chargeable income, the non-reporting of which would give him further income support. The court took great care to distinguish this from an 'ignorance of the law' defence, which is barred under the criminal code. The Maldonado case is essential reading for any criminal lawyer facing such a situation.
In contrast to Maldonado, in R v Bond [1994] OJ #2185 (QL) (OCJGD) the court was faced with a fraud charge where a recipient had accumulated, but not reported assets in excess of the maximums (although she had reported the monies as income when they were received). The court convicted, holding that any motives of selflessness and frugality were relevant to sentencing (she claimed the savings were for her children), not to the element of deceit required for the conviction. Finding that her non-reporting was - on an objective basis - deceitful, the court convicted.
In R v Lalonde 22 OR (3d) 275 (OCJGD, 1995) a realistic court applied a "battered wife syndrome" defence, likening it to a defence of necessity (and despite the absence of expert evidence on the issue) to a woman FBA recipient charged with fraud for lying about having a spouse in the house. Further, the court believed that the Director knew of the situation but did nothing about it thinking that the woman would have been eligible for GWA in any event, so that there was no "deprivation". The court characterized this as 'condoning' the situation.
(c) "Provincial" Fraud and Aiding & Abetting
There are also "provincial" ODSP fraud offences 'on the books' [Act s.59], although these are rarely if ever used - the Criminal Code fraud charges [CCC s.380] being preferred as they are broader in scope, penalty and stigma: s.59(1) ODSP Act
No person shall knowingly obtain or receive money or goods or services to which he or she is not entitled under this Act and the regulations. The elements of the provincial fraud offence are largely the same, though not identical to that in the Criminal Code. The criminal requirement of "dishonesty" is largely replicated in the provincial offence by the requirement that the person "knowingly obtain or receive money or goods or services to which he or she is not entitled". Note however that the "obtain or receive" requirement in the provincial offence apparently only allows conviction where there has been actual "deprivation" (ie. loss by the Director), which contrasts with the criminal fraud offence.
The provincial statute also has its own "aiding and abetting" offence [cp. to CCC s.21]: s.79(2)
No person shall knowingly aid or abet another person to obtain or receive money or goods or services to which the other person is not entitled under this Act and the regulations. Procedures for these charges are governed by the Provincial Offences Act.
The maximum penalty on conviction of either provincial offence is $5,000 fine and/or jail of up to six months [Act s.59(4)].
(d) Fraud Investigation Process
"Fraud control units" may be established by the ODSP Director at the provincial level [Act s.45(1)], and they have plenary jurisdiction to investigate any type of social assistance fraud (including Ontario Works). Fraud investigators are formally considered to be engaging in law enforcement activities, which provides their activities and documents almost full immunity from review by recipients or their counsel under the provincial or municipal Freedom of Information (FOI) laws [Act s.45(3)].
However, an interested review of the steps leading to a fraud referral to the police (at least in Toronto) is contained in the D'Amour CA case: In March 1997, Mr. Woo, a caseworker with the Department, met with the appellant and asked her to provide him with her T4 slips for the years 1994, 1995 and 1996. He made this request because the Department had received documents suggesting that the appellant, contrary to her representations, had been employed while receiving benefits. Under s. 10 of the Act, the Department could withhold benefit cheques if the appellant did not produce the T4 slips. Mr. Woo told the appellant that benefit cheques would be withheld until she provided the requested T4 slips. She subsequently gave the T4 slips to Mr. Woo and received her benefit cheques. The T4 slips confirmed that the appellant had received some $28,000 in undisclosed income.
Mr. Woo referred the appellant's file to Ms. Woods, an eligibility review worker. It was her job to determine eligibility for benefits under the Act and whether any overpayments had been made. Ms. Woods contacted the appellant's employer and confirmed her employment. She prepared a summary reflecting the income earned by the appellant and the consequent benefit overpayments made to the appellant.
Ms. Woods referred the appellant's file to the Fraud Control Unit within the Department. That unit gathers additional information to determine whether overpayments have been made and, if so, what action should be taken to recover those overpayments. The Fraud Control Unit refers files to the Special Review Committee (SRC). The SRC consists of a Crown Attorney, a police officer, a civil lawyer from the City of Toronto's Legal Department and a welfare supervisor. The SRC decides whether there should be recourse to criminal charges, civil proceedings, or a simple recovery of the overpayments. About ten percent of the files reviewed by the Fraud Control Unit that reveal overpayments are referred to the SRC.
The ultimate determination of whether a matter should be referred to the police for fraud prosecution is made by the SRC. Caseworkers and eligibility review workers are not concerned with whether conduct is fraudulent in the criminal sense and do not interact with the police. They determine eligibility and whether overpayments have been made. These workers appreciate, however, that any time an overpayment is discovered there is always the possibility that the file will eventually be referred to the police for criminal prosecution. (e) Analysis and Case Commentary
. Overview
This last sentence above is a bit obvious. It was the first level case worker that received in inculpatory T4 slips - which directly impeached the earlier representations respecting income by the recipient. Are we to believe that the worker's mind was numb to the possibility of fraud?
It is also obvious that fraud was in mind of the ERO officer who next got the file and who referred the case up to Fraud Control. A review of ERO legislative and regulation authority will show that their powers consist of powers of entry and removal of evidence from premises, demand for inspection, demands for information - supplemented by search warrant request authority for residential dwellings. These sure sound like law enforcement powers to me. Further, "obstruction" of an ERO investigation is a provincial offence. While they may be called "eligibility" review officers, within their field they have more investigative powers than police officers.
The last sentence above-quoted is also revealing of an approach to Charter analysis, as was discussed above, that is rigidly and formalistically tied to the eligibility/fraud distinction. This approach is ignores the reality of ODSP workers' constant vigilance to fraud, in favour of focussing on the formal step of referring the matter to the fraud unit or the police. No realistic understanding of the workings of ODSP administration accepts that criminal jeopardy - or an administrative consciousness of it's possibility - only arises at this later stage. The constitutional and criminal significance of this characterization is that Charter protections only tend to arise when there is "criminal jeopardy" - so the later in the formal process that fraud concerns are located - the later do constitutional criminal evidentiary protections such as s.7 right to silence and s.8 privacy rights engage.
. D'Amour
But reading on in D'Amour shows that these protestations don't really matter anyway, because apparently criminal prosecution is but an ancillary aspect of the proper administration of the social assistance regime in any event: I accept the respondent's submission that the use of the T4 slips in the criminal prosecution for the fraudulent receipt of benefits did not amount to the use of the document for a purpose different from the enforcement of the Act. The prosecution for fraud, just like a prosecution under the Act, was aimed at preserving the integrity of a benefits program that depended largely on accurate self-reporting of income. Self-reporting can only work if the state can identify and successfully prosecute those who do not honour their obligation to report fully and accurately. Thus - in D'Amour - criminal prosecution is NOT a qualitatively distinct legal procedure from social assistance administration (contrary to that age-old distinction between the civil and the criminal law). Apparently the criminal justice system is actually a supporting agency of the Ministry of Community and Social Services - aiding in the tidy adminstration of Ontario's social assistance program. (One wonders if prosecutions for murder and manslaughter are similarly ancillary to the mandate of the provincial Ministry of Health to care for the well-being of its citizens.)
Not only has the court in D'Amour mistaken the early (indeed ubiquitous)presence of the fraud concern in the social assistance administrative process, it has gone further to re-categorize criminal fraud itself as an aspect of that same administrative process. In this fashion the engagement of constitutional procedural protections are even further delayed - perhaps forever.
The net impact of the D'Amour case is to declare "open season" on social assistance recipients in terms of fraud investigation. Administrators, ALREADY heedless of the actual legal range of their information and evidence demand authorities (see Ch.6) are now bolstered in their practices by the essentially unfettered ability to use the fruits of these intrusions towards the goal of applying one of the few higher categories of degradation of human rights above poverty possible, that of complete deprivation of liberty (ie. incarceration).
The entire tone and thrust of the D'Amour case is indicative to me of the mainstream societal ignorance of the realities of the life of a social assistance - who are none but the poor and disabled in our society. I have in past been saddened to see this ignorance reflected in the general bar, but now to see it perpetuated - with such a discriminatory focus - by the province's highest court is simply tragic and disheartening.
. Related Cases
Such issues have been considered in another regulatory context, namely income tax. In R v Ostrowski (Ont Sup Ct, 2008) evidence obtained during an income tax audit was held admissible in subsequent criminal proceedings, Charter s.8 search & seizure and s.7 right to silence protections not applying. Following the Supreme Court of Canada in R v Jarvis (SCC, 2002) the court noted the distinction between an audit function and an investigative function, with the latter having a predominantly penal purpose and being in an adversarial legal context. Further, the court noted from Jarvis that mere suspicion of criminality developed during an audit process did not invoke the Charter.
The court in Ostrowski cited the following test from Jarvis as to when 'the Rubicon was crossed' and a regulatory process converted to a criminal investigation [from Jarvis at para 94]: a) "Did the authorities have reasonable grounds to lay charges? Does it appear from the record that a decision to proceed with a criminal investigation could have been made?
b) Was the general conduct of the authorities such that it was consistent with the pursuit of a criminal investigation?
c) Had the auditor transferred his or her files and materials to the investigator?
d) Was the conduct of the auditor such that he or she was effectively acting as an agent for the investigators?
e) Does it appear that the investigators intended to use the auditor as their agent in the collection of evidence?
f) Is the evidence sought relevant to taxpayer liability generally? Or, as is the case with evidence as to the taxpayer's mens rea, is the evidence relevant only to the taxpayer's penal liability?
g) Are there any other circumstances or factors that can lead the trial judges to the conclusion that the compliance audit had in reality become a criminal investigation?" This test is designed for the income tax context, but its larger principles can inform the similar social assistance situation. When doing so however care must be taken to acknowledge the unique nature of the ERO in both legal authority and actual practice. For example, Crowns and fraud committees rely heavily - almost exclusively - on EROs for their evidence. This plainly invokes item (d) above, which alone should be decisive of the issue in favour of Charter protection.
(f) Avoiding Fraud Charges
For an extensive discussion of the legal reporting duties faced by applicant/recipients see Ch.6 "Eligibility Information". As was discussed there, in my analysis the eligibility information and "verification" demands placed on applicants and recipients far exceed their duties, and as well the actual legal entitlements of Directors to such eligibility information - and especially evidence.
That said, in the real world of being 'on ODSP' there is a clear tension between the legal entitlements of Directors to eligibility information, the applicant/recipient's "rights of privacy" and the risk of administrative disentitlement and fraud prosecution. Not all applicant/recipients may want to assert their strict privacy rights at the cost of constant battle with their local ODSP Director. For those applicant/recipients the safest approach is what can be characterized as chronic "over-compliance".
Basically: report everything - IN WRITING - and let the Director decide its treatment. Report all income and assets as soon as they are expected and AGAIN when received. Let the ODSP Director determine how they are going to treat the money (ie. as chargeable in whole, part or not at all) before it is spent. This rule extends by analogy beyond financial disclosure to all areas of information disclosure: possible spousal relationships, income and assets of all members of the benefit unit (including children), employment-seeking efforts, etc.
Report first, fight later on appeal if necessary. DO NOT presume to know the correct legal result of an issue and therefore refrain from disclosing it to ODSP. If the claimant disagrees with a determination then that should be appealed (see Ch.12 "Appeals and Other Remedies") to the Social Benefits Tribunal.
These practices will go a long way to protecting claimants from fraud allegations, and if done consistently then ODSP fraud charges would drop dramatically.
3. Eligibility Review Officer (ERO) Investigations
(a) Overview
Some initial flavour of the role of Eligibility Review Officers (EROs) in the ODSP process is given in the quote above from the D'Amour case and the discussion of them at Ch.6 "Information Eligibility: Eligibility Review Officers".
However I have left the primary discussion of EROs to this "Fraud and Prosecutions" chapter because - in my view - and despite the facade perpetuated in the legislation - and now sadly by the courts (see the discussion of R v D'Amour, above) - their primary role is NOT to 'review eligibility' as such but to act as the investigative arm of the ODSP fraud department, for which "eligibility review" is but a preliminary stage.
EROs are authorized by law to conduct investigations into "past or present eligibility" under the welfare and ODSP Acts and their predecessors [Act s.46(2)]. Besides a general authority to that end to "inquire into all financial transactions, records and other matters that are relevant to the investigation" - they also have special legal powers to enter non-dwelling premises and issue demands for materials therein [Reg s.54(1)], and authority to apply for and act under search warrants [Act s.46(2)].
(b) Entry and Demand
. Clarification
The main provision establishing these powers [Reg s.54(1)] is ambiguous about whether these entry and demand powers are separate free-standing powers (on the one hand) or whether the demand powers can ONLY be exercised during an "entry". Thankfully, this surprising ambiguity is clarified (but only incidentally) by Reg s.54(3) which reads: s.54(3)
An officer shall exercise the powers mentioned in subsection (1) only during business hours for the place that the officer has entered. This sub-section makes it plain that the demand powers are meant to be exercised only during an "entry". Further, all provisions from Reg s.54(1) through (8) relate to this entry/demand authority.
. Entry
EROs may, in business hours, enter any non-dwelling place (ie. homes) that they believe on reasonable grounds contains evidence relevant to determining a person's eligibility in relation to OWA, ODSP or other provincial social welfare programs [Reg s.54(1)(3)].
However - where a place is being used as a dwelling (ie. residence) no entry may take place except with the consent of the occupier or with a search warrant, and even then only during business hours [Reg s.54(2)].
. Demands
Investigators may inquire into, and demand production for inspection of "all financial transactions, records and other matters relevant to the investigation" [Reg s.54(1)(c)]. Such demands must be written and itemized by nature of material required [Reg s.54(4)]. The person having custody of the documents is required by law to provide them to the ERO [Reg s.54(4)].
The ERO may - on providing a written receipt for the thing - remove things produced as result of the entry and demand for review or copying OR to take them to a Justice of the Peace (JP) or Judge who will make an order for the "detention of things seized" [POA s.159; CCC s.490] [Reg s.54(6)]. Where the things are not so taken to a JP or judge they shall be returned to the person who produced them [Reg s.54(7)]. Certified copies of things (ie. documents) so obtained are admissible in evidence in that same manner as originals [Reg s.54(8)].
Anyone subject of a "demand" must, on request for the ERO, "provide whatever help is reasonably necessary including using any data storage, processing or retrieval device or system to produce a record in readable form" (ie. to help print out a record contained in a computer) [Reg s.54(12)]
(c) Warrant Searches
EROs have authority to apply for and act under search warrants for the purposes of their investigation [Act s.46(2); Reg s.54(13)].
It is beyond the scope of this program to further explore the law of search warrants.
(d) "General" Investigative and Demand Authority
The following "authorities" appear to be general investigative powers not tied to the exercise of the 'entry and demand' authorities discussed immediately above.
EROs have additional authority during an "investigation" to "call upon an expert for whatever assistance he or she considers necessary ..." [Reg s.54(9)], and to "use a data storage, processing or retrieval device or system in order to produce a record in readable form". Further - as with demands made during an "entry" - anyone subject of a "demand" must, on request of the ERO, assist in using such storage devices or systems as necessary to "produce a record in readable form" (ie. to help print out a record contained in a computer) [Reg s.54(12)].
On the face of the Regulation (but see this issue immediately below) - EROs have the additional (and huge) "demand" authority as follows: s.54(11)
An officer may require information or material from a person who is the subject of an investigation under this section or from any person who the officer has reason to believe can provide information or material relevant to the investigation. (e) Conflict Between "Entry and Demand" and "General Investigative and Demand Authority"?
There is a statutory interpretation problem between the "demand" authorities that are coincident with an "entry" [s.3(b) above] (call them "entry demands") and the search warrant powers - on the one hand, and the seemingly free-standing, independent "demand" authority contained in s.54(11) quoted above (call them "general demands") - on the other hand.
The "entry demand" authority requires writing, can only be done DURING an "entry", and covers "financial transactions, records and other matters". The details of search warrant powers are unspecified but will be governed at the discretion of the judge or JP based on the conventional law of search warrants, which is too extensive to discuss here.
The "general demand" authority - seemingly - has no requirement of writing, may be done anytime to anyone anywhere (including in dwelling places) - and covers both "information or material" from both the subject of the investigation and from anyone else.
The problem is that the "general demand" authorities are much less restrictive than the "entry demand" and search warrant powers (requiring judicial authorization as they do). Further, the use of the "general demand" authority seems to circumvent the standard search and seizure protections otherwise required (eg. warrants for dwelling place searches). By standard principles of statutory interpretation the more specific restrictive (and protective) provisions would tend to apply over the more general - but if this is the case what meaning is to be ascribed to the broad s.54(11) powers, for it is also a principle of statutory interpretation that all statutory provisions have meaning?
This is a problem created by ambiguous drafting and may have to eventually be resolved by a court. However until that is done I suggest that s.54(11) can be given a meaning consistent with the narrower "entry demand" and search warrant powers IF its primary meaning is to specify 'the parties' who may be subject of "entry demands" and search warrants (ie. both the subject of the investigation and anyone else "who the officer has reason to believe can provide information or material relevant to the investigation").
To read these provisions collectively in any other fashion effectively creates an unlimited (ie. applicable to dwelling places as well) AND VERBAL - search and seizure authority where applicant/recipients are dragooned into being witnesses against themselves. The effect of this interpretation is quite contrary to standard investigative and search and seizure doctrine, and renders most of the highly-articulated "entry demand" provisions redundant.
(f) Misuse of Consent to Disclose and Verify Information
Although not only available for use by EROs, the Consent to Disclose and Verify Information (see Ch.6: "Information Eligibility: The Legal Problem: Consents to Disclose and Verify Information") is a primary tool in any form of social assistance investigation.
As noted in Ch.6, use of these Consents is fraught with a great deal of abuse (in which Directors are only too complacent participants). On their face these forms only purport to justify the providing of "information" by third parties to the Director. As a practical matter however what are provided almost invariably involves the production of copies of original documents or business records which - under the rubric of satisfying the "information" request, end up providing the Director with documentary evidence without the need to resort to the stronger more specific warrant powers described above. It is this documentary evidence which then finds itself entered into court against the recipient as a "business record" (a form of evidentiary hearsay exception) should fraud charges follow. Essentially the "form" in which the third party elects to provide the information - in most cases out of their convenience - effectively abrogates the protection of the judicial oversight provided by warrant provisions that would otherwise have to be used.
This practice reveals the disregard shown for the privacy rights of recipients by both the Director and the third party information holders (who should re-examine such practices in light of the fiduciary confidentiality duties they owe to their clients). This is but one further aspect of the tenuous situation that social assistance recipients find themselves in with respect to the criminal procedural protections advanced to other citizens by the Charter (see s.5 below).
(g) Government Information-Sharing Authorities
The ability of ODSP authorities to obtain, use and disclose information and evidence about the lives of recipients does not - by any means - end with the techniques discussed above and in Ch.6 "Information Eligibility".
Broad authority is provided for the direct sharing of information between welfare and ODSP entities. Authorities can simply go on-line to the province-wide social assistance computer system to check a recipient's welfare (Ontario Works) information [Act s.54]. In October 2023 this direct-sharing was extended to the "Minister of Labour, Immigration, Training and Skills Development" [Act 53.1].
As well, the making of "inter-governmental" agreements allowing the collection, use and sharing of "information" between the Minister of Community and Social Services, both the Ontario Works delivery agents and related and ODSP Directors, and other governments [Act s.53], including:- the federal government and its ministries, departments and agencies,
- the provincial governments and their ministries, departments and agencies,
- the federal and state governments of the United States and their departments and agencies,
- any Freedom of Information and Protection of Privacy Act (FIPPA) or Municipal Freedom of Information and Protection of Privacy Act (MFIPPA) "institution" (ie. the wide range of government bodies subject to those Acts).
Two such agreements are linked here:
Ontario-Canada Memorandum on Information-Sharing, 2004
Statement of Mutual Understanding on Information-Sharing [Canada-US]
In short, one is hard-pressed to locate ANY remaining areas in which a recipient enjoys privacy protection against these many and powerful government agencies.
(h) Legal Privilege
Generally, any materials containing solicitor-client privileged information(roughly: any communications by anyone the primary purpose of which is the obtaining or giving of legal advice) are subject of special protections during any demand or search warrant procedures.
Section 160 of the Provincial Offences Act [and s.488.1 Criminal Code] governs the procedure to be followed when claims of such privilege have to be made during warrant searches - and these should be reviewed in detail if any such problem arises. It is likely that a court would endorse similar procedures - or grant similar rights - to solicitors subject of ERO "demands" as discussed above. The single time in my practice that I have been served with such a demand I wrote back claiming privilege over my entire file and never heard anything back of the matter after that.
It may be that the absence of established procedures for claiming solicitor-client privilege in the situation of "demands" is a testament to the unusual nature of such authority in administrative law procedures.
(i) Provincial "Obstruction" Offence
Uncertainties created by the already ambiguous investigative authority of Eligibility Review Officers (discussed above) are compounded by the existence of a provincial "obstruction" offence, putting the applicant/recipient at further risk if they try to assert anything like a self-incrimination defence once they are under investigation: s.59(3)
No person shall obstruct or knowingly give false information to a person engaged in investigations for the purposes of section 45 or 46. Procedures for these charges are governed by the Provincial Offences Act. The maximum penalty on conviction of this provincial offence is $5,000 fine and/or jail of up to six months [Act s.59(4)].
Thankfully (and as noted earlier) conviction for any social assistance offence either criminal or provincial) no longer carries with it the additional penalty of a lifetime welfare and ODSP ban (those provisions were revoked 01 January 2004).
4. Fraud Control Units
As noted above in the discussion of the D'Amour case [s.2(d) "Fraud Investigation Process"], the next step up in the fraud chain is typically the "Fraud Control Unit" [Act s.45(1)]. Larger centers like Toronto have a dedicated Fraud Control Unit while smaller offices may centralize them with a multi-district office.
Fraud Control Units have the legal right to "investigate eligibility of present and past applicants and recipients, including possible violations of" the welfare, ODSP and predecessor programs [Act s.45(2)].
"Fraud Control Units" - as agents of the Director - have the effective and broad "authority" to collect, use and disclose information regarding a recipient/applicant under the terms of the Freedom of Information and Protection of Privacy Act (FIPPA) and the sister "Municipal" FIPPA [MFIPPA s.28(2),31,32] - and to receive and share information and personal information as outlined in s.3(g) above.
There is an irony in the existence of the "Fraud Control Unit" as a distinct investigative stage between the ERO level and the Crown or "Special Review Committee" level. EROs have FAR greater investigative powers than the Fraud Control Unit (entry, demands, warrant request authority, etc: see "Eligibility Review Officers", above). For that matter, in their field EROs have far greater non-warrant investigative powers even than police officers. Anyone who hopes that this thin administrative sub-division is going to prevent the fruits of "eligibility" investigations from finding their way into the fraud file - or who thinks there is no pressure on or temptation by an ERO to engage in a certain amount of helpful 'extra' eligibility investigation - is deceiving themselves.
5. Charter
(a) Overview
The topic of the interaction between social assistance applicant/recipients and the Canadian Charter of Rights and Freedoms is a broad one. This section only discusses the Charter as it bears on the situation of the prosecuted applicant/recipient - and even then only briefly. Readers are cautioned that I am NOT an experienced criminal lawyer and any situations of actual prosecution should immediately seek counsel from such a practitioner.
That said, I have been unable to this point to hold back my scorn [see s.2(d) "Fraud Investigation Process", above] for the treatment of prosecuted social assistance applicant/recipients at the hands of the Charter. The main issue in all such situations is of course the use of information and evidence - given for the purpose (or under the pretext) of establishing eligibility - as evidence in prosecutions.
The primary Charter provision at play on this issue is s.24(2), the evidence exclusion remedial provision. There are several routes (ie. several different types of violation of Charter rights) that may be hoped to take a defendant to s.24(2) of the Charter. These include:- s.7 Right to Liberty
- s.8 Unreasonable Search and Seizure
Related-"sounding" provisions against being compelled to be a witness in one's own trial [Charter s.11(c)] and self-incrimination [Charter s.13] are only triggered once legal proceedings are already afoot, and as such are not within the scope of this discussion.
(b) Evidence Exclusion [s.24(2)]
s.24(2)
Where, in proceedings under subsection (1), a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circumstances, the admission of it in the proceedings would bring the administration of justice into disrepute. To get to the possibility of activating s.24(2) one must get past several hurdles. First the situation must be located within a "right or freedom" located in the Charter [see the discussions on s.7 and s.8 Charter below]. Next it must get past s.1 of the Charter, where the Crown has the burden to prove that the right is infringed in a manner that is a "reasonable limit prescribed by law". This is known as the "proportionality test" and (roughly) consists of consideration of whether the challenged law is "overbroad" or - alternatively - is it narrowly tailored for its purpose, and thus more acceptable.
The last threshold test for the activation of s.24(2) of course is whether the admission of the evidence would "bring the administration of justice into disrepute". This is a wonderfully nebulous criteria that puts one in mind of public surveys and interviews with 'people on the street'. In reality it is an unconscionability standard and is applied so by the courts with varying degrees of consistency.
An important aspect of the s.24(2) "disrepute" issue that needs to be recognized is that it tends to focus on 'self-created' evidence, the classic form of which is a confession. Pre-existing documents - on the other hand - tend to fall for consideration under the s.8 search and seizure protections [although where pre-existing evidence is LOCATED with the help of accused then it may be excluded: R v Mellenthin (SCC, 1992)]. In fact, the whole area of Charter exclusion evidence tends to afford less protection to physical-form evidence such as documents and objects, as opposed to verbal statements, where defendants are said to "be conscripted against themselves".
(c) Right to Liberty [s.7]
Charter s.7
Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice. The courts have read s.7 to include a right of silence - which really means concern over whether confessions are truly "voluntary" (ie. or are they compelled by threat or induced by promise of benefit) [R v Hebert (SCC, 1990)]. This concern pre-dates the Charter with English common law persistently inquiring whether any confessions are generated by promises or threats.
The 1981 case of R v Rothman extended this concern into one focussing on both the traditional "voluntariness" and the "new" concern over whether the admission into evidence of the confession would "bring the administration of justice into disrepute" [this doctrine is now embodied in s.24(2), above].
The s.7 "right to silence" tensions are activated in the typical ODSP situation when information and evidence (typically documents) - gathered ostensibly for "eligibility" purposes - are seamlessly transferred up the chain for use in fraud and prosecution purposes. Note that "compulsion" of confessions in the ODSP context can occur in several forms: the application process with its (unauthorized) sworn forms, mandatory Consents to Disclose and Verify Information, general day-to-day worker inquiries made under constant threat of disentitlement, ERO entry demands and searches, and Fraud Control Unit investigations.
Within these, the "practical" compulsions and/or enticements at work here are:- without ODSP income support the applicant/recipient and their family is, BY DEFINITION, financially destitute - is this not a form of effective compulsion pushing them to disclose?
Conventional Canadian constitutional doctrine would say that this may be 'compulsion', but it is not "state" - compulsion. Thus conveniently ignoring that it is the state and the laws of the land that protect private property and perpetuate an economic system that allows some to hold property in vast excess of what they need while others are arrested for "squatting" in their unused vacant, derelict buildings.
- (if ODSP participation isn't "compelled") surely (under the above conventional logic) it must be an "inducement"?
Would a confession be acceptable if it was obtained on a police promise to pay the defendant $500 a month - surely not? When an ODSP defendant fears loss of their on-going eligibility unless they 'co-operate' with investigators (ie. actively self-incriminate) - how can the "inducement" be any less? How can such a confession be "reliable" under conventional legal doctrine of "voluntariness"?
It is worth noted that a pre-Charter case [Walker v R (SCC, 1939) held that statutory compulsion into confession or admission does not render the statement inadmissible for lack of voluntariness. This principle has apparently survived the Charter: Fitzpatrick v The Queen 102 CCC (3d) 144 (SCC).
(d) Unreasonable Search and Seizure (Privacy) [s.8]
Charter s.8
Everyone has the right to be secure against unreasonable search or seizure. Section 8 of the Canadian Charter of Rights and Freedoms stands to protect us against from unreasonable search and seizure by the government. A key first principle relied upon the courts in informing the meaning of s.8 is that of "reasonable expectation of privacy". Only circumstances in which this expectation exists will be subject to s.8 protection.
Of course the "expectation of privacy" criteria for assessing search and seizure limits is fundamentally conceptually flawed as it provides back-door incentives for governments to - by reducing the REASONABLENESS of the "expectation" of privacy - reduce to range of the protection. For instance, a simple verbal warning or note on the side of a form [eg. that administrators are legally entitled to disclose any and all personal information held about a person to anyone else for 'law enforcement purposes': FIPPA s.42(g) and MFIPPA s.32(g)] effectively degrades privacy protection under the "expectation of privacy" standard. No "expectation" of privacy, no Charter right to privacy.
To state the argument in an extreme form for sake of poignancy: what "reasonable expectation of privacy" would one have in a police state? The degree to which privacy rights in fact ARE respected is the degree to which the law WILL protect it. This is a charade of circularity.
(e) A Case in Point: R v D'Amour
. The Facts
The recent case of D'Amour (discussed above) from the Ontario Court of Appeal considered the s.24(2) evidence exclusion under both s.7 and s.8 of the Charter (see above). The issue in D'Amour was whether a document (an income tax "T4") provided by a recipient to ODSP authorities in the course of an eligibility review could be admitted into evidence against her in the course of a criminal fraud prosecution. The subject document was obtained by the recipient and given to the Director.
. Search and Seizure [s.8]
Regarding s.8, the court in D'Amour considered and agreed that 'privacy' expectations varied in strength dependent on the use to which the document was put, here the distinction being between the administration of ODSP on the one hand, and criminal prosecution on the other. With breath-taking logic however the Court then concluded that in this case those two purposes coincided, effectively voiding the right of privacy for ODSP recipients: ... the use of the T4 slips in the criminal prosecution for the fraudulent receipt of benefits did not amount to the use of the document for a purpose different from the enforcement of the Act. It is worth noting at this point that this 'regulatory v criminal' distinction has been applied in other contexts to bypass conventional criminal self-incrimination protections. In Gore v College of Physicians of Ontario (Ont Div Ct, 1008), the court applied the distinction to deny the applicant the right to resist an invesdtigative summons where the goal was regulatory, despite the obvious potential for use of the investigation results in later criminal proceedings.
However, the logic used here in D'Amour essentially destroys the distinction between administrative regulatory purposes and criminal prosecution purposes, and thereby disregards any consideration of the role of state-compelled privacy intrusion in the Charter equation. It renders any and all documentation given to an Director by a recipient for eligibility purposes (and what other purpose could there be for providing it) fully admissible against them in criminal ODSP prosecutions. For all intents and purposes, the s.8 privacy rights of a ODSP recipient do not exist with respect to ODSP information and evidence disclosure. Given that disclosure requirements are so broad (and "over-broad", see Ch.6 on this issue), one is hard-pressed to locate what remaining area of privacy remains to recipients.
The court however expressed hesitation that the information or documents should be available for prosecutions in non-social assistance related matters. Again, the privacy rights of suspected burglars and murderers (as such) are accorded higher constitutional protections than those of us on social assistance.
Of similar analysis and effect to D'Amour was R v Hannah [1996] OJ #3489 (OCJGD) where the FBA worker requested that the recipient provide copies of her bank records. These were eventually submitted up the chain to an ERO and eventually to the Crown for use in evidence against her in a criminal fraud trial - never having been obtained by warrant. The defence argued that her s.8 right against unreasonable search and seizure (ie. privacy right) was infringed. The court allowed the records to be used in evidence, holding that the recipient had reduced expectation of privacy as a social assistance recipient.
. Right to Liberty [s.7]
The court in D'Amour drew a defensible distinction between 'conscripted' (created by the defendant) evidence, and the evidence before it - the T4 slips(independently-created by third parties). The slips were created - prior to the investigation - by another government authority and simply sent to the defendant, who in turn provided them to the welfare authorities.
The court expressed a distinction between the facts in D'Amour, where documents were not created as a result of state compulsion related to the prosecution - but merely handed over as a result of it, and the case in R v Ling (then the BCCA ruling) where the documents were CREATED as a result of state compulsion related to the prosecution.
The court in D'Amour walked through the four steps of the (then) leading self-incrimination test R v White as follows:
i. Degree of state coercion
The discussion here is revealing of the conventional social attitude to social assistance recipients. The court held that termination of assistance on failure to provide the demanded documents did not amount to state compulsion of the production. To advocates for the poor this statement is astounding: the looming threat of termination of benefits not having a coercive effect!
The social attitude reflected in this ruling is clearly that the person isn't 'forced' to apply for ODSP, and to that extent they have 'volunteered' their involvement with the ODSP system. This attitude finds its origin in the formalistic distinction between state action and state inaction, common to Charter analysis. The Rights provisions of the Charter are rights protecting 'against' state action. However rights 'to' positive state action such as social programs are not considered guaranteed by the Charter.
Further, implicit in this framework is that the state has NO role in the perpetuation of inequalities of wealth via its role as protector of the sanctity of private property - this rather is some bedrock aspect of nature divorced from state intervention. The unacknowedged reality is that the courts, the legislature and society at large all implictly demand and protect the right to positive state action in the form of police protection, property law enforcement (regardless of the obscenity of the wealth of the claimant). These property rights and protections are not "state action" and thus are not subject to challenge under the Charter - while the disabled ODSP recipient under threat (or actuality) of income support cancellation has no Charter rights as they have "voluntarily" come to state assistance.
ii. Nature of the Relationship When the Documents Were Produced
Here the court held that there was no criminal investigation underway at the time of the request for the T4 slip, and as such this leg of the test was not met to invoke the Charter protection.
Again here advocates despair, knowing that the normal work of all ODSP workers, particularly Eligibility Review Officers (EROs) (as where involved in D'Amour at the key time) to determine eligibility is coincident in all material respects with the substance of fraud investigation: ask questions, seek verification and proof. The burden lies constantly on the recipient to prove their assertions.
Further, the practical role of an ERO officer is almost always retrospective (ie. past investigation) rather than prospective (ie. on-going eligibility determination). On-going eligibility determination is normally dealt with by regular caseworkers who deny eligibility until satisfied with the information and evidence provided.
iii. Risk Inherent in Unreliable Confessions
The court concluded in this point, rightly in my opinion, that there was no such risk of unreliability in the T4 evidence, produced as it was prior to the investigation and by third parties with information received from other third parties (the employer).
iv. Does the Use of the Evidence Increase the Likelihood of Abusive State Conduct
In large part the court referred this issue - thus in effect converting it - to the "reasonable expectation of privacy" issue considered under s.8, discussed above. Having concluded that no reasonable expectation of privacy existed there, even from its use in criminal prosecutions, the result is a foregone conclusion.
The court however did say - with respect to the risk of abuse - that it did not consider the request for the T4 as unreasonable in either the original circumstances(eligibility review), or in the criminal prosecution, such prosecution being only an aspect of the administration of the ODSP regime.
While this statement is consistent with the court's position thoroughout it simply does not address the fourth step in the White test: is there risk of future abusive state conduct in approving the manner that this criminal evidence was obtained. Once again (this was discussed above), are we to trust - as the court apparently does - that the thought of fraud is magically absent from the minds (successively) of the front-line ODSP worker, then the ERO, then the Fraud Control Unit - until finally at the point that the Special Review Committee, which has the authority to decide to refer to the police for fraud investigation, makes it's decision to refer? This is a fairyland.
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