Police Services Act must be amended to ensure police are accountable & transparent

Update:

After a January 2015 shooting involving police, officers attempted to access and copy security footage ahead of civilian investigators, according to a letter from the SIU to Toronto’s police chief. photo by fightyourtickets.ca

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Under the Police Services Act, Ontario police forces are under no legal obligation to respond to letters the SIU sends that include concerns about police actions.

In a dozen investigations, the SIU says police appear to have violated their legal duty to co-operate with the provincial watchdog, including allegations police failed to immediately notify the SIU of a serious civilian injury or interfered with a scene after the watchdog took over an investigation. photo by fightyourtickets.ca

Allegations of police behaviour that “threatened to undermine the integrity” of investigations.

A delay that denied the public “the benefit of a thorough investigation into serious allegations of police misconduct.”

Repeated complaints of officers waiting weeks, months, or in one case, nearly four years before reporting serious injuries suffered by members of the public during police interactions.

More than 150 recent letters sent from the director of Ontario’s Special Investigations Unit (SIU) to the Toronto police chief, obtained by the Star through a Freedom of Information request, reveal new cases of what the watchdog considers problematic officer conduct uncovered during probes of police-involved deaths, serious injuries or allegations of sexual assault.

Toronto police say they investigate every concern raised by the SIU and take remedial action wherever necessary.

In a dozen investigations, the SIU says police appear to have violated their legal duty to co-operate with the provincial watchdog, including allegations police failed to immediately notify the SIU of a serious civilian injury or interfered with a scene after the watchdog took over an investigation.

In one case, SIU director Tony Loparco said it was “extremely lucky no one was shot” when an unnamed Toronto officer attempted to arrest a mentally ill person while carrying a C8 carbine rifle, and the person “reached for the trigger on a crowded street,” Loparco wrote in a December 2015 letter to Chief Mark Saunders.

In another case, SIU acting director Joseph Martino said officers risked jeopardizing public confidence in an investigation into a January 2015 police-involved shooting when they attempted to access and copy security footage before civilian investigators — an issue identical to the one that would arise again six months later in the high-profile fatal shooting of Andrew Loku.

The SIU director writes a letter to the chief at the completion of every SIU investigation involving Toronto police. In the majority of the letters obtained by the Star, written from September 2013 to May 2016, no issues are raised about officer conduct.

But in probes where the SIU identifies police behaviour it finds concerning, or about which the watchdog wants more information, the SIU director often requests that the chief look into the matter and report back.

“I would ask that your service take a close look at the questionable conduct of these officers and to write to this office with the results of your inquiries,” Martino wrote in his Aug. 31, 2015, letter to Saunders regarding the attempt to download surveillance video.

Toronto police have “made it clear” they do not respond in writing, an SIU spokesperson said — because the SIU has no authority under the Police Services Act to ask chiefs to investigate officer conduct. photo by fightyourtickets.ca

But police chiefs are not legally obligated to respond to these letters — Toronto police have “made it clear” they do not respond in writing, an SIU spokesperson said — because the SIU has no authority under the Police Services Act to ask chiefs to investigate officer conduct.

Toronto police says its professional standards unit investigates “each and every comment” in SIU letters and reports back to the police board.

“Discipline and training are applied where appropriate,” said Mark Pugash, a spokesperson for the Toronto police.

Critics say the watchdog nonetheless repeatedly raises the same complaints — and regulations intended to safeguard the watchdog’s independence are “continually and regularly ignored by police services with impunity,” said André Marin, a former Ontario ombudsman and past SIU director.

“The problem here is that there is no consequence attached to police thumbing their nose at the SIU and the law,” Marin said.

Marin and other critics say the SIU itself should have more power to ensure police comply with laws intended to protect the integrity of SIU probes. And now may be the time for change, thanks to the rewriting of Ontario’s Police Services Act and the ongoing review of the SIU and other police oversight bodies, led by judge Michael Tulloch.

Marin said he wants to see Tulloch make recommendations aimed at giving the watchdog greater powers to hold police accountable when it has reason to believe officers breached their legal obligations.

Specifically, he hopes the review recommends attaching a penalty, under legislation, for failing to comply with regulations governing the SIU, such as a fine or jail term. “You would see immediate compliance,” he said.

Ian Scott, who as director of the SIU from 2008-2013 made frequent requests of police chiefs to report back on officer behaviour, said the SIU director should have the ability to complain to Ontario’s Civilian Police Commission, something the director isn’t allowed to do under existing legislation.

In an interview, Scott said the benefit of complaining to the commission is that it can launch a misconduct case outside of the usual police tribunal, a system many feel isn’t accountable because chiefs pick the adjudicator and prosecutor.

Bullets were found laying on the street (as indicated by the yellow markers placed on street). Tensions over the SIU letters arose again in 2013 when then-SIU director Ian Scott publicly criticized former Toronto police chief Bill Blair for refusing to respond to more than 100 letters containing complaints about officers. photo by fightyourtickets.ca

Tulloch’s much-anticipated report is due at the end of the month. In an email to the Star, a spokesperson for the review said Tulloch is looking at clarifying the SIU’s mandate and “the extent of the police duty to co-operate.”

An SIU spokesperson, Monica Hudon, told the Star Toronto police have “made it clear it will not respond in writing to concerns raised in the SIU director’s reporting letters.” But she said the service has reached out to the SIU in “other forums” to address issues raised.

“Often, this will involve telephone conversations and an exchange of views between senior officials of our respective agencies,” she said, adding that Toronto police have committed to taking remedial action in some cases.

Pugash said in some instances where the SIU has complained about a delay in notification, police needed more medical information before determining if the SIU threshold had been met; the SIU only takes over an investigation if injuries are deemed “serious.”

“In some cases, we disagree with Mr. Loparco’s contentions,” Pugash said. “The fact remains, however, that every issue is investigated, action is taken wherever appropriate, and everything is reported to the police services board.”

Toronto police board vice-chair Chin Lee said the board receives all letters from the SIU director to the chief, alongside the results of the mandatory internal police probes, which must occur within 30 days of the closure of every SIU investigation involving the service. The intention of the internal probes is to determine if policy or training changes are necessary or if disciplinary action should be taken.

“The board reviews these letters and may direct the chief, as necessary, to deal with any issues raised. The board also seeks the relevant information to fulfil its oversight responsibilities when it deems it necessary,” Lee said.

Until recently, the chief’s internal reports were not made public. But as of June 2016, the board began releasing versions of the reports, though some information, such as the names of officers involved, is not public.

Since that time, 17 internal reports have been released in the board’s monthly agendas, dating to cases closed in August 2015 and as recent as July 2016.

However, no internal reports have been released for cases closed between September and December 2015, a period during which the SIU raised concerns about officer conduct in four investigations.

That includes the cases where Martino flagged the issue of officers attempting to download surveillance footage after the January 2015 shooting, and the incident involving a C8 carbine rifle.

The board did not respond by deadline to questions about the four-month gap in internal reports released so far.

One internal report released by the board, however, does show Toronto police professional standards unit investigated an SIU director’s allegations that there was a notification delay and that police wrongly attempted to obtain a statement from an injured man during an SIU probe.

After looking into the complaints, professional standards said the notification delay was caused by a holdup in getting medical information, and that police had obtained permission from the lead SIU investigator to speak with the injured man.

The issue concerning the downloading of surveillance video following a police-involved incident appears to be a sticking point between the SIU and Toronto police.

Last spring, when Ontario’s attorney general released a censored version of the SIU director’s report into the fatal Toronto police shooting of Andrew Loku, it was revealed that Loparco had raised concerns about an officer attempting to review and download surveillance video.

Loparco said the officer’s conduct violated the Ontario regulation stating the SIU is the lead investigative agency.

A civilian watchdog (the “SIU”) can’t expect to get very far if the police won’t co-operate with the SIU. When there is lack of co-operation, the Police Services Act can’t presently impose sanctions on the police and police chiefs. photo by fightyourtickets.ca

Toronto police say the officer was performing their duty to secure the scene. Speaking to the Star last year, Pugash said police disagreed with Loparco.

“In this case, it was, ‘Did the video exist? Was it recording?’ In which case they would need to download it to preserve evidence.”

Pugash also said “several” SIU officials at the scene had no objections.

In his communication with Saunders about a similar incident six months earlier — where officers allegedly attempted to “access and copy” security footage from a police-involved shooting at a pharmacy — acting SIU director Martino said there was no impact on the investigation because the footage didn’t capture the incident and SIU investigators were able to intervene to “prevent the officer from copying the footage.”

Asked if Toronto police responded in writing, as Martino requested, Hudon said she could confirm that concerns raised in Martino’s letter “have been the subject of dialogue” between the SIU and police.

The Star also asked why the SIU does not issue news releases in all investigations, particularly in cases where there is a high public interest. No news release was issued, for instance, in the case involving the C8 rifle incident.

Hudon said the SIU receives notification of hundreds of incidents every year. Given the SIU’s limited resources, it is not feasible for the watchdog to issue a news releases in all of them, she said.

“We have noted this issue in our submissions as part of the review being undertaken by Justice Tulloch. Given our present resources, the SIU is committed to issuing news releases in all death cases, whenever a firearm is used and for major vehicle collisions,” Hudon said.

Wendy Gillis can be reached at wgillis@thestar.ca .

Letters from SIU director to Toronto police chief

“Tragic outcome” narrowly avoided

In a December 2015 letter to Chief Mark Saunders, SIU director Tony Loparco highlights what he calls the “quite troubling” conduct of an officer who helped a colleague arrest a mentally ill person while carrying a C8 rifle — a military grade weapon used for long-range shooting.

The mentally ill person quickly grabbed the gun, refused to let go and “reached for the trigger on a crowded street,” Loparco wrote. “Several” officers were required to remove gun from the person’s grip.

“The incident could have led to a much more tragic outcome in the circumstances,” Loparco wrote.

Four-year delay

In a June 23, 2015 letter, Loparco wrote to Saunders about a serious wrist injury incurred by a member of the public that did not come to the attention of the SIU until almost four years later. Loparco said the passing of time had created an “evidentiary vacuum” and therefore there were no reasonable grounds to proceed with charges against the two officers.

“The failure of the (police) to contact the SIU has effectively denied . . . the broader public the benefit of a thorough investigation into serious allegations of police misconduct,” Loparco wrote.

Investigation ‘compromised’

In an August 25, 2014, letter, Loparco wrote to then-chief Bill Blair about a two-month delay in notifying the SIU about an incident where a Toronto police officer was found to have broke someone’s nose.

Though Loparco found the use of force by the officer was legally justified, he lamented the delay in notification despite “various officers” being aware of the broken nose — a clear serious injury — within hours of the incident.

“A delay of this nature can only degrade the quality of a witness’ recollection of the events in question, and clearly compromised the integrity of the SIU’s investigation,” Loparco wrote.

‘Climate of hostility’

The question of whether police chiefs must directly respond to concerns raised by the SIU director is not a new issue in Ontario.

After former SIU director Ian Scott began requesting responses to concerns raised in his letters to chiefs when he took the reins of the agency in 2008, the Ontario Association of Chiefs of Police’s SIU Committee “strongly urged” chiefs not to respond to director’s letters, saying the SIU had no authority in matters of police conduct.

As tension increased between the SIU and police chiefs, former chief justice Patrick LeSage was tapped by the attorney general in 2011 to review the Police Services Act with an eye to resolving certain issues involving the SIU, and concluded the legislation was clear that chiefs are not obligated to respond.

“The SIU director’s authority does not extend to requiring the chief of police to investigate or report to him and should not be part of the SIU director’s communication with the chief of police,” LeSage wrote.

Instead, issues raised by the SIU are intended to be dealt with in the mandatory internal investigations a police service must conduct after every completed SIU investigation, to determine if training or policy changes need to be made or if disciplinary measures are warranted. The results of that probe must be presented to the board within 30 days of the completion of the SIU investigation.

Tensions over the SIU letters arose again in 2013 when then-SIU director Ian Scott publicly criticized former Toronto police chief Bill Blair for refusing to respond to more than 100 letters containing complaints about officers.

LeSage’s report, Scott said at the time, did not preclude police chiefs from being responsive to concerns that affect police, the SIU and the public. Marin agreed, saying LeSage’s report should not prevent the SIU from identifying issues of concern in its correspondence with chiefs of police.

“While (the SIU director) is unlikely to receive a response given the current climate of hostility, he should not be prevented from politely requesting one,” Marin, then Ontario ombudsman, wrote in Oversight Undermined, a 2011 report on the SIU.

 

 

Ottawa police to get braille badge covers — a first in Canada, CNIB says

Update: see related – Nov. 4/10 Toronto police officers are facing disciplinary action for removing the name badges from their uniforms

Toronto police meet in front of the Rogers Centre before the opening ceremony for the Pan Am Games in July. Security for the games was budgeted at $64 million.
Will Toronto Police follow this example by Ottawa Police? photo by fightyourtickets.ca

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The force says starting next week braille laminates — placed on top of the officer’s wallet badge ID — will indicate the rank of the officer and the main police phone number

Ottawa police say that officers who deal with the public will be better able to identify themselves to people who are blind or partially sighted, in what’s being called a first in Canada.

The force says starting next week braille laminates — placed on top of the officer’s wallet badge ID — will indicate the rank of the officer and the main police phone number.

Sgt. Adam Coakley led the initiative and calls it “a great opportunity to enhance service to residents.”

Image result for Photos of Braille on elevator buttons
Braille is used in elevators (on the elevator buttons) and one public telephones. Now braille will be placed on police badges, along with the name and rank of the police officer.

Coakley says more than 8,000 Ottawa residents are blind or partially sighted, and the braille sleeve will make it easier for them to confirm that they are speaking with a police officer.

The Canadian National Institute for the Blind says the initiative is unique in Canada.

Diane Bergeron of the CNIB says the blind or partially sighted will no longer be worried that they may be talking with someone posing as an officer.

“We commend the Ottawa Police Service for taking this initiative,” Bergeron said Wednesday in a release.

 

TTC Delivers Faulty Arguments to the Superior Court to Justify Random Drug/Alcohol Testing

Update: April 12, 2017 Court Denies Injunction and forces issue back to arbitration where the Union’s challenge to the TTC’s policy has been in arbitration since March 8, 2011 before Arbitrator Maureen K. Saltman.”

The Suprhttp://fightyourtickets.ca/wp-admin/admin.php?page=bruteprotect-configeme Court of Canada. On June 14, 2013, the Supreme Court ruled that random drug/alcohol testing in the workplace wasn’t justified in the workplace, even in dangerous workplaces. See: Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., [2013] 2 SCR 458, 2013 SCC 34. photo by fightyourtickets.ca
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The TTC’s workforce has a substance abuse problem that could put passengers and the public at serious risk if it’s not immediately addressed, according to a court document filed by the transit agency.

But a representative of the union that represents TTC workers calls the allegations of substance abuse “absolutely false.”

In a factum the TTC submitted ahead of a hearing this week on its proposed random drug and alcohol testing policy, the agency said that between October 2010 and December 2016 there were 291 documented incidents in which employees’ behaviour raised safety concerns. In almost half of those the TTC either suspected or confirmed that drug or alcohol use was a factor.

A transit agency investigator concluded there was a “culture of drug and alcohol use at the TTC” and reported 45 additional incidents of employees using or trafficking alcohol or drugs while at work, including marijuana, cocaine, heroin and prescription drugs such as OxyContin.

The agency said that the results of 11,000 drug and alcohol tests of its employees since 2010 “indicate that drug and alcohol use continues to be a significant problem for the TTC, a threat to its safe operation and to the safety of the public… Each day without random testing increases the risk of irreparable harm to employees, passengers, and the public.”

TTC Head Office. The Supreme Court has already ruled that random drug/alcohol testing, even in inherently dangerous work environments, isn’t  justified. Chances are good, that the TTC’s attempt to graduate from their current policy “fit for duty program” to a random drug/alcohol testing policy, will fail and the Union will receive the injunction that they are seeking. photo by fightyourtickets.ca

The TTC submitted the 130-page document in response to a notice filed by the transit agency’s union, Amalgamated Transit Union Local 113. The union, which represents over 10,000 transit workers, is seeking an injunction against the random drug testing policy that is slated to go into effect on March 1. A two-day hearing on the issue begins Tuesday at the Ontario Superior Court of Justice.

In an interview, Kevin Morton, the secretary-treasurer of Local 113, refuted the TTC’s depiction of endemic drug and alcohol use among its employees

“We have the same issues as any organization — be it the police, fire, newspapers — with regards to the normal distribution of people with alcohol or drug problems,” he said.

Morton said the union doesn’t oppose the TTC’s current substance abuse policies, which allow employees to be tested if there is “reasonable cause” to believe they were impaired during a significant work-related incident. Employees who are returning to work after violating the policy or undergoing addiction treatment are also subject to testing.

The new policy, which the TTC board first approved in 2011, would allow management to test employees at random, using a breathalyzer to detect alcohol or an oral swab for drug use. Workers in “safety-sensitive” positions including vehicle operators, maintenance workers and supervisors would be eligible for testing, as would some management and executives.

The union argues the policy would violate employees’ Charter right to be protected from unreasonable search and seizure. “We believe in incident-based testing. I shouldn’t have to prove that I am innocent of anything,” Morton said. “I should be able to go to work on the assumption that I’m honest and dependable and clean.”

According to the TTC’s factum, between October 2010 and December 2016 there were 70 instances in which employees either tested positive for drug or alcohol use or refused to be tested following at-work incidents or when management believed there was reasonable cause to suspect impairment.

There were a further 46 incidents in which employees refused to be tested when they returned to work after violating the drug and alcohol policy or undergoing addiction treatment.

Rather than respecting the arbitration process where this issue (a new random drug/alcohol testing policy) was being arbitrated, the TTC decided to bypass it and implement this new policy on March 1/17. This left the TTC Union with no choice but to seek an injunction in the Superior Court. photo by fightyourtickets.ca

The factum also states that at least 15 transit operators “that the TTC is aware of” were charged by police with impaired driving while at the wheel of a private vehicle.

Although prospective employees are told that drug and alcohol testing is part of the job application process, 187 applicants to safety-sensitive positions returned positive drug tests.

Agency spokesperson Brad Ross said that despite the statistics, transit riders shouldn’t be afraid to ride the TTC.

“The TTC is safe, of course,” he said in an email. But the new drug policy would ensure it was “even safer.”

“If (the TTC) is aware of incidents of impairment in the workplace, it has a duty to act to protect its employees and the public, which it has done here.”

In messages to the public, the transit agency normally stresses how safe it is, and it’s unusual for it to claim in a public document that it has a potentially hazardous substance abuse problem among employees.

But it may have had little choice. A 2013 Supreme Court decision prohibited random testing unless employers could prove there was an existing drug or alcohol problem in the workplace.

This week’s legal showdown comes at a time when the leadership of the TTC union has been thrown into disarray by an affiliation dispute that saw the executive board pass a no-confidence vote against Local 113 president Bob Kinnear last week.

Morton, the local’s secretary-treasurer, said the schism hadn’t affected the union’s ability to fight the policy.

The random drug testing issue has been tied up in labour arbitration for years. Citing the slow movement of that process, the TTC decided last March to implement the policy without waiting for the arbitration outcome.

What’s in your chicken sandwich? DNA test shows Subway sandwiches could contain just 50% chicken

Update: see previous post – February 29, 2016 Subway: A Footlong Sub, Will Now Mean A Footlong Sub

Subway's over roasted chicken sandwich patty contained about 50 per cent chicken DNA, according to Marketplace's tests.

Subway’s over roasted chicken sandwich patty contained about 50 per cent chicken DNA, according to Marketplace’s tests. (CBC)

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Marketplace had chicken from 5 major fast food restaurants tested

If you’re one of many Canadians who opt for chicken sandwiches at your favourite fast food restaurant, you may find the results of a CBC Marketplace investigation into what’s in the meat a little hard to swallow.

A DNA analysis of the poultry in several popular grilled chicken sandwiches and wraps found at least one fast food restaurant isn’t serving up nearly as much of the key ingredient as people may think.

In the case of two popular Subway sandwiches, the chicken was found to contain only about half chicken DNA.

Will Mahood, a loyal customer who considered Subway chicken sandwiches a lunchtime staple, was alarmed by the findings. To Mahood, messages from fast food companies can make it sound like “you’re taking it straight from a farm and it’s just a fresh piece of meat.”

DNA researcher Matt Harnden at Trent University’s Wildlife Forensic DNA Laboratory tested the poultry in six popular chicken sandwiches.

An unadulterated piece of chicken from the store should come in at 100 per cent chicken DNA. Seasoning, marinating or processing meat would bring that number down, so fast food samples seasoned for taste wouldn’t be expected to hit that 100 per cent target.

The Peterborough, Ont.-based team tested the meat in:

  • McDonald’s Country Chicken – Grilled
  • Wendy’s Grilled Chicken Sandwich
  • A&W Chicken Grill Deluxe
  • Tim Hortons Chipotle Chicken Grilled Wrap
  • Subway Oven Roasted Chicken Sandwich
  • Subway Sweet Onion Chicken Teriyaki (chicken strips) NOTE: The tests were on the meat samples alone, without sauces or condiments.

In the first round of tests, the lab tested two samples of five of the meat products, and one sample of the Subway strips. From each of those samples, the researchers isolated three smaller samples and tested each of those.

They were all DNA tested and the score was then averaged for each sandwich. Most of the scores were “very close” to 100 per cent chicken DNA, Harnden says.

  • A&W Chicken Grill Deluxe averaged 89.4 per cent chicken DNA
  • McDonald’s Country Chicken – Grilled averaged 84.9 per cent chicken DNA
  • Tim Hortons Chipotle Chicken Grilled Wrap averaged 86.5 per cent chicken DNA
  • Wendy’s Grilled Chicken Sandwich averaged 88.5 per cent chicken DNA

Subway’s results were such an outlier that the team decided to test them again, biopsying five new oven roasted chicken pieces, and five new orders of chicken strips.

Those results were averaged: the oven roasted chicken scored 53.6 per cent chicken DNA, and the chicken strips were found to have just 42.8 per cent chicken DNA. The majority of the remaining DNA? Soy.

“That’s misrepresentation,” Irena Valenta, a Toronto resident who participated in a Marketplace taste test, said after seeing the test results.

Subway said in a statement that it disagrees with the test results.

“Our recipe calls for one per cent or less of soy protein in our chicken products.”

“We will look into this again with our supplier to ensure that the chicken is meeting the high standard we set for all of our menu items and ingredients.”

What else is in there?

On the whole, Marketplace‘s testing revealed that once the ingredients are factored in, the fast food chicken had about a quarter less protein than you would get in its home-cooked equivalent. And overall, the sodium levels were between seven and 10 times what they would be in a piece of unadulterated chicken

tim hortons wrap

Grilled chicken products are often marketed as the healthy alternative, but consumers may not always know what they are biting into. (CBC)

Ben Bohrer, a food scientist at the University of Guelph,  doesn’t know exactly how the chicken products Marketplace tested are made, but he’s very familiar with what the fast food industry calls “restructured products”.

Restructured products are essentially smaller pieces of meat or ground meat,  bound together with other ingredients  to make them last longer, taste better and, as Bohrer puts it, “add value” — restaurant speak for cheaper.

The sandwiches tested contain a combined total of about 50 ingredients in the chicken alone, each with an average of 16 ingredients. The ingredients run the gamut from things you would find in your home such as honey and onion powder to industrial ingredients — all of which, Bohrer insists, are safe and government approved for human consumption.

McDonald’s, A&W and Wendy’s wouldn’t break down exactly what ingredients are used in what proportions, citing proprietary information. Tim Hortons had no comment and directed Marketplace to their website.

Healthy alternative?

Nutritionist and registered dietitian Christy Brissette notes that most products in that alphabet soup ingredient list are simply variants on salt or sugar, the latter of which can elevate the carbohydrate level of a chicken breast to well above where it should be: zero per cent.

Before they saw the test results, both Valenta and Mahood said they chose chicken because they thought they were making a healthier choice — “the chicken is supposed to be the healthier type of meat,” as Valenta put it.

But Brissette says it’s important for consumers to not allow themselves to buy into the “halo” of health around such products.

“People think they’re doing themselves a favour and making themselves a healthy choice,” she says. “But from a sodium perspective you might as well eat a big portion of poutine.”

marketplace chicken test

Marketplace also did a taste test, comparing six popular grilled chicken sandwiches against a home-cooked piece of pure chicken breast. (CBC)

Based on an investigation by Kathleen Coughlin, Eric Szeto and Charlsie Agro

 

Update: March 1, 2017 – Subway defends its chicken after CBC Marketplace report

Royal Canadian Mint struggles to make money: documents

Update:

The Royal Canadian Mint is struggling to make a profit, as revenues fall and once-reliable business lines falter, a CBC News investigation has found.
The Royal Canadian Mint is struggling to make a profit, as revenues fall and once-reliable business lines falter, a CBC News investigation has found. (Royal Canadian Mint)

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Internal documents reveal financial troubles and weak sales at Royal Canadian Mint

The Royal Canadian Mint. photo by fightyourtickets.ca.

The Royal Canadian Mint just isn’t making the money it used to.

Revenue is down sharply, jobs have been chopped, morale is in the tank, and formerly successful lines of business are being shut down — even as the mint spends millions of dollars on new executive offices.

Once a cash cow, the mint — which actually lost money in 2015 — is struggling financially.

Latest figures for the third-quarter of 2016 show that revenues were down by $208 million, or about 27 per cent, and profits were down by $6.5 million, or 61 per cent.

The north end of the Canadian Mint, photo by fightyourtickets.ca
2014 $20 fine silver Superma coin
The mint has been marketing collectible coins, such as this Superman coin from 2014, but recently decided to end some offerings in its so-called Face Value series because of poor sales and high returns. (The Royal Canadian Mint/The Canadian Press)
photo by fightyourtickets.ca

The weak financials mean the mint’s 1,200 employees likely won’t get their general annual bonus, which is based on meeting corporate profit targets. In April 2016, each worker took home an average of $8,204 in bonuses.

President Sandra Hanington told employees in November that a bonus for this year was “unlikely” given the troubled balance sheet.

A 24K Gold Bar, cast at the Royal Canadian Mint. Visitors are encouraged to lift the bar, if they are able. The bar weighs approximately 28 pounds. photo by fightyourtickets.ca.

A silver collectible coin series — so-called face value coins, including last year’s silver $20 Star Trek coins — was ended on Jan. 1 this year because of poor sales.

“At Oct. 1, 2016, the market price of silver was significantly less than the face value of these coins,” the mint said in a release Friday, explaining its weak third-quarter sales. “Effective Jan. 1, 2017, the mint is no longer selling face value coins.”

The Royal Canadian Mint. photo by fightyourtickets.ca

Full refunds

Droves of customers have been returning these coins for full refunds, forcing the mint to revise the way it reports such revenues to better account for the high returns. Those complex accounting revisions are part of the reason the mint was almost three months late in reporting its third-quarter results, which were due Nov. 30.

CBC News obtained dozens of internal Royal Canadian Mint documents under the Access to Information Act, which reveal an institution — literally in the business of making money — that’s losing its lustre.

Hard times began under the Conservative government, which told the mint in 2012 to stop producing pennies; in 2014, to sell its digital currency start-up MintChip to the private sector; and in 2015, to stop taking a profit on production of Canadian circulation coins for the federal Finance Department.

The mint’s troubles date back to 2012, when the Conservative government directed it to stop producing pennies. Two years later, it was told to sell its digital currency start-up MintChip and in 2015 to stop taking a profit on production of Canadian circulation coins for the federal Finance Department. The Royal Canadian Mint. photo by fightyourtickets.ca.

 

The timing was bad. The mint had just spent $62 million beefing up its Winnipeg plant — an amount the mint’s board later decided was not likely to be recouped through increased sales. It recorded a $65.5-million writedown of the Winnipeg assets, leaving the mint with a loss of $500,000 in 2015.

‘Change can be difficult for employees.’– Christine Aquino, Mint spokesperson

This is the front entrance for visitors who enter the Mint for guided tours. photo by fightyourtickets.ca

The previous loss was recorded in 2003. Since becoming a Crown corporation in 1969, the mint has lost money in only six years.

The mint was also stung by a 2014 report from the auditor general of Canada, which found hospitality and travel expenses were poorly managed. And a CBC Fifth Estate story in June 2015 reported on a pricey trip to a luxury Mexican resort by 11 mint employees, prompting the Conservative government to crack the whip.

In a July 2015 order, the Conservative government directed the mint to tighten its travel and hospitality rules to match those of the government. Among other things, the order led directly to the cancellation of company-sponsored Christmas parties beginning in 2015.

An April 2016 employee survey, commissioned from consultants Aon Hewitt, found a large drop in morale in Ottawa and Winnipeg, placing the mint at the bottom of a national scale comparing Canadian corporations.

“One of the most vocalized topics was the cancellation of the annual Christmas party,” says the Aon Hewitt report. “This was perceived with significant impact to employees who had faced a difficult year.”

Job losses may also be part of the morale problem: the mint chopped at least 60 positions in 2015, the first year of Hanington’s five-year presidency.

$6.5 million for executive suites

In the meantime, the mint is spending about $6.5 million on renovations to two suites of executive offices at its Ottawa headquarters on Sussex Drive. Officials justify the spending as a money-saver over the long run.

All is not bleak: the sale of MintChip in December 2015 brought in $5 million, with another $11 million due in 2022. And the new Liberal government in December reversed the Conservative government’s profit prohibition on minting Canadian circulation coins, allowing the mint to start making a profit again on manufacturing nickels, dimes, quarters, loonies and toonies this year.

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Christine Aquino, director of communications for the mint, says recent changes to the business strategy mean the organization is poised to improve profits. (Jeff Semple/CBC)

Despite the problems, the mint’s sales of gold bullion are strong, as are sales of circulation coins to foreign governments, according to spokesperson Christine Aquino.

“[The] Canadian circulation program continues to be delivered below budget,” she said.

“Currently, all three plating lines [at the mint’s Winnipeg plant] are fully operational, and 70 new full-time positions have been added in Winnipeg as a result of increased foreign sales.”

Aquino says major revisions in the mint’s business strategy are setting up the organization for improved profits in future.

“Change can be difficult for employees, and we know it can take some time to adjust to a shift in approach,” she said.

“The mint is full of talented people, and we will continue to succeed — in fact, we are already encouraged by the results that our new customer-driven strategy has produced and look forward to improved profitability and achievements.”

photo by fightyourtickets.ca
photo by fightyourtickets.ca