Canada: $5 billion swindled from public housing funds, says

Tom Boland (wgcp@earthlink.net)
Wed, 28 Oct 1998 06:34:19 -0400 

http://www.canoe.com/TopStories/oct27_publichousing.html
FWD  The Canadian Press -- Tuesday, October 27, 1998


  PUBLIC HOUSING MILKED TO THE TUNE OF $5 BILLION TAXPAYER DOLLARS: MINISTER

  By WENDY MCCANN


TORONTO (CP) -- Developers, architects and builders alike got rich
constructing homes for Ontario's poor in the late 1980s, the provincial
government said Tuesday.

In a shocking allegation, the province's housing minister said taxpayers
were swindled out of $5 billion by greedy -- or simply green -- players in
what was supposed to be a multibillion-dollar effort to give shelter to the
needy.

A decade later, Ontario is still paying off the whopping $9 billion tab for
government-subsidized housing that should not have cost more than $4
billion.

"Non-profit was the biggest misnomer ever used in these circumstances,"
said Housing Minister Al Leach.

"Everybody through the piece made a substantial profit."

In the last several years, Ontario's fraud squad has turned up developers
who flipped land, designers who exaggerated costs, and builders who used
expensive bricks to increase their bottom line.

Documents alleging even more outrageous ways taxpayer money was misspent
litter the province's courts.

Police say, for example, that some of the cash went to buy Muskoka
cottages. Some was loaned to co-op housing staff -- interest-free. In
another possible scam, money earmarked to help the poor bought shares in a
country club.

Leach said some people were clearly out to make money. But, in other cases,
he said it was inexperience that wasted taxpayer money.

"Many of the sponsors of co-ops were well meaning agencies -- charitable
agencies that went in wanting to do the right thing," he said.
"Unfortunately, a bunch of people that were inexperienced and didn't have
the knowledge in how to undertake a project like that got caught in the
middle."

Ontario's Conservative government has cited the housing scam to justify its
decision to cancel all new public housing projects.

The decision, made three years ago just months after the Tories took
control from the New Democrats, has been blamed by advocates for the poor
on homelessness they say has reached disastrous proportions in cities such
as Toronto.

But the Tories have insisted that any new rental homes for the poor should
be built by private developers, not the government. That is until now.

On Tuesday, Leach suggested Ontario might one day give
government-subsidized housing another try.

"It's a matter of getting a handle on everything that's happened to date
and then going back and regrouping," he said. "Then perhaps (we could)
reintroduce the program at a future date but with much more stringent
controls."

Ministry officials could not provide more details.

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