There is a an intricately intertwined arrangement that effectively
controls Ontario's gravel industry, involving these organizations:
APAO (Aggregate Producers' Association of Ontario) is Ontario's industry association for the gravel (aggregates) industry and it is also a registered lobbyist organization.
TOARC (The Ontario Aggregate
Resource Corporation) is a corporation wholly owned by APAO and has
as its soul responsibility the running the Aggregate Resources
Trust (the Trust). TOARC collects gravel haulage levies
for the Ministry of Natural Resources.
The Trust (the Aggregate Resources Trust) holds funds that
are government property, according to TOARC and the
Ministry of Natural Resources. The Trust, by means of TOARC,
pays APAO to rehabilitate certain orphan pits and quarries.
TOARC pays APAO from government funds in the Trust, which is
managed by TOARC, which is owned by APAO, which is paid by
TOARC from Trust funds, etc.
(Ontario Ministry of Natural Resources) is responsible for
managing the Ontario gravel industry. In 1997, MNR created
the Trust by signing an Indenture with APAO's TOARC to create
the Trust, and at the same time turned over $58 million of
government funds to the Trust, of which $49 million was then
handed by TOARC to the gravel producers.
This $49 million included security deposits which were to have
been used to guarantee the rehabilitation of gravel pits and
quarries, but that guarantee vapourized.
2. General Questions about the Aggregate Resources Trust
Gravel Watch, a citizen's watchdog group, has asked to Ontario Provincial Auditor general questions about the Aggregate Resources Trust, including:
Did the Ministry have an appropriate business case when signing up TOARC to manage the Trust?
Did the Ministry have appropriate controls for TOARC's disbursal of $49 million to gravel producers?
Does the Ministry have adequate procedures to monitor potential conflicts of interests in TOARC, e.g., are such procedures sufficient for dealing with the potential conflict of interest of TOARC Directors having personal or company financial interest in TOARC's collections and its disbursals?
Assuming MNR single-sourced APAO/TOARC to manage the Trust, were basic principles of government procurement followed?
3. Specific Questions about the Aggregate Resources Trust
Gravel Watch has asked the Provincial Auditor a number of specific questions about the Aggregate Resources Trust, including:
When TOARC collects government charges for gravel haulage (about $9 million per year), is there a problem that the owners of TOARC, by means of APAO, are the same people being taxed?
How does TOARC keep its program of "education" about the gravel industry separate from APAO's grass roots lobbying?
Is the annual transfer of government funds (about $600 thousand) from the Trust to APAO done in a sufficiently monitored and accountable fashion?
How does APAO avoid blurring its goal of lobbying the MNR with its arrangement as a partner of the MNR in controlling TOARC?
How does TOARC protect sensitive information about gravel licences from possible use by APAO for its purposes such as member recruitment, and from APAO members for purposes such as competitive advantage?
Were the procedures whereby $58 million in government funds were transferred to TOARC carried out in a reasonably documented way according to accepted standards?