The federal government is seeking a private collections agency to help it retrieve millions of dollars in unpaid fines related to criminal charges.
To get companies to help recover money related to court and legal costs, the Conservative government appears to be positioning itself as both tough on crime and tough on costs, as the economic recovery drags and government deficits grow around the world.
As of March 31 of this year, more than 22,000 people owed close to $129-million in unpaid fines, according to the Public Prosecution Service of Canada. Currently, an in-house team of 19 civil servants administers collection through the National Fine Recovery Program, which will end next March.
Getting rid of the program will save the PPSC $1.6-million by 2013-2014, the organization said. But even if the organization is able to use a collection agency to recover all of the outstanding fines, a percentage of what is collected will be taken by the private debt collector.
The government must feel that either a private-sector organization will have a higher recovery rate, or that the private company can do the job more cheaply, said Liberal public safety critic Francis Scarpaleggia.
“Given that the total amount [of fines outstanding is] in the neighbourhood of $130-million or so, I rather suspect that it doesn’t make a very large difference to the federal coffers,” said Blair Crew, a common law professor at the University of Ottawa.
This is part of a larger plan to downsize the public service, Mr. Crew said.
The government might be able to save more than what they give up to the collection agency, making it a cost-effective way to still recoup the fines, Mr. Crew said, but the details of any possible private-sector contract are not known at this point.
“I’ve got a big question mark on that way of doing things,” said MP Françoise Boivin, justice critic for the NDP.
There has yet to be any evidence that shows a private company can provide debt collection services more efficiently that an already trained in-house team, she said.
But the move toward a contract with a private debt collector also gives the government a chance to highlight its tough-on-crime image, Mr. Crew said.
“It will bring more scrutiny to offenders who are willfully choosing not to pay,” he said.
PPSC said there are about 2,000 people who owe more than $10,000 in unpaid fines. Thousands more owe between $1,000 and $10,000, and 5,894 people owe less than $250.
The largest fines are probably related to the Federal Excise Act and might be for illegally smuggling cigarettes or for tax evasion, Mr. Crew said.
PPSC can currently seize the assets of individuals who have not paid overdue fines and put tax credits or refunds toward outstanding amounts. Over 2010 and 2011, PPSC collected $896,000 of the total $5-million in recouped fees through these means. It is not clear if a collection agency would have the same powers.
About 150 people were sent to jail for not paying their fines between April 2010 and March 2011.
The people who go to jail are usually those who can afford to pay, but refuse to do so. The onus is on the Crown to show an offender has the means to pay their fee but is choosing not to, Mr. Crew said. The most frequent reasonable excuse for not paying is lack of an income, he said.
A formal request for proposals from collection agencies is expected to follow Monday’s initial notice from PPSC.
- 2,009 people owed more than $10,000
- 1,049 people owed between $5,000 and $10,000
- 4,530 people owed between $1,000 and $5,000
- 3,702 people owed between $500 and $1,000
- 5,129 people owed between $250 and $500
- 5,894 people owed less than $250
The Canadian Press