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Workers on the site of the future route of the Air Rail Link line approaching Pearson International Airport Nov 1, 2012.

Moe Doiron/The Globe and Mail

Ontario's transportation planning agency comes under harsh criticism by the province's Auditor-General for a number of multi-million dollar projects that are plagued by cost overruns and challenging to implement.

Metrolinx has spent more than $700-million developing the Presto fare-card system, ranking it among the most expensive systems in the world, Auditor-General Jim McCarter says in his annual report, released on Wednesday. However, the report says, Metrolinx has failed to create a region-wide integrated transit fare system for the Greater Toronto and Hamilton areas – the underlying reason for Presto, the report says.

The Ontario government created Metrolinx to develop an integrated transportation network to address congested roads and a public transit system increasingly unable to meet the needs of a growing population.

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The Presto fare card has been in service for about two years. but only about 18 per cent of transit systems in the Greater Toronto and Hamilton areas participate in it, the report says.

The auditor also criticizes Metrolinx's cost estimates associated with two other major projects – the Air Rail Link to be built between Union Station in downtown Toronto and Pearson International Airport, and the revitalization of the train station itself.

Assumptions about the estimated annual ridership on the Air Rail Link may be optimistic and operating on a break-even basis may not be feasible. The revitalization of Union Station is plagued with cost overruns, the report says. The cost of restoring the train shed alone could reach $270-million, 25 per cent higher than Metrolinx's initial estimate.

In his tenth annual report, Mr. McCarter also identifies a number of other areas where the government is not getting the best bang for its buck, including soaring spending on provincial policing at a time when crime rates are dropping and a mandatory vehicle emissions-testing program that is doing little to reduce smog in Ontario and unnecessary diagnostic medical tests done by privately-owned, for-profit clinics.

As well, the report says, the government may be forced to write-off $1.4-billion in delinquent taxes because of a tardy collection process.

The latest revelations come as the cash-strapped government is embroiled in an escalating fight with the province's teachers, as part of its attempts to introduce an era of restraint and eliminate a $14.4-billion deficit.

"This report comes at a time when the industrialized world is struggling with the twin challenges of an economic slowdown and high debt, issues that also confront Ontario," Mr. McCarter said.

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His report says Premier Dalton McGuinty's government is spending more on salaries for the Ontario Provincial Police, even though crime rates and serious motor vehicle accidents have been declining for a number of years. The audit found that the OPP deploys the same number of police during peak-demand periods as during the slow morning hours.

Operating expenditures for the OPP totalled $979-million in fiscal 2011-12. Overtime costs increased by 60 per cent over the past seven years.

The report also criticizes the government's spending on prosecuting criminal charges. The number of crown attorneys has more than doubled over the past two decades, but the total number of criminal charges they handle in a year has barely changed, the report says. The government says many cases are more complex so more time is needed to prosecute them.

On the health-care front – the single largest expenditure for the government – the auditor notes that about 20 per cent of the diagnostic tests conducted by private, for-profit medical clinics may be "inappropriate."

The figure comes from the Ministry of Health's own estimates, the report notes. The vast majority of the 800 clinics that provide diagnostic services, such as x-rays, ultrasounds, as well as cataract and plastic surgery, are owned by physicians.

The Health Ministry has not analyzed the pattern of physicians referring patients to their own clinics, the report says.

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On the Drive Clean program introduced by the government in 1999, the report says vehicle emissions are no longer among the major domestic contributors to smog in Ontario.

The Drive Clean program identifies vehicles whose emission controls are malfunctioning and currently tests cars once they are seven years old, or those older than one year if ownership changes hands.

But more than three quarters of the reduction in auto emissions since 1999 is actually due to more stringent manufacturing standards and federal requirements for cleaner fuel, the report says.

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