Auditor General Jim McCarter says Ontario fails to collect up to $500 million in tobacco taxes annually — the same amount as this year's projected deficit.
McCarter says he's particularly concerned by the potential size of the tobacco tax gap, which he first pointed out in his 2001 audit.
He says the province has inadequate policies, procedures and technology to ensure that the correct amounts of taxes are paid on gasoline and diesel fuel as well.
Millions have been spent to reduce court backlogs, but the auditor says the problem continues to grow, as have the average number of court appearances for each case, driving court costs even higher.
There is a serious absenteeism problem in jails, where corrections officers take an average of 32.5 sick days each year.
In his annual report, McCarter criticizes the government for a lack of adequate oversight of many programs to ensure taxpayers are getting value for their money.
For example, special education funding is up over 50 per cent in six years, but the number of children helped is up only five per cent, and no one can explain the situation.
The auditor says Ontario needs to improve the way it follows up violations of food safety standards in slaughterhouses, meat-processing plants and dairies.
McCarter also found Ontario residents with serious mental illnesses who are living in communities may not be receiving an appropriate level of care, and half of the mentally ill patients in hospitals could be discharged if adequate community services were available.
Mental health services for children were described as a patchwork system without any orderly or uniform standards across the province, while up to 90 per cent of the people the government estimates need addiction treatment may not be getting it.
McCarter reminded the government that in previous reports, he had warned about the need for rigorous oversight of services, including those delegated to municipalities or other organizations to deliver.
In 2003, he specifically mentioned the Technical Standards and Safety Authority, the industry-funded organization with the responsibility for safety and inspections of a number of industries, including propane facilities.
"This summer's tragic propane explosion in Toronto was a powerful reminder of the importance of government oversight, and the risks this oversight is meant to safeguard against," wrote McCarter.
"It was apparent to us then … that [the government] did not exercise adequate oversight of delegated authorities, of which the TSSA was one of the largest."