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Canadian SIN Cards Wide Open to Fraud & Misuse; Millions More Active SIN Cards Than People |
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Written by The Fraser Institute
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Thursday, 08 February 2007 |
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Mismanagement and fraud within Canada's system of Social Insurance Numbers is costing Canadians between $377 million and $2.4 billion annually, says a report from The Fraser Institute, an independent research organization with offices across Canada.
The new report, Mismanagement of Canadians' Social Insurance Numbers: Should We Be Concerned about Losses and the Potential for Fraud? concludes that Canada's system of managing SINs (social insurance numbers) is open to fraud, misuse, and overpayment, and it urges the government to review the system with an eye to implementing reforms.
"Our social insurance numbers have become the backbone of virtually every federal income support program. Yet past reports by the Auditor General show there are 2.4 million more social insurance numbers than actual Canadians," said Niels Veldhuis, Senior Research Economist for The Fraser Institute.
In the new study, Veldhuis and his co-authors review past reports from Canada's Auditor General and summarize problems related to managing SINs. The study contrasts the number of useable SINs with the actual number of Canadians to identify potential sources of problems with the use of SINs. The study also looks at a series of case studies completed by the Auditor General on programs that rely on SINs and then presents estimates of potential losses associated with SINs.
The study cites Statistics Canada numbers showing income support programs linked to SINs such as Canada Pension Plan (CPP), Old Age Security (OAS), Employment Insurance (EI), and welfare totalled $117.9 billion in 2005/06. This represents more than one-fifth of all government spending that year, including federal, provincial, and local spending.
"Given the number of government programs that rely on the SIN system and the amount of money disbursed through these programs, the management of the SIN system is critical. Yet the Auditor General has now criticized the federal government on several occasions for its management of the SIN system," Veldhuis said.
But Veldhuis said the greatest area of concern may be the significant number of useable and non-dormant SINs in Canada that exceed the actual population. "Why are there more SINs than people? What is happening with those SINs? Are they being used, and if so, for what? The government doesn't know and that invariably means more tax dollars are disappearing without accountability," he said.
Based on the Auditor General reports, Veldhuis and his co-authors estimate that the range of potential losses is between 0.32 per cent and two per cent of program spending, equivalent to a potential dollar loss of $377 million to $2.4 billion for 2005/06 based on the various programs linked to the SIN. And these calculations are conservative since they rely on estimates from the Auditor General which are almost exclusively estimates of overpayments and do not necessarily include estimates for fraud. |
