Retired city worker's credentials used in $2.5M Toronto electricity fraud attempt: report

The City of Toronto was nearly swindled out of $2.5 million as a result of an electricity fraud in 2019, in which a retired city employee's credentials were used to sign contracts with third-party energy retailers instead of with Toronto Hydro, the auditor general's office says.

A report from the office released June 21 found that 14 city-owned properties' electricity accounts were switched to two different third-party energy retailers without the city's knowledge.

The city's Corporate Real Estate Management Division identified that the accounts had been switched in July 2019, after it found the "unusual" invoices during a routine account review, the report says.

The contracts with the third-party retailers were valued at $4.2 million, which is $2.5 million higher than what the city would pay with Toronto Hydro, the report says. 

The report also says that $250,000 was paid to the two energy retailers between September 2019, when the contracts began, and January 2020, when they were cancelled. The money was later recovered by the city. 

"Given the serious nature of the allegations and the dollar values involved, the Auditor General's Office conducted an investigation to try to identify who entered the city into these contracts and whether any wrongdoing was committed by a city employee," said the auditor general's report.

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The auditor general's investigation began in 2020 and concluded in June 2025.

Unclear if any city employees involved: report

The investigation found that retired city employees' identifications were "fraudulently used to set up the contracts with the energy retailers," and that the alleged city employee did not sign the contracts.

The auditor general said it was "unable to identify if a city employee was involved in this case."

It also found that consulting firm owners seemed to have involvement in establishing the contracts with the retailers, but that could not be substantiated due to a lack of evidence. The report says the matter has been referred to Toronto police since one of the firm owners has been involved in other allegations in the past. 

In an email to CBC Toronto, Toronto police said they would not provide an interview and that their review is in progress.

"The matter has been referred to us for review, and we're currently assessing whether it meets the threshold for a criminal investigation. That process is still underway," said Toronto police spokesperson Stephanie Sayer on Monday.

Audit committee to look at investigation

The auditor general is now asking the Toronto city council to request the city manager to forward the investigation report to other departments of the city to "encourage diligence in reviewing and approving invoices."

The item will be considered by the audit committee on Friday, and if passed, it will be discussed during city council later this month. 

The chair of the city's audit committee, Coun. Stephen Holyday, said he hopes to see a change to prevent such situations in the future.

"Any lessons that come out of this that can make for a stronger process means that we've got stronger security at the city for these types of issues in the future," Holyday said.

He said he is "relieved" to know that there was no financial loss to the city.

"It's a lot of money. Electricity is over $200 million a year, with many electrical accounts, and so ensuring that you've got people looking at this and the automated systems in place means that we have better protections for taxpayers at the end of the day," said Holyday.

In a statement, the city of Toronto said it is committed to maintaining "strong internal controls to safeguard public funds."

"The City is committed to ensuring the integrity of its operations and maintaining strong internal controls to safeguard public funds, with proper controls and processes in place to identify and prevent the misuse of public funds," said the city's manager of media relations and issues management, Russell Baker, on Tuesday.

Jeff Filliter, a fraud investigator at Ontario-based investigation agency Haywood Hunt and former RCMP officer, said one way to avoid such problems is a "separation of duties."

"One person is responsible for each factor in each step of the process along the way, and each of those steps is checked by the next person in line, and that would potentially have avoided all of this," Filliter said.

A spokesperson for the auditor general said on Tuesday that since the accounts were switched without the city's knowledge, a "separation of duties" would not help in this situation.