M golden dilemma
Was there a heist?
BY Philip Lin
possibility that precious metals may have been
stolen from the Royal Canadian Mint is
"inexcusable," the federal minister responsible
for the Crown corporation said Monday.
The findings of a long-awaited external audit,
released earlier in the day, concluded that
$15.3 million in missing gold is not the result
of accounting or bookkeeping errors, raising
even more questions about the whereabouts of the
metals from what has been touted as one of the
most secure facilities in Canada.
"The mint's still unexplained loss of precious
metals is inexcusable," Transport Minister John
Baird and Minister of State for Transport Rob
Merrifield, whose department is responsible for
the mint, said in a joint release. "The mint
will be held accountable."
The Royal Canadian Mint says the precious metals
seem to have vanished from its inventory in the
2008 fiscal year, according to the third-party
review conducted by Deloitte & Touche LLP.
External auditors have been working since early
March to determine whether theft or an
accounting error is behind an "unreconciled
difference" between the mint's 2008 financial
records and its physical stockpile of gold and
other precious metals at its downtown Ottawa
The report released Monday concluded that "the
unaccounted-for difference in gold does not
appear to relate to an accounting error in the
reconciliation process, an accounting error in
the physical stock count schedules, or an
accounting error in the record-keeping of
transactions during the year."
It is not clear at this stage whether any gold
is physically missing from the inventory, the
corporation said in a release. "All possible
explanations for the inventory difference need
to be investigated."
The Deloitte report identified three "areas for
consideration" to explain the unaccounted
- Gold may have been lost through the refining
process. The auditor suggested a review of the
technical processes used in the various aspects
- Errors in reconciling the financial records
and the physical stockpile of precious metal in
previous years, although it concedes "it would
be difficult to complete such a review due to
the passage of time, the availability of
supporting documentation and the turnover of
- The theft of the material and "potential
inappropriate activities by both internal and/or
About 17,500 troy ounces of gold, which
represents 0.32 per cent of the mint's stock,
were unaccounted for, the report said. "A higher
amount of gold should be on hand than the
physical amount of gold counted," it said. (Gold
is measured in troy ounces, which is heavier
than the much more common avoirdupois ounce used
for measuring weights in food.)
The $15.3-million figure is based on gold prices
on Dec. 31, 2008, the mint's fiscal year-end
date. At Monday's prices, the precious metals
would be worth about $16.3 million.
An unaccounted for difference in silver also was
identified, the report noted.
Despite the $15.3-million inventory difference,
the mint still says a "record profit is
projected" for 2008.
The government said late Monday that it has
"instructed the board to withhold all bonuses
payable to executives until this matter is
resolved to our satisfaction."
The annual report and financial statements have
been submitted to the auditor general's office
and are expected to be approved by the mint's
board of directors in early July.
The ministers have also ordered the mint to
report on its precious metals inventory on a
quarter basis, rather than twice-annually. "Our
government is committed to effective governance
and accountability to Canadians," they
The corporation said the unreconciled precious
metals only relate to metals owned by the Royal
Canadian Mint, and not to the stockpile owned by
the mint's customers stored in Ottawa.
"All individual customer holdings and metal
deposits entrusted with the Royal Canadian Mint
are secure and have been fully accounted for,"
the corporation said.
On March 23, the Crown corporation sent a letter
to Minister of State for Transport Rob
Merrifield, whose department is responsible for
the mint, saying the mint had lost track of the
Ian E. Bennett, president and CEO of the Royal
Canadian Mint, said Monday the mint continues to
work with third parties to assist the
corporation in its review of specific aspects of
"We have also requested the RCMP's assistance to
investigate the matter and the mint has
committed to fully co-operate with them."
RCMP spokeswoman Cpl. Caroline Poulin said
Monday that the police force's review is
The opposition parties told Canwest News Service
that the situation reflects the government's
"Either they've got to admit that they've got
somebody stealing the gold, or they're
incompetent and they lost $15 million worth of
gold because they're not very good at refining
and re-refining," NDP finance critic Thomas
He chastised the Crown corporation for releasing
the report after the House of Commons adjourned.
"Again, it's again a scandalous inability to
handle the public interest and the public purse.
Liberal transport critic Joe Volpe said he's
holding the ministers responsible for the issue
and called for their resignation.
"It does beg the question: when is the minister
leaving? When is the chairman of the mint
leaving? When are they going to change the CEO?"