Canadian Manufacturing

Premier denies any role in cancelling Ontario gas plants

Kathleen Wynne claims she learned about decision to cancel Mississauga plant through media



TORONTO—The Ontario Power Authority keeps changing the estimated cost for cancelling a gas plant in Oakville, Premier Kathleen Wynne said as she appealed to the opposition to wait for the auditor general’s report into the energy project.

Hours after OPA CEO Colin Andersen put the estimated cost at $310-million, Wynne testified under oath at the legislature’s justice committee to explain why her government continually referred to a $40-million cost for cancelling the Oakville plant.

“Whenever I have stood and used a number, that has been the number that I have understood to be the real number,” she told the committee.

“I believe the complexity and the fact that the OPA numbers keep changing justifies my decision to call in the auditor. We need to wait for the auditor general’s report.”

The auditor general reported the cost of halting another gas plant in Mississauga in mid-construction, just days before the 2011 election, was $275-million, $85-million more than the Liberals had been saying.

The auditor’s report on the Oakville gas plant won’t be ready until late summer.

Despite the changing cost estimates, the Progressive Conservatives and New Democrats accused Wynne of not being forthcoming, and wanted to know why the Liberals didn’t admit before her testimony the cost of cancelling the Oakville plant would exceed $40-million.

“I think that why she was so evasive in coming clean with a number was she knows her government’s been lying all along about it and didn’t want to put anybody else on the spot,” said PC energy critic Vic Fedeli.

“Seven times we’ve heard from witnesses that the government knew the number was higher than $40-million, and the fact that she wouldn’t acknowledge it just continues the cover up.”

The NDP also expressed frustration with Wynne’s refusal to admit the government knew earlier that cancelling Oakville cost more than the Liberals were claiming.

“We pressed her hard, giving her the space to acknowledge that all along they knew that there was no way that the cancellation of the plant would be limited to a $40-million cost,” said NDP committee member Taras Natyshak.

“She was evasive on that certainly.”

Wynne also testified that she wasn’t involved in the decisions to cancel the two gas plants in order to help save Liberal seats in the region, and said in the end the party bowed to the wishes of local residents.

“Despite expert advice, an open procurement process and all the decision points along the way, the overall process failed,” she said.

Even though she was Liberal campaign vice-chair in 2011, Wynne said she learned about the decision to cancel the Mississauga plant through the media.

Wynne voluntarily testified under oath at the justice committee.

As premier she could have declined to appear, but said she wanted to signal she was being open and transparent on the gas plants file.

Earlier in the day, the OPA gave the committee two new estimates for the cost of cancelling the Oakville plant and moving it to Napanee, a figure of $241-million from outside consultants it hired and a revised $310-million from the OPA itself.

“I guarantee that these numbers will continue to evolve and be debated as more information becomes available and assumptions, discount rates and planning scenarios are developed further,” the OPA’s Andersen said.

“Projects of this size and complexity have many moving parts and their costs evolve over time, and estimates are often very dependent on methodology, assumptions and judgment calls.”

Wynne complained that just five weeks ago the OPA gave her estimates for the Oakville gas plant that ranged from $33- to $136-million, a figure the agency had ballooned to $310-million by her testimony.

“It’s been very difficult for the politicians, government or otherwise, to get concrete answers, and that is a real problem,” said Wynne.

“I’ve been in a situation trying to provide concrete answers, and it’s very difficult given that the numbers keep changing.”

The Opposition said the updated estimates were proof the Liberals misled the public when they repeatedly said Oakville cost $40-million, which Andersen said is accurate to describe only the so-called “sunk costs”—money that cannot be recovered.

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