Canadian Manufacturing

Report adds fuel to opposition fire over cancelled Ont. gas plants

by Keith Leslie, The Canadian Press   

Canadian Manufacturing
Manufacturing Energy Oil & Gas justice Ontario politics

Premier, energy minister refusing demands to apologize for soaring costs, update costs

TORONTO—Ontario Premier Kathleen Wynne needs to stop hiding the truth and tell people how much it will cost for the Liberal government’s decision to scrap a planned power plant in Oakville, opposition parties are demanding.

The auditor general’s report showing the Liberals low-balled the $275-million cost of cancelling a gas plant in Mississauga by $85-million gave the Opposition new ammunition to attack the government’s claim that cancelling the Oakville plant cost $40-million.

“The auditor told us that he will be using the same criteria in telling us how much your Oakville cancellation really costs,” Progressive Conservative energy critic Vic Fedeli said during question period.

“You’re sticking to $40-million, but the OPA (Ontario Power Authority) shows that those same extra costs the auditor will look at using, will bring this to $991-million.”


The New Democrats said the Liberals should never have turned to the private sector to build electricity projects in the first place, and called on the government to update the $40-million figure for the cancelled Oakville gas plant.

“This government signed private power deals, defended those deals and insisted that they were absolutely necessary, (but) when it looked like it would cost them political power, they cancelled the deals,” said NDP Leader Andrea Horwath.

“And not only did they stick the public with the bills, they’ve gone out of their way to hide the details and the real costs.”

Wynne and Energy Minister Bob Chiarelli refused repeated opposition demands to apologize for the soaring costs of cancelling the Mississauga gas plant, and also declined to update the $40-million figure for the Oakville project.

“It was a political decision that in the implementation had business costs associated with it,” Wynne told the legislature.

“The reality is every member in this house, all parties, agreed that these gas plants should be relocated, and there was a cost associated with those relocations.”

Outside the legislature, Chiarelli admitted the deal with the developer of the Oakville power plant also includes items that will add hundreds of millions of dollars to the total bill.

However, the minister said he wasn’t prepared to offer any new figures until the auditor releases a separate report on that project, expected in August.

“The memorandum of agreement specified $40-million, (but) it also specified items such as price for power and the cost of the turbines,” said Chiarelli.

“That is the information that we have, and we will let the auditor general do his work as he did on the other facility and wait for his report.”

Earlier, the former secretary of cabinet testified at the justice committee that the Liberals knew there would be extra charges for cancelling Oakville on top of the $40-million in so-called “sunk costs,” money spent that cannot be recovered.

“There are buckets of costs, and depending on the structure of the final deal there’s different buckets,” said Shelly Jamieson, the former head of the Ontario public service.

“You will learn from this (Mississauga) report on what those different buckets are, and it doesn’t surprise me at all that you’ll see an analysis with the same buckets in the future report.”

Kristen Jenkins, a vice-president of the OPA, testified that the Liberals would have known there were many more items that would add to the total bill for cancelling a gas plant in addition to the sunk costs.

“At the time the memorandum was signed, the exact quantum of those costs was not known … because they require engineering and design work,” said Jenkins.

“But certainly that there were these categories of costs would have been known in September when the MOU was concluded.”

Jenkins also said the OPA took direction from an Energy Ministry staffer to use a very “strict” interpretation of the gas plant documents requested by a legislative committee, but later found out the ministry itself wasn’t using such narrow criteria.

“The correspondence needed to mention Oakville or Mississauga otherwise the correspondence and any attachments were to be excluded, even if the attachments mentioned the cancellation of the power plants,” she said.

The opposition parties have long maintained the government intentionally withheld documents from the committee, which led to a rare contempt of parliament motion and triggered the public hearings into the gas plan cancellations.

Former premier Dalton McGuinty blamed the gas plant debate for grinding the legislature to a halt when he suddenly prorogued the house last October, hours before the public hearings were to begin, and announced his resignation as premier.


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