TORONTO – The governing Liberals estimated a worst-case scenario early last year of $900 million in costs to scrap two gas plants in Oakville and Mississauga, according to documents recently tabled to a legislative committee.
A footnote at the bottom of a February 2012 Treasury Board document explained the government was negotiating with the developers to settle the cancellation of the plants “with an exposure identified up to $900 million depending on the outcomes and mechanism of the settlement.”
The Progressive Conservatives said the footnote was redacted from one of the documents they received a week ago, showing the Liberals were trying to cover up the potential true costs of pulling the plug on the plants.
“We believe that they continued to say $40 million and $190 million when all along they knew they had a potential risk of $900 million,” said Progressive Conservative Vic Fedeli, who brought up the documents at the legislative committee hearings Thursday.
But the Liberals say the $900 million figure was among many routine “worst-case scenarios” that finance officials use to plan for costs, such as welfare.
It represents the “absolute worst-case scenario if everything went wrong,” said Liberal House Leader John Milloy.
He also said there was no attempt to hide the footnote and both documents contained the $900-million figure.
“My understanding is there were different versions of that document because whether it was drafts or the way it was printed or whatever,” he said.
“He got that document. The footnote was there. He got multiple copies of the document.”
The Liberals weren’t misleading anyone as the estimate was made months before any final settlement was reached with the developers, Milloy added.
The government announced in July 2012 that the cost of relocating the Mississauga plant was $180 million – later revised to $190 million. A few months later in September, it said the Oakville plant relocation would cost $40 million.
They stuck to those figures until April this year, when new figures from the auditor general and the Ontario Power Authority pegged the total costs at at least $585 million. The auditor’s report on the Oakville plant costs is expected in August.
Charles Sousa, who announced the cancellation of the Mississauga plant in the dying days of the 2011 election, said Thursday he wasn’t aware of how much it would cost to scrap the gas plants when he was sworn in as finance minister in February.
He also said he wasn’t told about the “worst-case scenario” of $900 million, he told the committee.
Asked to explain the footnote, the minister said “it means that someone has taken precautions, that it’s still under negotiations and that it makes reference to the fact that it’s dependent upon those negotiations.”
“Obviously, those negotiations took and, from what I understand, it didn’t come to the $900 million,” he told the committee.
The New Democrats said they’re surprised that Sousa wouldn’t have asked about the costs before he took over as the province’s chief financial officer.
They also questioned why the Liberals didn’t let the clock run out on the Oakville project, which would have been a much cheaper route.
The contract would have allowed the OPA to terminate the contract by end of 2011 “without penalty,” according to a finance document dated Jan. 16, 2012.
Asked whether he thought it was irresponsible to end the contract earlier and incur larger costs, Sousa was tightlipped, saying the NDP was making assumptions about what the government agreed to.
“It’s astounding … that you’re the guy in charge of a $120-some-odd-dollar budget and you think it was financially prudent for the government to take a position that just costs us an extra half a billion dollars,” said New Democrat Gilles Bisson.
“I’m a little bit speechless on that comment, and I’d just say that if that’s where you’re coming from, I think we’re in deep trouble.”
Sousa said he always opposed the Mississauga project and recused himself from any high-level discussions about the plant while serving in cabinet.
He said he first learned it would be cancelled when two of former premier Dalton McGuinty’s top advisers – Don Guy and David Gene – told him during the election campaign.
Sousa made the announcement Sept. 24, 2011, just a few days before voters went to the polls.
Premier Kathleen Wynne apologized last week for the $585 million spent to cancel the two gas plants, after repeatedly rebuffing opposition calls to say she was sorry.
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