October 8, 2013 6:40 pm
Updated: October 8, 2013 7:03 pm

Cancellation of Oakville gas plant cost at least $675M: auditor general


ABOVE: The Oakville gas plant cost at least $675 million to cancel. Alan Carter reports. 

TORONTO – Cancelling the Oakville gas plant cost at least $675 million, according to an Ontario auditor general’s report released Tuesday – almost 17 times the $40 million the Liberal government originally claimed.

This raises the total price tag for cancelling two power plants to almost $1 billion. And that figure could still rise, says Auditor General Bonnie Lysyk.

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In the Liberal government’s mid-election haste to make the problem disappear, Lysyk found, it overpaid – multiple times.

The province promised to compensate builder TransCanada Energy for the full value of the contract rather than relying on protections in the contract that could have minimized damages.

“Given Oakville’s strong opposition to the plant, it may well have been possible for the [Ontario Power Authority] to wait it out, with no penalty and at no cost,” Lysyk said in the report. “The OPA could have invoked a clause in the contract that made it liable for reimbursing TCE for lost profits only in the event of a discriminatory action, and argued that the cancellation of the plant would not have met the contract’s definition of such an action.”

READ MORE: A timeline of the cancelled Mississauga and Oakville gas plants

Lysyk found the cost of cancelling the Oakville plant was driven up by a decision by the premier’s office to “keep TransCanada whole,” so the company didn’t lose money.

“We believe that the settlement with TCE will not only keep TCE whole, but may make it better than whole,” the auditor wrote. The report lists “the estimated benefits to TCE of approximately $225 million from the settlement negotiated” for the doomed plant’s reincarnation in Napanee.

Former auditor general Jim McCarter pegged the cost of cancelling the Mississauga gas plant at $275 million. This brings the combined cost of cancelling both plants to at least $950 million.

Premier Kathleen Wynne apologized again Tuesday, calling the ordeal a “big mistake.” She accepted the auditor’s report and suggested the government could learn lessons from the ordeal.

“We will introduce new rules based on the findings of the auditor general to make sure that this never happens again,” she said.

WATCH: Premier Kathleen Wynne and provincial Energy Minister Bob Chiarelli offer their reaction to the release Wednesday of the auditor general’s report.

Some of those changes will include allowing affected communities to criticize proposed infrastructure projects and new rules to limit political interaction in commercial third-party transactions.

The two plants were cancelled in the lead-up to the 2011 general election due to opposition from local community groups, as well as the provincial NDP led by Andrea Horwath and the Progressive Conservatives led by Tim Hudak.

Both the NDP and Tories supported the closure of the plants at the time but have slammed the cancellations as a Liberal plot to save seats in the Toronto Area.

The Liberals, who lost their majority in the 2011 election, did hold on to all their seats in Oakville and Mississauga.

“$1 billion for one liberal seat,” PC energy critic Lisa Macleod told reporters Tuesday following the release of the report. “And that tab is still running.”

During a press conference at Queen’s Park, MacLeod suggested the Premier be ousted from office over the cancellation costs.

“It’s one of the things that I think is going to be a lightning rod for the public,” she said. “This could have built 25 state-of-the-art high schools.

“That’s 12,000 visits to an MRI machine. People aren’t going to take this anymore; this is a substantial amount of taxpayer dollars,” Macleod said.

NDP leader Andrea Horwath followed Macleod’s lead, suggesting the money could have paid for 18,000 nurses, home care for 250,000 seniors or 2,200 buses for communities across Ontario.

WATCH: Andrea Horwath non-committal on non-confidence motion

But Horwath, who has twice propped up the Liberal government, would not say if the cancelled gas plants would convince her to force an election.

“I don’t have the power to actually do that,” Horwath said. “I think Ontarians are going to have to be heard about today’s auditor general’s report and I’m pretty certain that they are going to be unhappy with the result of today’s auditor general’s report, as I am.”

While Wynne has apologized for how the cancellation was handled, the closures have continued to be a source of vitriol at Queen’s Park with the Tories introducing a contempt motion against Energy Minister Chris Bentley and criminal investigation launched by the Ontario Provincial Police into the deletion of emails relating to the cancellations.


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