TORONTO – Ontario’s auditor general should be called in to investigate the potential cost to taxpayers of the Liberal government’s decision to cancel gas plants in Oakville and Mississauga, the New Democrats said Friday.
The Liberals cancelled a planned 280-megawatt gas power plant in Mississauga just days before last year’s election, after scrapping another one in nearby Oakville the year before.
The plants were cancelled to save Liberal seats, but the government won’t say how much it expects to pay in penalties for its decisions, complained NDP energy critic Michael Prue.
“I think it is an embarrassment because they were in such desperate shape they were willing to sacrifice the people of Ontario’s money in order to secure those seats,” said Prue.
“It worked politically, but I think in terms of economics and doing the right thing, it was not.”
The Progressive Conservatives said anyone could have predicted there would be expensive lawsuits after the Liberals decided to reverse course and scrap power plants that were well into their construction phase.
“There isn’t a business person in the province of Ontario who didn’t know at the very outset, once the government decided to cancel that contract, that there would be a multi-million-dollar lawsuit,” said Opposition critic Frank Klees.
“It doesn’t take a great deal of knowledge about business, and it doesn’t take any about the energy sector, to determine somebody is going to pay the price here.”
EIG Management, a U.S. hedge fund which is suing the province for $300 million over the Mississauga power plant, this week rejected an $82.3 million-dollar offer from the Ontario Power Authority.
The $82 million is obviously just the starting point for the cost of cancelling the gas plants, said Prue.
“If they’ve already been willing to offer up $82 million to get out of this, they have to know that that’s the start of the negotiation and there has to be more,” he said.
“It’s just one of two, and in my view the other one is liable to be more problematic because it was further down the road (to completion).”
Voters now know the minimum cost of saving Citizenship Minister Charles Sousa’s Mississauga-South seat, said Klees.
“We now know that seat cost at least $82 million,” he said.
Energy Minister Chris Bentley issued a statement Friday declining comment on the lawsuit.
“At this time there is on-going confidential, privileged and commercially sensitive negotiations and litigation. I look forward to speaking more about this in due course,” Bentley said in an email. He was not available for an interview.
During nine hours of recent testimony before a legislature committee, Bentley refused to tell the opposition parties how much the province could ultimately pay in penalties for cancelling the two gas-fired power plants after construction had begun on both.
“There was a motion that this information be given to the Estimates Committee and it was denied by both the Ontario Power Authority and the Ministry (of Energy),” said Prue, chairman of the committee.
“Bentley did provide a letter saying he would not discuss how much money is being offered or what they’re on the hook for.”
The Oakville gas plant was cancelled by the Liberals after well-heeled local opponents brought in American activist Erin Brockovich to speak against the project being located near a residential area.
Work on the Mississauga plant continued for weeks after the Oct. 6 election, even though the Liberal government made it clear the project would have to be located elsewhere.
The Liberals won 53 seats, one short of a majority government.