Power Plant Report Shows Liberals Throwing Good Money After Bad

April 15, 2013

QUEEN’S PARK – Ontario’s Auditor-General released his report into the cancellation of the Mississauga power plant. Following years of preparation construction, the Liberal Party then announced during the election campaign that construction would be halted and the project cancelled.

MPP Jim McDonell commented: “The decisions to cancel the Mississauga and Oakville power plants were purely political – it was a maneuver to save vulnerable Liberal seats in the GTA. The Auditor-General highlights some unacceptable examples of wasted public funds. For instance, the Government had no cancellation clause in its Mississauga contract with Eastern Power. In order to persuade Eastern Power to stop construction, the Government and the OPA agreed to settle an unrelated claim by Eastern Power regarding the Keele Valley methane plant. Despite legal opinions that damages could not amount to more than $7 million in the Keele Valley case, the Government and the OPA paid more than $15 million to settle the issue, writing $5 million off as a pre-payment for power they knew would never be generated. In another instance, an employee described as an “administrative assistant” was paid $110,000 per year without any tangible payroll or T4 records for the Auditor-General to see.”

MPP McDonell highlighted the ultimate bearer of all costs related to the cancellation: “The Auditor-General clearly identifies that the OPA was under intense pressure to halt construction in Mississauga at any cost. That is, at any cost to the Ontario taxpayer.”

The report states the OPA considered the option of building the plant without operating it, and found it to have potentially been the cheapest one, “but rejected it because of the difficulty of convincing the community that the plant would not operate and because the Government would have been seen as having paid money for nothing” – wrote Auditor-General Jim McCarter. Furthermore, the OPA admitted the power produced by the Mississauga plant would not have been needed “until at least 2018”.

MPP Jim McDonell stated: “Through their incompetence in contracting and cavalier attitude to public money, the Liberal Government placed themselves in a vulnerable position at the mercy of Greenfield and Eastern Power. As a result, the Auditor-General clearly states the contractors will make a higher return on investment once the plant is moved to Lambton, while the Ontario taxpayer is stuck with a massive cancellation bill. Moreover, despite Greenfield being offered capital by Canadian companies to finance the Mississauga gas plant, they chose a US lender to which we shall repay $59 million borrowed by Greenfield plus $98 million in lost interest and penalties. Ontarians should be appalled that this Liberal Government allowed such a travesty to happen.”