The Ontario government is fighting with the Auditor-General over a $10.7-billion discrepancy in the province’s net debt and a $1.5-billion difference in last year’s deficit.
Auditor-General Bonnie Lysyk contends that the government must stop counting $10.7-billion in two provincial pension plans – one for teachers and one for Ontario Public Service Employees Union workers – as an asset on its books, since the government cannot gain access to the money.
Ms. Lysyk’s accounting would add that amount to the province’s net debt, pushing it to more than $305-billion last year. Meanwhile, the $1.5-billion the province contributed to the pension plans last year would count as part of the deficit, putting it at $5-billion instead of the $3.5-billion the government had hoped to announce.
The fight meant that the government missed its deadline last week to release its public accounts, which cannot be tabled without the Auditor’s approval. Instead on Monday, the Liberals released an unaudited version of the books.
Finance Minister Charles Sousa and Treasury Board President Liz Sandals said they will temporarily accept Ms. Lysyk’s interpretation of the pension math while the government consults other accounting experts to determine who is correct. They insisted that the extra debt would not affect borrowing costs or the plan to balance the books.
Debt and deficit are touchy subjects for the Liberals. The province is the most indebted subsovereign jurisdiction in the world, and balancing the books next year was a key campaign promise for the Grits in the past election campaign.
Mr. Sousa said the government learned of Ms. Lysyk’s problem with the government’s accounting methods only on Sept. 13. He floated the possibility that her office had leaked information to the Progressive Conservatives, based on questions from the Tories to the government on Monday in the legislature about the dispute before the books were released.
“Obviously, the Opposition had wind of the fact that there was a dispute,” he said. “If there are discussions being taken by the Opposition with other offices of the legislature, that’s unacceptable.”
In an interview, Ms. Lysyk said her office actually first told the government of its concerns over the pension calculations in June, after some of her staff undertook a “deep dive” into the province’s pension system. She said she wrote to the government again in September to discuss how they could resolve the disagreement.
Ms. Lysyk said she had been meeting with the government to discuss the issue as recently as Monday morning, and the Liberals gave her no indication that they were about to release the unaudited books. “I was kind of surprised that this happened,” she said. “We do our job, and unfortunately sometimes what we have to say is not always what they want to hear.”Ms. Lysyk pointed out that Ms. Sandals herself revealed the dispute between the government and the Auditor to the legislature last week.
She said she had not told the Opposition anything about the matter. “I was asked by members of the Opposition last Wednesday the reason for the delay and replied that I was not at liberty to discuss the situation,” she said.Report Typo/Error