A Progressive Conservative government would try to get taxpayers their billion dollars back from the gas plant cancellations.
That was Leader Tim Hudak’s pledge on Sunday, as he reiterated a promise to have a judge probe the scandal that has dogged the Liberal Party for more than two years. One of the inquiry’s jobs, he said, would be to figure out if and how the government can get the Grits or the companies who were building the plants to compensate the treasury for the cost of pulling the plug.
“Whether it’s Liberals, whether it’s the well-connected, whether it’s companies that got rich at taxpayers’ expense,” he said, standing at the site of one of the plants, in the Toronto suburb of Mississauga. “If I have the opportunity, if I have the honour of serving as premier, of getting money back for taxpayers, I’ll do that in a second.”
The Liberals killed the unpopular projects in the run-up to the last provincial election in what was widely seen as a move to save the party’s local MPPs from defeat.
“A billion dollars went into this hole. You didn’t get a new hospital, you didn’t get an improved highway, you didn’t get a new university. All you got was one more Liberal MPP,” Mr. Hudak said.
Former energy minister Brad Duguid suggested Sunday there was no way the money spent on the power plants would be recouped.
“It’s easy to say these things,” said Mr. Duguid, who unsuccessfully tried to persuade then-premier Dalton McGuinty not to cancel the Mississauga plant. “If there were a way to make that happen, I’m sure we’d be happy to see that happen.”
The province had to pay compensation to Eastern Power and TransCanada Energy, the companies contracted to build the plants, plus a massive loan incurred by an Eastern subsidiary. Ratepayers are also on the hook for the added costs of constructing the facilities further away from Toronto. A pair of audits pegged the combined total of the cancellations at more than a billion dollars.
One audit last year found that the government was so desperate to scrap the Mississauga plant, it agreed to pay some unusual expenses in exchange for getting Eastern to stop construction. Among other things, the government compensated Eastern for an administrator who apparently made over $100,000 per year. The province also paid $149-million to the company’s lender, hedge fund EIG – a rate of interest so high, some lawyers thought it might be illegal.
The province also paid $40-million to cover sunk costs at the second plant in Oakville, which was to be built by TransCanada.
An Eastern Power subsidiary and TransCanada also got new contracts to build power plants elsewhere in the province.
New Democrat Leader Andrea Horwath has also called for a public inquiry, but Liberal Leader Kathleen Wynne has contended it would be too expensive. The Grits maintain a legislative committee, which investigated the matter for more than a year, was a better way to handle the scandal.
Mr. Hudak said the committee process wasn’t enough because some Liberal witnesses have had “convenient amnesia” while testifying. The Liberals charge some Tory witnesses have refused to appear at all and that Mr. Hudak, who also promised to cancel the gas plants in the last election, stonewalled during his testimony.
Mr. Duguid also charged that Mr. Hudak’s plan to end government subsidies for green energy projects would ultimately cost the treasury even more than the gas plant cancellations, because the government would have to pay off the green power companies to get out of the deals.
“I don’t know if he’s … just completely irresponsible and out of his mind,” Mr. Duguid said. “But the fact of the matter is, we cannot afford and ratepayers cannot afford tens of billions of dollars if costs if he was to cancel those projects.”
The Tory campaign issued a swift rebuttal, saying Mr. Hudak would only put the brakes on new wind and solar contracts, but would honour ones that have already been signed and where the company is producing power. Power contracts that are currently being negotiated would be dealt with on a case by case basis, and the Minister would be required to consult local municipalities, a PC spokesman said.
The PCs’ position now appears to contradict some of its former statements. Mr. Hudak’s own energy critic last week told the Globe the government could use “force majeure” to tear up contracts.