It was better to cut a deal with the company building a cancelled gas-fired power plant near Toronto than to risk getting sued by them, Ontario Premier Kathleen Wynne told a legislative committee Tuesday.
The plant, which was scheduled to be built in Oakville, was one of two the government mothballed to appease locals who opposed the projects. The cancellations, which were largely seen as a bid to shore up votes before the 2011 election, are estimated to cost up to $1.1-billion.
The government ultimately agreed to enter arbitration with TransCanada Energy, the company building the Oakville plant. Ms. Wynne was not directly involved in the cancellation, but was one of several cabinet ministers who signed off on the negotiations.
The provincial auditor found that the contract with TransCanada contained provisions that could have helped the government pay less compensation for cancelling the plant, but that the government decided to waive these clauses when it started negotiating.
Ms. Wynne defended this decision.
“There was risk associated with both paths but there was a greater risk to litigation, so we chose negotiation,” she said.
The province ultimately gave TransCanada a new contract to build a plant near Napanee in Eastern Ontario.
The Premier did not make clear if she knew the negotiating mandate had abandoned the potentially money-saving provisions in the contract, but said she did not know all the details of the talks when she signed off on them.
"We did not have chapter and verse what was going on in those negotiations, nor would we in any other negotiations,” she said.
New Democrat MPP Gilles Bisson accused the government of simply giving up on getting a good deal.
“You threw in the towel and you wrestled yourself to the ceiling,” he said. “You gave up your protections.”
Progressive Conservative energy critic Lisa MacLeod, meanwhile, said the Premier’s story did not jibe with that of civil servants who have previously testified at committee. Ms. Wynne said that, in the early days of the cancellations, the government did not know what the total cost would be, and therefore stuck to the relatively low figure of $40-million when discussing Oakville.
Civil servants have said that it was clear from the start it would cost more than that.
"Who's telling the truth, them or you?" Ms. MacLeod asked in a testy exchange that often saw her and the Premier talking over each other.
Ms. Wynne conceded that she did know it would cost more, but that it was not clear what the price tag would be.
“There was broad knowledge there would be other costs that would accrue over time, but we didn't know exactly what they would be,” she said.
Ms. Wynne also denied knowing anything about an Ontario Provincial Police investigation into the deletion of gas-plant-related e-mails. Those documents occurred under Ms. Wynne’s predecessor, Dalton McGuinty, and Ms. Wynne told the committee the investigation concerned the former premier’s office and not hers.
The session in the hot seat was Ms. Wynne’s second.
The committee has been hearing testimony for nearly 10 months on the gas plants. It must eventually write a report and decide whether to recommend holding anyone in government in contempt of parliament.