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Newly elected Liberal Party leader Kathleen Wynne is speaks to media in Toronto, Ont. Saturday, January 26, 2013. (KEVIN VAN PAASSEN/THE GLOBE AND MAIL)
Newly elected Liberal Party leader Kathleen Wynne is speaks to media in Toronto, Ont. Saturday, January 26, 2013. (KEVIN VAN PAASSEN/THE GLOBE AND MAIL)

Wynne asks auditor to widen probe of cancelled Ontario power plants Add to ...

Kathleen Wynne will have Ontario’s Auditor-General broaden his probe into the costly cancellation of gas plants.

The premier-designate’s decision moves the controversial file out of the legislature for the time being. Last fall, the plants dominated the daily Question Period until Ms. Wynne’s predecessor, Dalton McGuinty, abruptly prorogued parliament.

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But an audit will not satisfy opposition leaders, who are pushing for legislative committee hearings or a public inquiry, which could go beyond financial transactions to investigate the political decision-making behind the cancellations. Such processes would also hold hearings, question witnesses and keep the scandal in the public eye daily, which could be more damaging for the Liberals.

The government put the brakes on two unpopular gas-fired electricity plants in the Toronto area at a cost of at least $230-million, in what the opposition calls an attempt to save Liberal seats in the 2011 election. A plant in Oakville was cancelled in October, 2010; the Mississauga project was deep-sixed two weeks before voting day.

Five months ago, a legislative committee voted to have Auditor-General Jim McCarter look into the Mississauga facility. In a letter on Thursday, Ms. Wynne said the Oakville plant would be added to his investigation.

Mr. McCarter said in an e-mail to The Globe and Mail that he will confine his probes to the cost of pulling the plug on the two projects.

But unanswered questions go well beyond that.

The documents released by the government appear far from complete, fuelling suspicions not everything has been disclosed.

The Progressive Conservatives released correspondence last week revealing that an Energy Ministry official instructed staff at the Ontario Power Authority to exclude information requested by a legislative committee that examined the cancellations of the projects.

Tory Leader Tim Hudak said he would push to have the issue examined at committee hearings.

“I do have concerns that [the audit] may simply be an attempt to kick it down the road. And maybe it’ll be up to the next government to actually get the answers for the taxpayers who have been stuck with the bill,” Mr. Hudak said.

New Democrat Andrea Horwath reiterated her call for a public inquiry. If she does not get one, she said, her MPPs will keep raising the issue in the legislature.

“Let’s face it – the Auditor-General does not have the capacity to get at some of the very important information that we need. Who was making the decisions to cancel the gas plant? Where did the directive come from?” she said.

The Globe has reported the government paid nearly all of the $190-million in compensation related to the cancellation of the Mississauga project to eight hedge funds based in the United States and the Cayman Islands. The hedge funds got $149-million, more than twice as much as they had lent to the project developer, after waging an aggressive legal battle in the courts in New York and Ontario.

There is no way to quantify the cost of cancelling the Oakville plant based on the 56,000 pages of documents the government released. The government reached a deal last Sept. 24 with TransCanada Corp., the Calgary-based energy giant that had the contract for the proposed 900-megawatt natural gas plant, to relocate it to a site near Bath in Eastern Ontario. However, no documents later than Dec. 31, 2010, were made available.

Mr. McGuinty’s office established an initiative codenamed Project Vapour to manage fallout from the decision to cancel the Oakville plant. A dozen e-mails among 20,000 pages released by the government last Oct. 12 – three days before Mr. McGuinty prorogued the legislature – show his closest advisers were directly involved in sensitive talks with TransCanada.

Mr. McCarter said the legislative committee did not ask him to probe the Oakville plant last fall because its relocation had not been finalized and some MPPs “felt it might prejudice the negotiations if the auditor were to come in and start ‘digging around’ prior to a deal being struck.”

Mr. McCarter said he expects to complete his review of the Mississauga plant before he steps down at the end of April. But the Oakville review “would certainly not be able to be completed by this date.”

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