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Ontario Health Minister Deb Matthews speaks to the media during an availability following the first session of meetings with provincial health ministers at The Royal York Hotel in Toronto on March 15, 2013.Peter Power/The Globe and Mail

Deputy Premier Deb Matthews says she did not know Ontario's high school teachers' union had $65-million in a reserve fund when the government secretly agreed to pay the union $1-million to help cover its negotiating costs.

Ms. Matthews, who is also President of the Treasury Board, oversees the province's labour negotiations.

"I can tell you that I certainly didn't know," the Deputy Premier said on Friday after The Globe and Mail revealed that the Ontario Secondary School Teachers' Federation had the money in the bank. "And the Auditor-General is going to take a look – and that's appropriate."

Asked if it was reasonable for taxpayers to give $1-million to a union that already had substantial financial reserves of its own, Ms. Matthews reiterated that she was not aware of the OSSTF's financial situation.

"I'm not going to comment. I don't know. I don't know if that fund exists. I don't know what it's for. I'm not going to comment on OSSTF financials," she said at Queen's Park.

The OSSTF's internal financial statements, obtained by The Globe, revealed that a reserve called the Member Protection Account had a balance of $65,674,933 at the end of the 2014 fiscal year, when the union began collective bargaining for a new deal with the province. The eventual deal, reached in August of this year, included a $1-million payment from the government to help offset OSSTF's costs during bargaining.

The OSSTF dipped into the Member Protection Account for numerous purposes, including to find $1.8-million for "election readiness" last year, and to finance grievances and other legal proceedings.

The Liberals have said $3.74-million in secret payments to four teachers' and support staff unions over the past seven years – including the $1-million to the OSSTF in this year's round of bargaining – was necessary because the government brought in a more complicated negotiating system that increased the unions' costs.

The government's payments to the teachers' unions have proven controversial since The Globe uncovered them last month. After initially saying the government did not ask to see the unions' receipts to verify their bargaining expenses, the Liberals said they would seek an accounting.

And on Wednesday, an all-party legislative committee unanimously voted in favour of Progressive Conservative MPP Lisa MacLeod's motion to have Auditor-General Bonnie Lysyk investigate the payments.

PC MPP Monte McNaughton said on Friday it is "highly inappropriate" for the province to pay union negotiating costs, and that he was skeptical of Ms. Matthews's assertion she did not know about the union's financial reserves. He said he hoped Ms. Lysyk could sort the matter out.

"I think the government knew. I watched the Minister dance around your question earlier," he said. "I think, again, it's why Lisa MacLeod put forward the motion to have the Auditor-General look at this so-called payback scheme, and it's something that needs to be done."

NDP MPP Taras Natyshak, a former union leader, said it is common for unions to have reserve funds and it is up to the government to ask about these financials when bargaining.

"There is certainly lots of evidence that unions hold a rainy-day fund for strikes, to support their membership in various ways," he said. "These are things that are quite common. To know what they're utilizing their funds for is up to the government to ask of those unions and to determine whether they're appropriate in the context of bargaining."

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