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The Globe and Mail

Ontario spent $6.8-million on consultants for Hydro One, beer changes

Former TD CEO Ed Clark recommended Ontario sell 60 per cent of Hydro One, with the proceeds to be used to pay for transit construction.

Tim Fraser/The Globe and Mail

The Ontario government awarded $6.8-million in contracts to consultants to advise Ed Clark and his panel on privatizing Hydro One and how to squeeze more money from the beer retailing system.

The contracts included more than $2.5-million to KPMG and nearly $1.65-million to Deloitte.

Exactly what services the companies provided in just one year – the Premier's Advisory Council on Government Assets was created in April, 2014, and reported two weeks ago – remains secret because the government says it does not release cabinet records. Nor will it explain why public servants could not help the council.

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The nearly $7-million is in contrast to the government's boast that it snagged Mr. Clark, the experienced and well-respected former CEO of Toronto Dominion Bank, for free.

Earlier this month, Mr. Clark was honoured at the Public Policy Forum Dinner in Toronto, and Premier Kathleen Wynne, the host, joked that Mr. Clark agreed to lead the council at a "salary slightly below his going rate – zero dollars a year." That elicited some laughs from the mainly Liberal crowd.

On Tuesday, the opposition was howling about the consulting fees.

NDP leader Andrea Horwath, whose team uncovered the contracts through a freedom-of-information request, demanded to know how the government could justify spending nearly $7-million on "high-priced consultants" when it says it has no money for health care, education or child care.

"They paid millions to KPMG, McKinsey, Deloitte, PricewaterhouseCoopers and a company called Feschuk.Reid, which is Paul Martin's old speech writers," Ms. Horwath said in Question Period on Tuesday. "But the Premier's office won't even tell us what work these companies did or what information they provided."

Deputy Premier Deb Matthews did not refer to the contracts in her reply to Ms. Horwath. Rather, saying that when the government was making decisions "around expanding the ownership of Hydro One, we did want to do it in a careful and thoughtful way."

She added the government wanted to protect taxpayers and ratepayers.

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Mr. Clark recommended that the province sell 60 per cent of Hydro One and that allow sales of beer in 450 grocery stores. The proceeds from Hydro One would be used to pay for transit construction.

Ms. Wynne's spokeswoman, Zita Astravas, said in an e-mail that Mr. Clark and his panel were "open and transparent about the use of third parties" and included a portion of the council's interim report from last October that said: "Our conclusions have been reviewed and validated by independent consultants."

Ms. Astravas said the "third-parties provided the Council with objective advice and expertise that helped ensure the recommendations they provided to government are evidence-based and in the best interests of Ontarians."

Progressive Conservative finance critic Vic Fedeli said he expects there could be more such contracts.

The NDP had asked in its FOI request for a list of consulting contracts related to the Clark report that included the name of each firm, the value of the contract and a description of the service. It received a chart listing the company names and a value for the contract. For example, KPMG had two listings – one for $1,135,000 and the other for $1,475,000. It would not comment on its work for the government.

Feschuk.Reid had a contract for $24,500. Scott Feschuk and Scott Reid worked for Mr. Martin when he was Liberal prime minister. Their company provides strategic communications services to public, private and not-for-profit clients, including governments of differing political stripes, Mr. Reid said in an e-mail.

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"We competed for the opportunity to work for the Assets Council and are invoicing below the maximum contract value of $24,500," he wrote.

PwC received a contract for $974,000. Former Liberal premier Dalton McGuinty is a senior adviser for PwC. The company said it could not comment. Deloitte had four contracts – $525,000, $500,000, $272,000 and $342,000. Deloitte did not return calls for comment.

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