Wynne under fire over bonuses to Pan Am executives

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Ontario is paying big bonuses to Pan American Games executives, doubling the salaries of some top brass.

Fifty-three executives on the TO2015 organizing committee are expected to share in $5.7-million worth of bonuses. Some of the money will be shelled out as a reward to executives for not quitting ahead of the Games; some of it is a reward for keeping the Games within their budget.

The $2.5-billion Games, however, received a $74-million bailout from the provincial Liberal government last year, raising tough questions about whether the province set the budget artificially high so executives could meet it.

The Games, which were held this summer, also saw several cost overruns and delays, most notably for the construction of a soccer stadium in Hamilton. But the contracts were structured so that individual companies building the venues absorbed the extra costs, making it easier for TO2015 to stay within its budget.

On Wednesday, the Progressive Conservatives called on the province to freeze all bonus payments to Pan Am executives and asked the Auditor-General to conduct a value-for-money evaluation of the Games. They questioned why the province was choosing to make the payouts at a time when it is facing an $8.5-billion deficit.

"You look at these huge amounts being spent on the Pan Am Games … this is in the face of 800,000 Ontarians who don't have a family doctor. They just cut 50 residency spots. You see record wait times in long-term care," PC Leader Patrick Brown said. "It begs the question: Where are the government's priorities?"

Tory deputy leader Steve Clark said he also wanted to know how the Games could possibly be under budget when the province handed them an extra $74-million last September. At the time, the Liberals said they had to give the Games more money because TO2015 had failed to bring in as much sponsorship revenue as it was hoping, and also needed more cash to do live broadcasts of some events, expand the torch relay to more communities and build more satellite villages for athletes.

Both Pan Am chairman David Peterson, the former Liberal premier, and CEO Saad Rafi refused The Globe and Mail's interview requests Wednesday.

In a radio interview on 680 News, Mr. Peterson said the Games spent $57-million less than expected on construction, plus saved $10-million from a capital contingency fund. The Pan Am organization also spent "tens of millions" less than it budgeted for operations, he said, but final figures are not yet available.

The bonuses were written into the executives' contracts when they were hired, he said.

Mr. Peterson said big bonuses are just a fact of life. "When the president of the bank gets a bonus, do you approve of that?" he said. "When you do a good job in your company, you get a bonus – do you approve of that? It's the way the world works."

Premier Kathleen Wynne on Wednesday also defended the payouts. She said the bonuses were necessary as an incentive for executives to meet their timelines and budgets.

"If you look at multisport Games around the world, the same kinds of arrangements are in their contracts, so there is a guarantee that certain targets and certain achievements will be accomplished," she said.

But NDP Leader Andrea Horwath argued that it should not be necessary to offer bonuses just to ensure people will do their jobs properly.

"Most Ontarians go to work each and every day, earning their pay and working hard for it and expecting that that's what you're supposed to do," she said. "I don't think very many Ontarians go to work and at the end of a shift or at the end of a certain period of time get told, 'Guess what? You're getting double your pay this year.'"

The payouts come as the government is casting about for budget savings anywhere it can find them. The province is taking a tough line in labour negotiations, including with teachers, freezing the base operating budgets for hospitals and squeezing spending in most ministries.

With a report from Dakshana Bascaramurty