At noon today the Auditor General of Ontario, Bonnie Lysyck, held a press conference on her scathing report shedding light on the real cost behind the Ontario Liberal government’s Fair Hydro Plan, which gives ratepayers 25 percent off their hydro bills.
“The government’s accounting treatment creates concerns of transparency, accountability, and value for money,” said Lysyck at the start of her press conference.
She then went on to explain the report’s two recommendations to the government: that it show the true cost of the re-amortization of hydro debt by including it in the budget and consolidated financial statements and “use the least costly financing structure to fund the rate reduction.”
“Allow me to cut to the chase, the government’s [current financing] structure will hide from Ontarians the real financial impacts of its electricity rate reduction.”
According to her report the true costs of the restructuring of the debt will be $39.4 billion. This includes an unnecessary additional $4 billion that could’ve been avoided had the government borrowed the money directly. However, borrowing the money directly would mean factoring the Fair Hydro Plan into the budget, which would’ve resulted in this year’s and next year’s budgets showing deficits. This year’s budget was largely only “balanced” over the selling of assets like 30 per cent of Hyro One shares. “In other words, it’s spending more than it has coming in.”
Lysyk also revealed that the government spent at least $2 million on outside advisers to design their “complex” financing structure. Lysyk said the Ministry of Energy also didn’t hand over the emails in a “timely manner. The Wynne government then contracted a law firm law firm to go over the emails before sending them to the Auditor General’s office.
“The Ontario government has chosen to replace [Ontario accounting] standards, going so far as to create an asset, in new legislation, to avoid reporting the true costs of its policy decision on its financial statements,” said Lysyck.
“The government’s proposal to treat that loss as an asset — that’s like you treating your credit card debt as an asset in your books.”
The Liberal government in a subsequent press conference dismissed Lysyck’s harsh criticism as a “disagreement” among accountants. However, Lysyck said that she consulted with many accountants and other auditor generals in creating her report. The Liberals also argued that these accounting practices are done in other jurisdictions, but Lysyck said this is unprecedented in Canada.
Conservative Energy Critic Todd Smith responded by saying the Progressive Conservative Party of Ontario would also borrow money to give ratepayers relief, but that they “would be transparent in the way we are doing it. What the government is doing… is deceitful, it’s dishonest and it’s shady.”
“There is still time to fix it, And we’re encouraging the government to do so,” said Lysyck.
The Wynne government’s response at their own press conference made no suggestion the government would be considering the Auditor General’s two recommendations.
The Auditor General’s report from today also raises fresh questions about the Wynne government’s Fair Hydro Plan ads, which they spent $5.5 million on to air them throughout the next two years.
Treasury Board president Liz Sandals claimed the ads were necessary.
“We want to make sure that people actually know what’s going on.”