“The Agreement Resulting in the Resignation of The

Queen’s Park Today – Daily Report December 6, 2018

Quotation of the day

“The agreement resulting in the resignation of the Hydro One board and CEO elevated the provincial government’s political interests above the interests of other stakeholders.”

Washington state regulators turn down Hydro One’s proposed takeover of Avista because the Ontario government’s continued interference in the utility’s management “does not serve the public interest.”

Today at Queen’s Park

On the schedule The House will adjourn one week early for its winter recess — making today the final day of the fall session. MPPs are due back February 19, following the Family Day holiday.

The House will reconvene at 10:30 a.m. for question period.

Bill 57, Trust, Transparency and Accountability Act, was reported back to the House from committee Wednesday and will very likely be voted on at third reading before the House rises. The PC’s mini-budget bill requires one hour of debate before a vote can be called.

Two bills and one motion will be debated during the afternoon’s private members’ business:

● NDP MPP Wayne Gates will put forward a motion calling on the government to enhance front-line mental health services in the Niagara region by funding three 24/7 mental health and addictions drop-in centres in Niagara Falls, Welland and St. Catharines.

● NDP MPP Jill Andrew will put forward her legislation, Bill 61, Eating Disorders Awareness Week Act; and

● PC MPP Jeremy Roberts will put forward his bill, Bill 59, Caregiver Recognition Act.

Wednesday’s debates and proceedings

PC MPP Christine Hogarth introduced a private member’s bill entitled Bill 65, Protecting Our Pets Act, which would establish an advisory committee to report on the quality of care for companion animals kept for entertainment, breeding, exhibition, boarding, hire or sale.

Bill 32, Access to Natural Gas Act, continued to be debated at third reading throughout the day.

In the park

The Ontario Medical Association will lobby MPPs over lunch.

Social Services Minister Lisa MacLeod will be in the main lobby collecting donations for The Shoebox project, a charity that supports women experiencing homelessness and was co-founded by Attorney General Caroline Mulroney.

AG Report 2018: Highlights

Ontario Auditor General Bonnie Lysyk tabled her 1,128-page, two-volume annual report Wednesday, taking aim at Metrolinx, legal aid, social assistance, post-secondary tuition, the Technical Standards and Safety Authority, and the government’s hiring of consultants and advisers, among others.

Many nuggets were welcomed by the Ford administration since the AG’s report deals mostly with mismanagement under the previous Liberal regime.

Lysyk found a raft of spending and accountability woes in the province in fiscal 2017-18. Here are the highlights:

Costly consultants ● Ontario spends more to hire outside consultants when it would be cheaper to hire a full-time employee to do the job. Last year the province spent $360 million on consultants — compared to $434 million a decade ago — about 80 per cent of which was for IT consultants. According to the AG, it costs $40,000 more per year to recruit an IT consultant rather than hire a full-time employee with benefits. “It may sound counter-intuitive but hiring permanent employees can sometimes cost less than consultants,” Lysyk said.

For instance, the government hired a consultant for a 14-month contract in 2014 to develop a software app for $210,000, but the contract was extended three times over the next three years, rounding out the total bill to over $900,000. That work could have been done for 40 per cent less cash, the report notes.

The government doesn’t track spending on advisors, but Lysyk’s team estimated it costs about $4 million a year.

Metrolinx woes: Political influence over Kirby and Lawrence East GO stations ● Changing plans for transit projects and the “lack of a rigorous” planning process has resulted in $436 million in “sunk and additional costs” at Metrolinx over the past 10 years.

“After certain projects were announced or agreed on, the provincial and municipal governments changed their decisions on what to build and when to build, even though significant investments had already been made,” Lysyk said.

She cited the Scarborough subway extension (plans for which changed three times between 2011 and 2013) and the Sheppard LRT project, which is expected to be completed 10 years behind schedule.

Meanwhile, Ontario’s then-transportation minister Steven Del Duca wielded his political influence and undermined Metrolinx’s decision-making process to green-light two GO train stations at Kirby and Lawrence East that staff recommended shelving for at least 10 years. One of the stops was in Del Duca’s riding at the time.

“Metrolinx’s initial business cases concluded that the costs and disadvantages of the two stations significantly outweighed their benefits, but Metrolinx overrode that conclusion because the then Minister of Transportation and the City of Toronto has made it clear they wanted these stations,” Lysyk said.

Her audit determined Del Duca did not act in a transparent or accountable manner Last year the public accounts committee asked Lysyk to look into the GO stations following the Toronto Star’s reporting, which has been covering Del Duca’s sway over Metrolinx for over a year.

Technical Standards and Safety Authority ● The agency that oversees the safety of elevators, stuffed animals, pipelines, amusement park rides and boilers does not have consistent inspection standards, or a proper explanation for why it doesn’t inspect certain things, such as propane distributors and natural gas stations. The report found that the TSSA has “tried with little success” to get a small number of Ontario elevator maintenance companies that dominate the market to maintain “most of the province’s operating elevators” in accordance with safety laws.

Ontario Works isn’t working ● The AG found Ontario’s social assistance program isn’t helping people leave the program with a job.

Over the past five years the Ontario Works program has only helped 10 to 13 per cent of recipients transition to employment, and the number of monthly recipients jumped nearly 25 per cent over the past decade, from 202,000 in 2009 to 250,000 in 2017-18.

The average length of time people collect benefits has almost doubled in the past decade, from an average of 19 months to almost three years. Last year over 450,000 people received benefits at a nearly $3 billion cost, the AG says. Reviews of fraud and overpayments are also lagging.

The findings align with Social Services Minister Lisa MacLeod’s push for a revamped OW program. MacLeod told reporters she has met with the AG since taking office to help inform her social assistance makeover.

Legal aid ● Lysyk’s report showed that Ontario could save up to $20 million a year if there is a reduction in the number of cases it hears regarding Ontario Disability Support Program appeals and applications.

OSAP gets schooled ● The Grits’ free tuition for certain post-secondary students could cost more than expected and has not led to a significant increase in enrolment, the report says. OSAP could cost $2 billion annually by 2020-21, a 50 per cent net increase compared to fiscal 2016-17.

Twenty four percent of university students and 27 per cent more college kids got financial aid last year, but the increase in enrolment was one per cent and two per cent respectively.

“As this was the first year for the new eligibility rules, it may not yet be possible to draw long-term conclusions, but it certainly bears watching,” Lysyk said.

Darlington on-time and on-budget, but there is uncertainty in its future ● Ontario Power Generation’s $12.8 billion Darlington Nuclear Generating Station refurbishment project “remains on track to meet the cost and time estimates,” but it faces significant risks that could change that. Most of the uncertainty stems from an increase in the project’s complexity. For instance, OPG has only worked on one reactor to date and working on more than one at the same time may pose “more challenges.”

Advertising ● The Tories don’t seem keen on restoring the AG’s oversight powers over government advertising, despite promising to do so in their election platform. The changes, made under the Liberals in 2015, effectively reduced the AG’s approval of government advertising to a rubber-stamp by narrowing the scope of what constitutes a partisan ad. Since the change Lysyk has called out government ads that wouldn’t be approved under the old rubric for being too self-congratulatory or partisan. ○ Treasury Board President Peter Bethlenfalvy said the government will explore a review but wouldn’t commit to any changes. Health care ● The AG’s report shows Ontarians are waiting the longest compared to other provinces with comparable data when it comes to magnetic resonance imaging (MRI) and computed tomography (CT) scans. The number of scans being performed has gone up by 17 per cent for MRIs and 30 per cent for CTs over the past five years. ● Health Quality Ontario, which reports on the quality of provincial health care, lacks teeth because it doesn’t have the power to implement its own recommendations. ● Ontario has “consistently and significantly” overpaid for assistive devices (think: hearing aids, mobility devices and oxygen apparatuses) over the past several years, with the province getting back $10 million in overpayments for the last eight years. ● Medical care outside provincial borders is costing Ontarians, and the province should do more to let people know they are entitled to reimbursement for out-of-province emergency health care. In 2017-18, the health ministry paid $204 million for about 737,000 claims, but the province could focus more on public awareness campaigns.

U.S. regulators reject Hydro One acquisition of Avista, citing government interference

Washington state regulators put the kibosh on Hydro One’s proposed takeover of Avista Corp., a U.S.-based energy company. The Washington Utilities and Transportation Commission determined Wednesday the proposed merger “does not serve the public interest” — and pointed the finger squarely at the Ford government’s political interference. The deal was valued at $6.7 billion.

The commission turned down the acquisition proposal in part because “provincial government interference in Hydro One’s affairs ... could result in direct or indirect harm to Avista if it were acquired by Hydro One, as proposed.”

“The agreement resulting in the resignation of the Hydro One board and CEO elevated the provincial government’s political interests above the interests of other stakeholders … Avista’s customers would be no better off with this transaction than they would be without it,” the commission said referring to Premier Doug Ford’s repeated criticism of the Hydro One board

and CEO during the election campaign, which resulted in their mass resignation early in his term.

More recently, the Globe and Mail reported Ford chief of staff Dean French was trying to pressure Hydro One’s non-government appointed board members to approve a new CEO favoured by the premier’s office.

Energy Minister Greg Rickford said in a statement the province will “always stand up for the largest shareholder of Hydro One, the people of Ontario.” He said the government is confident that “renewed leadership and direction at Hydro One will make responsible business decisions that are in the best interest of their shareholders.”

Liberal finance critic Mitzie Hunter called out Ford’s reported meddling at the provincial utility as the reason behind the regulators’ decision. “The state of Washington blocked the sale of their utility to protect themselves from Doug Ford’s political interference. The fact that this could even be a factor is a disgrace.”

In its third-quarter results report last month, Hydro One warned shareholders that the provincial government might continue to intervene with the utility in ways that could be “detrimental to the interests of shareholders.”

Ex-provincial controller quit in protest over PC’s accounting

Cindy Veinot, the former provincial controller, says she quit her job in September because she did not agree with the new PC government’s accounting standards.

Veinot left her public service post September 27 after about two years, but the details behind her departure did not become public until this week at the PC-dominated select committee investigating past Liberal government finances. Veinot, and the NDP MPPs on the committee, tried several times to have Veinot testify, but the Tories blocked the requests.

In a submission to the committee, Veinot said she refused to sign off on the province’s public accounts, which claims a higher-than-expected deficit. That’s because the Tories reversed how the previous government accounted for certain pension assets and hydro debt, following its financial commission of inquiry. The result was the PCs forecasting a higher deficit, from $6.7 billion the Liberals projected to $15 billion the Tories now claim.

In her submission, Veinot disagreed with the move, saying that she agreed with the former Liberal government’s standards, as opposed to the PCs and Auditor General — who had been calling for a reversal on pension accounting since 2016.

She also shed light on her rocky relationship with AG Bonnie Lysyk, describing a 2016 meeting where she experienced “personal attacks, disparaging comments” and “threats.” That set the tone for “what I would witness during the two years I worked for the OPS,” Veinot wrote.

Asked about her dealings with Veinot Wednesday, Lysyk declined to discuss details and said she was not aware of any specific allegations.

When Lysyk testified at the committee in October, she said she was concerned her message wasn’t being properly communicated to the government through the controller. Lysyk said her points weren’t “even acknowledged as reality” and she walked out of meetings thinking, “What was that about? … It was very tense, the meetings were very intense,” she said at the time.

Veinot previously wrote the select committee and Treasury Board President Peter Bethlenfalvy to say she “took a lead role” in preparing Ontario’s consolidated financial statements and spent “several hundred hours” on two of the committee’s main concerns, the Fair Hydro Plan and pension assets.

“It is unclear to me how the committee can complete its work without meeting with the provincial controller … If the committee decides not to meet with me, I can only conclude that the government is not interested in a complete and transparent process in the execution of the committee’s mandate,” Veinot wrote.

At the time, PC MPP Ross Romano said the committee has a limited time to hear testimony.

Today’s events

December 6 at 9:30 a.m. – Toronto NDP MPP Jill Andrew will hold a press conference in the media studio to talk about her private member’s bill to establish an Eating Disorders Awareness Week.

December 6 at 9:45 a.m. – Toronto Premier Doug Ford and Toronto Mayor John Tory will meet at Queen’s Park and participate in a photo-op. It’s the pair’s first public meeting since Tory was re-elected to lead a Ford-shrunken city council in October.

December 6 at 12 p.m. – Toronto NDP Leader Andrea Horwath will participate in the Women College Hospital’s rose-laying ceremony to honour the victims of the École Polytechnique mass shooting and commemorate the National Day of Remembrance and Action on Violence Against Women.

December 6 at 2 p.m. – Toronto Federal Environment Minister Catherine McKenna will be in Toronto to meet with Environment Minister Rod Phillips and will speak to reporters following a separate Empire Club event.

December 6 at 2:15 p.m. – Toronto NDP Leader Andrea Horwath will talk to reporters about the end of the fall session.

Topics of conversation

● Netflix Canada weighed in on Ontario’s sex-ed controversy, saying students that are missing out on sexual education can now watch the entire American Pie film series on its streaming services.

● Laker Lager is hopping on the Ontario Proud brand. The Kitchener-based beer brewer is tapping into the conservative-friendly political group’s brand and using labels resembling the Ontario Proud logo. “We wanted people to know Laker is high quality, expert brewed beer that happens to be a great deal. We wanted people to know Laker is proudly brewed in Ontario,” the company said in a release. The resemblance is reportedly happenstance.

Question period

Queen’s Park Today was in the media lock-up for the Auditor General report during question period. Coverage will return tomorrow.

Queen's Park Today is written by Sabrina Nanji, reporting from the Queen's Park press gallery.