A $10 billion deficit and memories of the Spice Girls

By John Michael McGrath - Published on Oct 02, 2015
What do the Spice Girls have to do with Hydro One? Read on.

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Public Accounts tabled: $10 billion deficit

The government tabled the Public Accounts for the 2014-15 fiscal year this week, and the headlines aren’t terribly shocking: the province posted a $10.3 billion deficit. The province has been in deficit every year since the 2008 financial crisis, and the Liberals have struggled to erase Ontario’s persistent red ink.

Whether today’s announcement counts as good news or bad depends on what it’s compared to. The government news release accompanying the Public Accounts noted the deficit is $2.2 billion lower than what the government predicted just a year ago, in the 2014 budget. On the other hand, the Progressive Conservatives attacked the government, saying interest costs are now $10.6 billion annually.

For reference, the 2009 budget passed after the financial crisis confidently predicted the Liberals would have shrunk the deficit to $3.1 billion by now. Just a year later that projection was revised to $10.7 billion.

The 2015 budget reiterated the Liberals pledge to balance the budget by the 2017-18 fiscal year. The government’s sluggish progress on deficit-fighting so far has seen the province’s credit rating downgraded, most recently in July of this year. Credit ratings downgrades tend to raise the cost of provincial borrowing, but the magnitude of the cost is hotly disputed.

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$60 million loss on Ontera sale

The other headline to come out of the Public Accounts this year was the government posting a $60 million loss on the sale of Ontera, the telecommunications company owned by the Ontario Northland Transport Commission. The Liberals had originally proposed selling off all of ONTC, then partly relented when Kathleen Wynne became Premier. However, the Ontera sale still went through—something ONTC advocates said would hurt consumers in the north, and end up costing the government money.

Monday’s news suggests the government’s critics were right, with PC Finance Critic Vic Fedeli among others saying the government mismanaged the sale. The filings from Public Accounts show the government made a $52 million payment to “support the sale of Ontera” which, combined with other losses, led the government to post the large loss. Ontera itself sold for only $6 million. Minister of Northern Development and Mines Mike Gravelle told the North Bay Nugget that notwithstanding the large loss, the ongoing costs of keeping Ontera were still larger.

According to numbers provided to TVO by Gravelle’s office, Ontera’s expenses were greater than its revenues consistently since 2002, tallying up $40 million in red ink. Additionally, the province had provided $18 million in capital contributions to Ontera. Gravelle’s office says “these efforts did not significantly improve its financial position.”

Auditor General will likely audit Pan Am Games

The Legislature’s Public Accounts committee passed a motion from Leeds-Grenville MPP Steve Clark, calling on the province’s Auditor General Bonnie Lysyk to conduct a value-for-money audit of the Pan Am and Parapan Games held in Toronto this summer. Clark and other Tories believe the Games ran over budget despite government denials, given some budget estimates (like those for security costs) which grew substantially over time.

The government for its part says the Games have come in on budget, and is so confident it expects to award $5.7 million in bonuses to the executives who ran them. Those bonuses, however, won’t be part of the Auditor General’s audit.

Wynne holds meetings with Horwath, Brown, and Notley

Premier Wynne held meetings Monday with PC leader Patrick Brown and New Democrat leader Andrea Horwath. These types of meetings are semi-regular affairs at Queen’s Park, usually preceding major events like budgets, where the opposition offers their input to the government. In this case, Wynne said in a statement she was looking to reiterate the government’s agenda and hoped the opposition parties would “occasionally put aside partisanship and find areas of common ground.”

The other major meeting this week was with Alberta Premier Rachel Notley. Wynne and Notley joined forces in calling for federal infrastructure funding. They also talked about how to “reframe” the debate around the Energy East pipeline project to focus on its potential economic and environmental merits.  (The pipeline would take bitumen from Alberta to refineries in New Brunswick, via Ontario and Quebec.)

Notley and Wynne also discussed the importance of sustainable development and efforts to fight climate change. Earlier this year, Bloomberg reported Alberta was looking at Ontario’s experience shutting down coal-fired power plants as a guide for a less carbon-intense economy.

Another Hydro One motion fails, spicily

Last week the NDP got their chance at an opposition day motion to improve the oversight of Hydro One (which was defeated by the Liberal government). This week the Tories got their turn. Leader Patrick Brown presented a motion calling on the government to present all reports and financial analysis used to justify the sale of Hydro One to the House.

The non-binding motion was predictably defeated 39-51, like its NDP predecessor, but the people of Ontario did get this exchange, which sums up the frustration a lot of Tories feel about the Liberals still using the record of the Mike Harris government to defend their policies:

Todd Smith (PC, Prince Edward-Hastings): When you question the government, what do they respond with? They start telling you how terrible the government was that was in power when the Spice Girls were in the Top 40. That’s what they do.

Grant Crack (Lib, Prescott-Glengarry-Russell): Stop right now, thank you very much.

Smith: The fact that the member from Glengarry–Prescott–Russell can sing Spice Girls songs is quite remarkable and, I think, says a lot about that member as well.

Question Period stats: Hydro and Sudbury still top the list

Both the privatization of Hydro One and the ongoing scandal in Sudbury continued to lead Question Period this week. Health, issues of municipal infrastructure spending and the fight against climate change were also prominently mentioned. Here’s a list of the most popular keywords in Question Period this week:

Hydro — 110 mentions

Sudbury — 86 mentions

Health — 85 mentions

Lougheed — 62 mentions

Infrastructure — 39 mentions

Municipalities — 39 mentions

Sorbara — 32 mentions

Climate — 26 mentions

Up for debate: Bills this week

MPPs debated the following government bills this week:

Bill 9, Ending Coal for Cleaner Air Act: This bill would prohibit any electrical utility in Ontario from getting power from coal. It passed unanimously at second reading and was sent to committee for hearings.

Bill 73, Smart Growth for Our Communities Act: This bill makes several changes to the province’s land-use planning rules. TVO previously covered some of those changes here. It passed unanimously at second reading and was sent to committee for hearings.

Bill 85, Strengthening and Improving Government Act: This housekeeping bill contains a number of mostly technical changes to existing legislation. It's at the second reading stage.

Bill 112, Strengthening Consumer Protection and Electricity System Oversight Act:  This bill would increase protections for consumers from electricity and gas companies, by boosting penalties from the Ontario Energy Board for companies found to have broken pricing rules. The bill would also allow the government to expedite key energy transmission corridors. It’s at the second reading stage.

Bill 113, Police Record Checks Reform Act: This bill would create new regulations and restrictions on the disclosure of information in police background checks. In particular, the practice of disclosing information about people who were charged but never convicted would be prohibited except in very narrow cases. The bill was prompted by reporting from the Toronto Star on abuses by various police forces. It’s at the second reading stage.

Bill 115, Electoral Boundaries Act: This bill would match southern Ontario’s provincial ridings to their revised federal counterparts, while preserving the North’s 11 seats. A similar adjustment was made in 2007. It’s at second reading stage.

The following private member’s business was debated on Thursday:

Bill 121, Residential Tenancies Amendment Act: This bill from Liberal MPP Ann Hoggarth would extend the protections of Ontario’s rental tenant legislation to some people receiving rehabilitative or therapeutic services that aren’t currently covered. It carried at second reading and has been sent to committee for hearings.

Bill 124, Capping Top Public Sector Salaries Act: This bill from NDP MPP Gilles Bisson would cap the salaries for public sector employees at twice the pay of the Premier (in 2014, $208,974.) It was defeated by the government, 35-22. Interestingly, former PC leader Tim Hudak was the one non-Liberal to vote against the bill.

A motion from NDP MPP Catherine Fife calling on the government to introduce legislation to give police services more tools in the search for missing persons was endorsed by the House on a voice vote.

Queen’s Park This Week is TVO.org’s weekly roundup of key events at the Ontario Legislature. For more coverage of provincial politics, watch TVO’s archive of the most recent question periods at Queen’s Park.

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