The Liberals have made a hash of Ontario’s finances, but show trials won’t fix that

OPINION: The auditor general’s latest indictment of the government’s accounting is damning, but the province doesn’t need a commission of inquiry to solve anything — an election will do, writes John Michael McGrath
By John Michael McGrath - Published on April 27, 2018
Woman speaking, side-view.
Auditor General Bonnie Lysyk this week assessed the Liberal government’s report on Ontario’s public finances. (Darren Calabrese/CP)

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The Liberal government is required by law to issue a report on Ontario’s public finances before the June 7 election. Auditor General Bonnie Lysyk is required by law to assess whether that report constitutes a reasonable summary of the province’s books. Yesterday, Lysyk did her job — and declared that the summary the Liberals have provided is “not a reasonable and fair presentation.”

This is news, but it’s not new. The two key disagreements Lysyk has with the Liberals have been bubbling away for months. The auditor general’s office says that the government is misstating two billion-dollar items in its expenses: public pensions and the Fair Hydro Plan. The latter is a complicated bit of financial machinery whose whole purpose was to lower electricity prices in advance of the election without showing up as a deficit on the province’s books. (The Globe and Mail published an excellent analysis of the situation last week.) Lysyk says the public shouldn’t be misled and puts the financial costs of the Fair Hydro Plan on the government’s ledger.

The older disagreement has to do with what is actually, in a sense, a good-news story: two of the province’s biggest public pensions are running large surpluses, which the government is booking as revenue. Lysyk’s office says that’s shady accounting because, while there’s no actual cash flowing into the province’s bank accounts (indeed, the government would be breaking the law if it tried to deposit it there), the spreadsheet shenanigans make the province’s accounts look better than they are. The reason this has become an issue now and wasn’t highlighted as one in previous years is that the government first started booking this “revenue” (again, there’s no actual money coming in) in 2016.

Factoring in the sum of these two disagreements, Lysyk says that next year’s projected deficit of $6.7 billion should properly be $11.7 billion and that the deficit for 2020-21 should be $12.5 billion, nearly double the projected $6.5 billion.

This bad news can’t have come as much of a surprise to the Liberals; indeed, Liberal voters have surely “priced in” the allegations of financial malfeasance against the party just as surely as Progressive Conservative voters have learned to ignore the history of accusations against their leader, Doug Ford. (He has, for example, been known to trumpet politically convenient numbers that bear only passing resemblance to the facts.)

For his part, Ford on Thursday made a new promise to voters that raises at least as many questions as it answers. He said that in response to Lysyk’s new(ish) report, the Tories would form a commission of inquiry to sort out the province’s books and investigate 15 years of alleged Liberal perfidy.

But Ford had also already promised a “line by line” independent audit of the province’s books. What would an inquiry find that that wouldn’t also find? Indeed, what could it uncover that hasn’t already been highlighted by the auditor general? Even people who disagree with her work can acknowledge that Lysyk’s accounting isn’t particularly mysterious: her assessment rests on the principle that two plus two equals four, even if the government says otherwise — not the kind of thing it takes a team of forensic accountants to unearth.

Ford’s team says that the inquiry would be limited in time and scope to complement the auditor’s work. This wouldn’t be a long, sprawling affair like, say, the Gomery inquiry of the early 2000s. Unfortunately, there isn’t an obvious precedent it can point to for what it has in mind: making recommendations to the government on how clean up its own books.

Which leaves us nothing but questions: If the Tories agree with Lysyk’s recommendations, why not simply act on them? If they’re looking for independent outside advice, there’s already a national body that’s supposed to make clear decisions on public accounting, the Public Sector Accounting Board. Why not ask it to weigh in?

Which leaves the possibility that the point of this inquiry would really be to force some Liberals into a pseudo-trial and demand they confess their sins in front of TV cameras. That might make for good entertainment, but it’s not exactly a sign of high principles at work.

An independent commission is entirely unnecessary. MPPs at Queen’s Park can receive advice from industry experts in committee and question witnesses when they need to. They can even force people to testify and hold them under oath, if need be. There’s an existing standing committee at Queen’s Park dedicated to the province’s accounts — it’s called, wait for it, the Standing Committee on Public Accounts — that could do this work, or the legislature could set up a special committee to focus on the question.

There’s a tendency to assume that anything elected politicians touch is tainted, that any recommendations they produce must by definition be the result of greasy backroom deals. But that ignores the good work MPPs do — through, for example, private members’ bills and committees — which doesn’t get the attention it deserves at Queen’s Park. If politicians have made this mess of the province’s books (they have), it’s better for the public if they’re also the ones responsible for cleaning it up. If nothing else, it would show voters that such a thing is possible.

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