STANDING COMMITTEE ON
DE LA JUSTICE
Thursday 24 October 2013 Jeudi 24 octobre 2013
The committee met at 0834 in committee room 2.
MR. DWIGHT DUNCAN
The Vice-Chair (Mr. Phil McNeely): The Standing Committee on Justice Policy is now in session. We welcome Dwight Duncan as the witness today. The Clerk will do your affirmation.
The Clerk of the Committee (Ms. Tamara Pomanski): Do you solemnly affirm that the evidence you shall give to this committee touching the subject of the present inquiry shall be the truth, the whole truth and nothing but the truth?
Mr. Dwight Duncan: I do.
The Clerk of the Committee (Ms. Tamara Pomanski): Thank you.
The Vice-Chair (Mr. Phil McNeely): You have five minutes for an opening statement, and then the rotation will start—20 minutes, and the next rotation, 10 minutes. The NDP will start the questions. You may start your opening statement. None? Okay, the NDP may start their questions.
Mr. Peter Tabuns: Mr. Duncan, thanks for being here this morning.
The auditor has shown that decisions made by Premier Wynne and by Premier McGuinty made sure the private power companies did very well out of these cancellations and the ratepayers got stuck with the bill. Will you apologize for your part in this huge cost boondoggle for the people of Ontario?
Mr. Dwight Duncan: I regret the challenges that were faced. They reminded me, for instance, of the cost overruns at Darlington. They reminded me of the Pick A unit 4—I think it was a $1.4-billion overrun in 2002-03. That was done by a public utility that was bankrupt at the time.
I’m actually, at this stage—while we obviously regret that, all the political parties came to the same conclusion: that it was not proper to locate particularly the Oakville plant where it was located.
So I do regret—I’m like Premier McGuinty. I regret that we didn’t move sooner. I remember—you know, I had to actually present the findings of the Pick A unit 4 $1.4-billion overrun by OPG, so these projects—
The Vice-Chair (Mr. Phil McNeely): Closer to the mike, please.
Mr. Dwight Duncan: Oh, I’m sorry.
Mr. Peter Tabuns: Mr. Duncan, I appreciate that you’ve expressed regret, and I’d like to go on to my next question.
The Globe and Mail reported in August 2004 that as Minister of Energy, you had introduced a plan to rely on the private sector to build new generation in Ontario. Is that correct?
Mr. Dwight Duncan: No. It was a hybrid plan. OPG, you’ll recall, was bankrupt at the time. Their business plan had failed. We had diesel generators, one right outside the Hearst Block. They weren’t capable, and we actually introduced a hybrid model that sees OPG continuing to operate. By that time, the lease to Bruce Power had occurred. I was pleased to see, by the way, that all eight units at Bruce are running, producing 31% of the power generation, as I understand it, today. So no, that’s not accurate.
Mr. Peter Tabuns: Did you envision having the private sector build new generation in Ontario, in fact, most of the new generation in Ontario?
Mr. Dwight Duncan: Well, in fact, the private sector had been in Ontario for many years; there was a long history of private involvement. For instance, even the public utilities use private companies. So yes, we did. At the time, you’ll recall, the old Ontario Hydro had been broken up. It was effectively bankrupt. They had run Pick A unit 4—I forget. The whole Pickering unit A was supposed to be—
Mr. Peter Tabuns: Mr. Duncan, I appreciate the—
Mr. Dwight Duncan: Well, you asked me a question.
Mr. Peter Tabuns: I asked you a question, and you’re now going into OPG. I’m not particularly interested in their history.
Mr. Dwight Duncan: Well, I am. You know, I had to deal with it; you didn’t.
Mr. Peter Tabuns: You had to deal with it, but that’s not what—
Mr. Dwight Duncan: And what I’m telling you is that OPG has—
The Vice-Chair (Mr. Phil McNeely): One at a time here. Ask a question and get an answer.
Mr. Dwight Duncan: OPG has a history—
Mr. Peter Tabuns: A half-hour answer, Mr. Chair?
Mr. Dwight Duncan: Yes, well, I didn’t even take time for a statement. So OPG has a long history—
Mr. Peter Tabuns: No, you didn’t take time for a statement; now we go to questions.
Mr. Dwight Duncan: And by the way, Big Becky, for instance, another great achievement of our government—
Mr. Peter Tabuns: Mr. Duncan—
Mr. Dwight Duncan: —did not come in on time and on budget.
Mr. Peter Tabuns: Mr. Duncan, you are ragging the puck. You are eating up time.
Mr. Dwight Duncan: Listen, you asked me a question.
Mr. Peter Tabuns: I asked you a question—
Mr. Dwight Duncan: You prefaced it—I reject your premise. OPG has a history of bad management, and you want to go back strictly to that. I think there’s a role for them. Our government passed legislation—
Mr. Peter Tabuns: I don’t need you to give us a lengthy ideological explication on it.
Mr. Dwight Duncan: You called me here to answer questions; I’m answering questions.
The Vice-Chair (Mr. Phil McNeely): The witness is sworn in. You ask the questions; you have to wait for a proper answer. So continue.
Mr. Peter Tabuns: Mr. Vice-Chair, if someone uses up 20 minutes answering a question, they are frustrating the role of this committee.
The Vice-Chair (Mr. Phil McNeely): Well, you’re using your time now. Just ask the question, and we’ll proceed. We’ll try to get answers that are shortened.
Mr. Peter Tabuns: Well, our purpose is to ask questions. When people—
Mr. John Yakabuski: On a point of order—
Mr. Peter Tabuns: Just one second. When people act in a way that blocks our ability to ask questions, there’s a reason for us to speak up.
Mr. John Yakabuski: Point of order.
The Vice-Chair (Mr. Phil McNeely): Mr. Yakabuski.
Mr. John Yakabuski: Thank you very much, Chair. We agreed on this committee that we would—and I would hope that the clock would stop. Could I ask for the clock to stop?
The Vice-Chair (Mr. Phil McNeely): It’s stopped.
Mr. John Yakabuski: Thank you. We agreed on this committee that we would respect and honour the need of the witnesses to answer to questions, but it is not beyond anybody’s ability to understand when the witness is ragging the puck. It is our job as members of the committee—and we all agreed that we would give the questioners and the members of this committee also the option to say, “Thank you for that answer. I’m moving on to the next one.”
The Vice-Chair (Mr. Phil McNeely): Thank you for your submission. We’ll just proceed. We’ll try to make sure that the answers are succinct and the questions are succinct, and there’s no interruptions either way.
Proceed, Mr. Tabuns.
Mr. Peter Tabuns: On March 24, 2005, you issued a directive to the OPA to sign contracts for power generation in respect of 2,500 megawatts. The Mississauga plants were in that. You approved these plants, did you not?
Mr. Dwight Duncan: Yes.
Mr. Peter Tabuns: You did. On May 30, 2005, you announced that a contract would be signed to proceed with Greenfield South. You agreed to put this plant in this location?
Mr. Dwight Duncan: That’s correct, yes.
Mr. Peter Tabuns: On May 7 of this year, Dalton McGuinty said, “I just want to make it perfectly clear that the only reason I decided that we should be relocating the Oakville plant and ... relocating the Mississauga plant was because those plants were wrongly sited and would compromise the health and well-being of people in those communities.” Do you agree with that?
Mr. Dwight Duncan: Yes.
Mr. Peter Tabuns: The reason at the time we were told was that these plants weren’t needed, that the power was no longer necessary. Which was true?
Mr. Dwight Duncan: It is true that our government has brought on 12,000 megawatts of new generation since we took office, the largest build-out of hydro—well, of electricity generation—since, really, the building of Niagara Falls. Also, we have invested, I believe, another $8 billion in new transmission lines.
So we were faced, quite literally at that time—as I’m sure you’ll recall, because members of your caucus routinely asked questions about the fact that we were faced, particularly in the summers of 2004 and 2005, with the very real threat of rolling brownouts and blackouts because of the state of repair of our infrastructure.
I had an opportunity to look at the IESO’s most recent reports. The build-out of new supply—the downturn in the economy had an impact on demand, but they also credited the success of our—
Mr. Peter Tabuns: Mr. Duncan—
Mr. Dwight Duncan: If I can just—
Mr. Peter Tabuns: —with respect, you’re meandering when what I’ve asked you is, was the decision to close the plants for health or because the plants weren’t needed?
Mr. Dwight Duncan: There was no meandering when it came to building new power, and we had to get it online. We weren’t going to let this economy suffer because it had been neglected by all parties in this Legislature building hydro. So, with respect, at that time the new generation of power was an urgent priority of all Ontarians.
Mr. Peter Tabuns: And you contracted out the consultation and siting and got us into this problem. Is that not correct?
Mr. Dwight Duncan: No, that’s false.
Mr. Peter Tabuns: In fact, it was the private companies that decided where they were going to locate their plants. You ran into huge problems—
Mr. Dwight Duncan: You’re being completely disingenuous.
Mr. Peter Tabuns: I am not.
Mr. Dwight Duncan: You are. You wanted short answers, you’re getting them. You’re being disingenuous.
Mr. Peter Tabuns: Did you site the plants there or not?
Mr. Dwight Duncan: We couldn’t rely on OPG because of all the cost overruns. You forget Darlington. You forget Pickering. You forget every project. And I don’t say that critically—
Mr. Peter Tabuns: I don’t remember all the nuclear projects.
Mr. Dwight Duncan: —but these projects that you’ve cited—and by the way, we do use OPG, and we did use OPG, for other build-outs, but we’ve brought in other suppliers, as has virtually every jurisdiction except those jurisdictions that have pure hydro. We, by the way, through OPG, are doing Mattagami—something your government failed to do; something the Conservatives failed to do. And I think—
Mr. Peter Tabuns: Did the Premier ask—
Mr. Dwight Duncan: And OPG is doing a very good job with that.
Mr. Peter Tabuns: Did the Premier ask you for advice when he decided to cancel the Oakville plant?
Mr. Dwight Duncan: Yes.
Mr. Peter Tabuns: And what did he ask and what did you tell him?
Mr. Dwight Duncan: He basically said to me that he felt that given what had happened over the course—from the time that we had agreed to the Oakville site, given what had happened at the municipal board and elsewhere, given public reaction, given the fact that the opposition parties felt that it shouldn’t go forward, that therefore it was time that we move on with this, and I had to agree.
I remember, for instance, Mr. Hudak—I think he was at the Oakville site the day before the 2011 election. I don’t have it with me, but I read a number of comments from some of your colleagues, your candidates. There had emerged both through the legal processes and through the political processes an overwhelming consensus that this was not an appropriate site.
Mr. Peter Tabuns: So you and the Premier discussed this. Did you know how much it was going to cost?
Mr. Dwight Duncan: No, we didn’t. We’ve said that. No one did.
Mr. Peter Tabuns: Well, you were the Minister of Finance, and you went ahead with a decision that could—
Mr. Dwight Duncan: Yes, because you do—
Mr. Peter Tabuns: —be incredibly costly, that has turned out to be incredibly costly.
Mr. Dwight Duncan: You do. You do do those things. You campaigned on doing it. You didn’t know what it was going to cost. You had a responsibility too, and you failed miserably.
Mr. Peter Tabuns: Mr.—
Mr. Dwight Duncan: Listen, we all wear this, folks.
Mr. Peter Tabuns: Mr. Duncan, you do remember we opposed that Oakville plant.
Mr. Dwight Duncan: I mean, we moved on. We did what you called on us to do. There was not a firm price at the time. In fact, I had the opportunity to read the auditor’s report; she still has variance built into her estimates, which is, I think, fair. She did a very good report. She did report in her report that the $190-million figure, as it affected the treasury, was accurate.
Mr. Peter Tabuns: You know I am talking about Oakville.
Mr. Dwight Duncan: My concern as finance minister was the impact on the provincial treasury, the direct impact. It was also on ratepayers, but we couldn’t divine that, given that there was a negotiation going on. And, as I say, I noted that the auditor, to this day, is still saying that there’s a considerable variance in what the final costs will be.
Mr. Peter Tabuns: Did the Premier ask you for advice when he cancelled the Mississauga plant, and did you have numbers when you did that?
Mr. Dwight Duncan: No. I wasn’t directly—I don’t recall having a direct conversation with the Premier about that, but we did discuss it at cabinet. Again, I had heard from opposition MPPs. I had heard from government MPPs that that particular Greenfield site—in my recollection, there were a number of challenges with that, quite apart from the actual site itself and the local opposition. For instance, they weren’t meeting targets and so on in terms of development. By that time, I was no longer energy minister, but as finance minister we did discuss it. I think you have in your possession a trail of documents that indicates the sequences, the sorts of treasury board minutes and so on. But I don’t recall a specific conversation with Premier McGuinty on that issue, other than through the formal processes of cabinet.
Mr. Peter Tabuns: So you had cabinet debates about this, then.
Mr. Dwight Duncan: I don’t recall debates, per se. That was some time ago, but I’m sure the Minister of Energy and the Premier—we did discuss the issue; I wouldn’t necessarily use the term “debate.” But, again, decisions had been taken based on the advice of local council, the mayor, opposition parties, the people in the Mississauga area, our local members—
Mr. Peter Tabuns: Mr. Duncan, I actually wasn’t asking about them. I was asking about your discussions with the Premier. You’ve told us that you had discussions in cabinet about this—that’s interesting news to all of us—and you didn’t have the numbers prior to the election as to what it was going to cost if you cancelled this.
Mr. Dwight Duncan: I don’t think that should be news. I had a look at the documents that have been given to you, and all the emails, and there’s quite a bit of—that shouldn’t be newsworthy. What I would say is—
Mr. Peter Tabuns: The reporters are now informed.
Mr. Dwight Duncan: —I don’t recall all of the discussions and so on, but yes, there were discussions. I don’t recall having a specific conversation with Premier McGuinty, just one on one, about it.
Mr. Peter Tabuns: You signed off on an arbitration agreement, along with Kathleen Wynne, regarding the Oakville plant. The Auditor General wrote that “all of the provisions in the Oakville plant contract that gave the OPA opportunity to minimize damages were explicitly removed from the arbitration framework.” Why did you leave the OPA without any defences going into that arbitration?
Mr. Dwight Duncan: We were advised that this would probably be the best course of action to try to minimize the costs associated with any litigation, if that should come to be. By the way, I think that was done by walk-around. Premier Wynne, at the time, wasn’t central to these decisions. I was; Premier McGuinty was. Cabinet obviously participated in them, but oftentimes, when something needs to be done, particularly executing a legal document or so on, or executing a cabinet minute, we do what are called “walk-arounds.” At times when—
Mr. Peter Tabuns: No, I’m familiar with that.
Mr. Dwight Duncan: If I may, though, you’re trying to implicate the Premier in something she really wasn’t directly involved in. She may well have—
Mr. Peter Tabuns: She did sign off on it.
Mr. Dwight Duncan: Well, yes, and that often happens. I used to sign off on what are called—this is what I’m trying to explain to you—
Mr. Peter Tabuns: No, I understand. She has explained.
Mr. Dwight Duncan: I think you’re mischaracterizing her role in this, and I don’t think that’s fair. Oftentimes, Toronto ministers, because they’re close—when the Legislature isn’t sitting in the summertime, things need to be signed. That’s what would happen.
That being said, I’ll go back to your questions.
Mr. Peter Tabuns: Who briefed you on this cabinet minute? What did they tell you? What did you ask?
Mr. Dwight Duncan: I had multiple briefings on these things. There wasn’t a specific on this one. Obviously, we kept up to date. I don’t remember who, specifically, but again, I’ve seen the documents that have been provided to you. You have treasury board documents. You have, I think, some cabinet documents. You’ve got some emails and so on. So I was briefed on a number of occasions. This was an ongoing issue.
One of our concerns at the time, too, was that there really still was a need for new power sources in the western GTA, in terms of meeting the increasing demand in one of the fastest-growing areas of the province. We did manage to site other plants in the western GTA. We managed to site the Hearn plant. I think we did a total of 17 plants—
Mr. Peter Tabuns: Mr. Duncan, you answered my question.
Mr. Dwight Duncan: Okay. Ask another one.
Mr. Peter Tabuns: Do you accept the auditor’s report on Oakville?
Mr. Dwight Duncan: Yes.
Mr. Peter Tabuns: Why did the government lowball the cancellation of the Oakville gas plant when it made its announcement about the settlement, claiming the cost was $40 million, when there were many other costs, including the known cost of $210 million for turbines?
Mr. Dwight Duncan: No one lowballed anything. There was a great deal of uncertainty about it. I addressed the question of what the fiscal impacts were directly, which, I think the Auditor General confirmed, turned out to be a fairly accurate figure. Myself and others were very cautious at the time about the numbers we used because we didn’t know them. I think we were pretty candid in saying that these matters were subject to negotiation that were commercially sensitive, and our desire, having acknowledged that the site that we chose was not the right site and should not have gone forward; having acceded to the people of Oakville, who spoke very clearly through their member of Parliament—Kevin Flynn, for instance—and through their mayor; having listened to the arguments put forward by both opposition parties, we, in fact—
Mr. Peter Tabuns: You’ve given an answer, and you’re going over old ground again.
Mr. Dwight Duncan: Well, no, this is all old ground, with respect. You’re not even on TV anymore, for goodness’ sake. You got bumped from your own TV channel. Look—
Mr. Peter Tabuns: Mr. Duncan—
Hon. Dwight Duncan: Let me again repeat—
Mr. Peter Tabuns: You’ve gone through it already.
Mr. Dwight Duncan: Okay, go ahead. Ask another question.
Mr. Gilles Bisson: By the way, this is still live-streamed.
The Vice-Chair (Mr. Phil McNeely): One at a time.
Hon. Dwight Duncan: I’m sure all 10 people are watching it.
Mr. Peter Tabuns: Just so that you’re clear, in the statements that were made after the agreement was signed with TCE, the MOU, McGuinty said, “On the matter of cost, Speaker, it’s $40 million … we’ve nailed that down.” Kathleen Wynne, September 25, 2012: “The total … is $40 million.”
You’re saying that you knew there were a lot of other costs. You knew that there was a cost of the turbines at $210 million. Why wasn’t Premier Kathleen Wynne saying, “$40 million is part of it. There are other costs to come”—at least the cost of the turbines, $210 million?
Mr. Dwight Duncan: I recall, through various media, through Hansard and others—you’re taking, I think, some liberty in interpretation and taking them out of context.
Mr. Peter Tabuns: I think a straightforward “$40 million, Speaker, we’ve nailed that down” is pretty clear. And that’s what we—
Mr. Dwight Duncan: What’s not clear is your question and what I would call the disingenuousness of the question, the misinterpretation of statements—
Mr. Peter Tabuns: Why were you allowing your colleagues to mislead the Legislature?
Mr. Dwight Duncan: I’m sorry?
Mr. Peter Tabuns: Why were you allowing your colleagues to mislead the Legislature?
Mr. Dwight Duncan: I think you’re misleading this committee by saying that.
Mr. John Yakabuski: Chair, point of order.
The Vice-Chair (Mr. Phil McNeely): Mr. Yakabuski, point of order.
Mr. John Yakabuski: I respect the fact that Mr. Duncan is here to testify before this committee, but to challenge the integrity of members of this committee is going a bit overboard.
Mr. Bob Delaney: On the same point of order, Chair, this entire question thread contravenes the standing orders, and I think both parties ought to move on here.
Mr. Gilles Bisson: I think my learned colleague—
The Vice-Chair (Mr. Phil McNeely): You haven’t been recognized.
I think we should get away from this debate. Have we turned this off? Yes, we have. Just try to have the questions and the answers more respectful of each other.
Mr. Gilles Bisson: Point of order.
The Vice-Chair (Mr. Phil McNeely): Mr. Bisson.
Mr. Gilles Bisson: Chair, with all due respect, members of this committee have the right to ask questions; he has an obligation to answer those questions. That’s what Mr. Tabuns is doing, and I, quite frankly, think we should continue in that vein and not try to interfere in what his questions are, please.
Mr. Rick Bartolucci: Point of order.
The Vice-Chair (Mr. Phil McNeely): Mr. Bartolucci.
Mr. Rick Bartolucci: Chair, Mr. Bisson is right: Members have a right to ask questions, and the witness has a right to answer questions. But I have to be perfectly honest with you: No member has the right to suppose or surmise or form an opinion that is demeaning of any individual, whether he’s a member or a witness. I would say that’s the point of order that Mr. Delaney wants to ensure and that, Chair, you will want to ensure as we move forward. Questions, answers, name-calling—this thing will just degenerate into a disaster, because no member has a right to accuse a witness of something.
The Vice-Chair (Mr. Phil McNeely): That’s correct, and I think we went through that with the solicitor early on at another committee: that the witness is sworn, and he has to be able to answer the questions. Let’s try to make the questions better; let’s try to make the answers better.
Would you proceed then, Mr. Tabuns?
Mr. Peter Tabuns: How much time do I have left, Mr. Chair?
The Vice-Chair (Mr. Phil McNeely): Two and a half minutes.
Mr. Peter Tabuns: Great.
At the time that we were being told that the cost of cancellation was nailed down at $40 million, did you know it was a lot more than $40 million?
Mr. Dwight Duncan: I can’t agree that anyone suggested that the total cost would be $40 million. Again, you accused the former Premier and the current Premier of misleading the Legislature. First of all, it’s not parliamentary. Second of all, in my view, it’s not accurate. Third, again, you’re taking it out of context.
I did a number of interviews at the time where frankly we were accused of being too vague because we didn’t have the numbers. This was subject to a very complex, commercially sensitive negotiation. The former Premier and the current Premier have never, in my view, done what you accused them of doing. I think we all acknowledged—
Mr. Peter Tabuns: Did you know it was more than $40 million at the time?
Mr. Dwight Duncan: No, I didn’t know. We didn’t have precise numbers. What I reported publicly, if I may, was that the cost to the fiscal plan we estimated to be about $190 million. That turned out to be pretty accurate. The Auditor General affirmed that number in her report. In fact, I had to go out—because the original numbers that had been put out had omitted, I believe, a lawsuit that added an additional $10 million. But at that time, there were negotiations, and I wasn’t at the table for those negotiations. I was briefed on their progress and so on—
Mr. Peter Tabuns: Mr. Duncan, you know I am asking about Oakville and not about Mississauga.
Mr. Dwight Duncan: Yes, absolutely. But the point is that all of this, particularly Oakville, was subject to what I would call very commercially sensitive discussions. I think it’s completely unfair to characterize either of the two Premiers of doing what you accuse them of doing.
Mr. Peter Tabuns: You’re saying that you weren’t aware that there was a $210-million cost of the turbines on top of the $40 million.
Mr. Dwight Duncan: No, I didn’t say that at all. I simply said that it’s not fair or accurate for you to characterize either Premier as having misled anyone.
Mr. Peter Tabuns: I’m asking you—
Mr. Dwight Duncan: I don’t agree with you. You asked my opinion and I’m giving it to you.
The Vice-Chair (Mr. Phil McNeely): Time is up. We’ll go to the Liberals. Mr. Delaney.
Mr. Bob Delaney: Thank you very much, Chair. Good morning, Mr. Duncan. It’s good to see you back. You’re looking very well.
I want to start by talking about the genesis of this issue, which is really the events leading up to and immediately following the great blackout of 10 years ago. In 2003, as a Mississauga resident, it was the third day before we got our power back on. Something I remember hearing, and I recall even you saying to me, is how vulnerable Mississauga and Oakville were to an interruption in either power generation or especially transmission.
What I’ve heard in the last however many months and through nearly 70 witnesses is really an attempt to reinvent history. Let me just start off by asking you to set the stage by asking, what kind of a godawful mess did our government inherit in 2003 with regard to our power system?
Mr. Dwight Duncan: When we came to office, as I indicated, we did not have enough supply. The previous government had to install diesel generators, including in downtown Toronto. Successive governments—and by the way, this was successive governments, not just of one political stripe—tried to, in my view, and I said so at the time, convince Ontarians that everything was fine and that you could artificially subsidize the price of electricity and so on.
A price cap had been put on to try to hide the cost. It was paid by the taxpayer as opposed to the ratepayer. I had to remove that price cap because it was costing the treasury—I forget—about $1.5 billion every 18 months.
The public generator, OPG, was effectively bankrupt. In fact, I called on the Honourable Jake Epp, a former Conservative cabinet minister, to take over the chairmanship of that. After he did the report that outlined the—I think it was $1.4 billion in cost overruns associated with Pick A, Unit 4. As it turned out, the previous government had wanted to refurbish the two remaining Pickering assets, and they couldn’t be refurbished.
We did embark on one of the most aggressive rebuilds, or new builds, in Ontario history. The last numbers I saw—I think we’ve brought 12,000 megawatts of new generation online. A total of 19 gas plants, 17 of which—there’s one in my community, as a matter of fact, that is partially owned by OPG. Mattagami is being done by OPG. We’ve got OPG back in shape. We implemented conservation programs for the first time. Those conservation programs, according to the IESO, have been very successful.
I vividly recall—and you just go and look at the newspapers from the time. There were days where we were literally—
The Vice-Chair (Mr. Phil McNeely): I recognize Mr. Bisson. I’m sorry. I just thought this was chatter on the side. Okay.
Mr. Gilles Bisson: No, no. I was—a point of order. I just forget what the question was. There was a question at the beginning, and I’m not quite sure what he’s answering now.
The Vice-Chair (Mr. Phil McNeely): I think we’ll let the—
Mr. Bob Delaney: If I have a problem with the question, I’ll let you know.
The Vice-Chair (Mr. Phil McNeely): I don’t accept that. I think—
The Vice-Chair (Mr. Phil McNeely): Through the Chair, please.
I don’t accept that point of order. I think the question—if you were listening, you would have heard, and I think we should continue. Go ahead with the witness.
Mr. Dwight Duncan: It has everything to do with it.
Mr. Rick Bartolucci: It has everything to do with the question. The person asking the question asked for context around the decisions. He’s providing the context, period.
The Vice-Chair (Mr. Phil McNeely): I’m satisfied that the question and the answer is going well. Thank you.
Mr. Dwight Duncan: Thank you, Mr. Chair.
Mr. Gilles Bisson: Can we have Mr. Delaney repeat the question?
Mr. Bob Delaney: You can find it out on Hansard when this is done.
Mr. Duncan, please continue.
The Vice-Chair (Mr. Phil McNeely): Is it a point of order?
The Vice-Chair (Mr. Phil McNeely): We have to get the chatter down around here. Just get some order.
Mr. Gilles Bisson: I’ve asked the member to repeat what the question was—that’s all. Will Mr. Delaney repeat what the question was so we can have context to his context?
The Vice-Chair (Mr. Phil McNeely): Mr. Bisson.
Mr. Bob Delaney: Thank you, Chair. I’d like Mr. Duncan to continue to his response.
Mr. Dwight Duncan: Thank you. It lends at least some sobriety to these undertakings.
We were very close to rolling brownouts and blackouts in Ontario. That was widely reported. There were days, literally, when I got calls in the morning—I was energy minister—saying that today could be the day.
We build out gas plants quickly, because, in the range of options to deal with things in a short term, gas plants can actually be built more quickly than, for instance, a nuclear plant or a new hydroelectric installation and so on. Again, I think we’ve done 17 of these plants across—including the Hearn plant here in downtown Toronto.
Mr. Dwight Duncan: The Windsor energy centre was another one, yes.
Mr. Dwight Duncan: Oh, no. I’m sorry. You’re referring to something—I’m thinking of the new gas plant in Ojibway, which was actually an initiative of your government that I had the opportunity to sign off on.
Long story short, the situation was desperate.
Mr. Bob Delaney: Okay. In that vein, I remember speaking to you as we left for the summer in 2004. I said to you, at the time, “You’ve got to be the only person in Ontario hoping for a cold, wet summer in this year of 2004.”
Mr. Dwight Duncan: That’s true, and we didn’t have that. In fact, one of the reasons we’ve moved on the coal plants is because of the whole phenomenon of global warming and so on.
As I understand it, Nanticoke is now coming off-line. In terms of daily production, they’re still going to be there to balance what’s called the Lake Erie loop, meet our obligations through FERC to the United States and elsewhere. But it was a very real possibility, and literally there were mornings when I had calls from the IESO at the time indicating that this, in fact, could be the day. There were contingency plans laid out. So we did move very aggressively on a range of options, including conservation, nuclear refurb and renewables in order to get Ontario back to where we are at today, with a much more reliable supply of electricity.
Mr. Bob Delaney: And as you pointed out, we didn’t have those rolling brownouts and blackouts, largely because it was a cool, wet summer in 2004. In that year—
Mr. Dwight Duncan: Actually, in one summer, Bob, not to put too fine a point on it, the American authorities at FERC had to change their rules to allow more importation. It was that desperate. We were very fortunate that it didn’t happen.
Mr. Bob Delaney: We were, and we actually got a good break from the weather. I remember being on vacation and grumbling about the weather. It was cold and wet.
In that year of 2004, it was the Ministry of Energy that called for proposals for that southwest GTA area. There were two projects ultimately accepted, and those were the ones in Oakville and Mississauga. The responsibility for choosing the site of those plants was that of the promoter, correct?
Mr. Dwight Duncan: Yes, but in fairness, ultimately—I mean, there was a lot of discussion about that, not only in these two plants, which turned out to be very problematic, as you know, but on a number of the others. It’s never easy to site, whether you’re talking about a gas plant, a nuclear plant—even with windmills, there’s opposition in many communities to them. These are difficult things. It doesn’t mean you don’t do them. It doesn’t mean you don’t take a leadership position. It doesn’t mean you just simply not do anything. We didn’t have that option.
Mr. Bob Delaney: The lands chosen by Eastern Power in Mississauga and TransCanada Energy in Oakville had, however, been zoned by the municipality as industrial in Oakville and, in Mississauga, industrial/power plant. That’s correct, right?
Mr. Dwight Duncan: That is correct, yes.
Mr. Bob Delaney: And in fact, Eastern Power, on July 12, 2005, received a letter from the city of Mississauga, signed by the supervisor of zoning, that says, in part, “The lands may be used for, among other things, manufacturing or industrial undertakings, which would include the generation and distribution of electrical power”—from the city of Mississauga to Eastern Power.
So the city of Mississauga and the town of Oakville both had approved zoning that said that you could generate power on those locations—locations that were purchased legally by the proponents, correct?
Mr. Dwight Duncan: That’s my understanding, yes.
Mr. Bob Delaney: So, in essence, then, neither the ministry nor the government chose these sites. These sites were chosen by the proponents based upon zoning in the municipality.
Mr. Dwight Duncan: That’s correct, yes.
Mr. Bob Delaney: Thank you. You would have been aware, of course, that both opposition parties had also committed to cancelling the Mississauga and Oakville power plants in the 2011 election?
Mr. Dwight Duncan: That’s correct.
Mr. Bob Delaney: Do you recall, either in your capacity as Minister of Energy in the day, or as Minister of Finance, at any point either opposition party saying how much their commitment to cancelling the gas plants would cost?
Mr. Dwight Duncan: No, and in fairness to them, they couldn’t have known it because it would have been subject to what eventually we have been through, and that is a complicated negotiation. And then there are issues around what affects the fiscal plan versus what affects the rate base about the alternative. As I said, even the auditor, in her report, still has a considerable variance some two years later because of the challenge in measuring and how you report all of these things.
Mr. Bob Delaney: So once it became clear, with the availability of a transmission corridor from Bruce into the southwest GTA—for all practical purposes, Mississauga and Oakville, which is my community—and those decisions, by the way, are now and were then very popular ones within our community. We were getting numbers provided to us primarily by the Ontario Power Authority, correct?
Mr. Dwight Duncan: Yes, that’s correct. It might have been different in Mississauga than Oakville because the Power Authority was still not up and running completely at the time those things started. So there may have been a slight difference in how things unfolded on the Mississauga versus the Oakville plant.
Mr. Bob Delaney: Right, but when you quoted a number, the numbers you were quoting came from the OPA?
Mr. Dwight Duncan: Absolutely, yes.
Mr. Bob Delaney: In May 2012, when the estimates committee had passed a motion from Mr. Leone asking for all correspondence within a specific time frame, he asked it of three entities: the Minister of Energy, the Ministry of Energy and the Ontario Power Authority. At that time, in your recollection, were complex and sensitive negotiations ongoing with both companies?
Mr. Dwight Duncan: Yes.
Mr. Bob Delaney: Okay. What would have happened if, as the opposition was demanding—in our view, recklessly—commercially sensitive information had been made public prior to the negotiations being finalized?
Mr. Dwight Duncan: It would have compromised Ontario’s position and probably cost even more than this thing has cost to date.
Mr. Bob Delaney: In talking with Mr. Bentley around the disclosure of these sensitive documents, we asked him about the very difficult situation that he was in. Of course, he was able to answer not merely as a minister of the crown but as a seasoned attorney. He said, “Producing the documents and discussing our ongoing negotiations at that time would have significantly hurt our ability to limit the costs of the cancellations and negotiate a relocation and would have increased the cost to the people of Ontario. Having said that, I always intended to produce the documents. It was a question of when, not if.”
I’m wondering if perhaps you could share with this committee some of your views on the allegations made that Mr. Bentley had acted in any manner other than in the public interest.
Mr. Dwight Duncan: Mr. Bentley is, first of all, a personal friend, a man of great integrity who, in my view, served his province well. He was in a very difficult position. He was among the leads in those negotiations. He acted responsibly. We were all very much aware that not only would eventually all the details of whatever arrangement was made—but if, in fact, we couldn’t come to an agreement, there would likely be a court proceeding of some sort. He acted responsibly in his capacity as a minister, again, in a way that was designed actually to protect ratepayers, knowing full well that, as he indicated to you, all of that information would eventually become public.
Obviously, there’s a great thirst for that information, both politically and substantively. It’s fair to want to see that, no question about it. Part of the responsibility of the Legislature—not just the government but of the Legislature—is to ensure that, as we move forward on disclosure, we do it in a fashion that doesn’t compromise the interest either of taxpayers or ratepayers. The Auditor General has pointed out to this day that there’s still a variance in what those costs could be.
This is to in no way diminish the fact that this was not a good situation. It wasn’t. It was a bad choice of sites. The government agreed to it. I regret it. I know Premier McGuinty does.
It’s good that we’re having a very thorough canvass of what actually transpired. It’s important that the opposition and the public have access to all of this information so that we can avoid those things in the future. I think we all benefit from that.
I think that, moving forward, Ontario still has a lot of work to do in terms of its power grid, in terms of its electricity generation system. But I think that the disclosure around this has been timely—not as quick as some people would like. But I think the then minister acted in what I would term a very responsible fashion.
Mr. Bob Delaney: We’re having these discussions at a time when Ontario enjoys an energy surplus, not a desperate shortage, and at a time when, relative to Mississauga and Oakville, we have a new transmission corridor, and where we can look back with 20/20 hindsight and not sit, as you did, on pins and needles day to day, wondering whether or not this will be the day of the great brownout.
Mayor Burton from Oakville was here, as was Mayor McCallion. Both of them testified that their city councils didn’t agree with the siting of the plants. The MPPs opposed them; city council opposed them; Halton region opposed it; Peel region opposed it. The city of Mississauga had taken the matter to the Ontario Municipal Board and lost, because the OMB, frankly, showed them that their own city plan had zoned the area for electrical power. The town of Oakville could see the same handwriting on the wall.
Wasn’t the province the only last place that both municipalities could go to at that time and say, “Look, this has gone wrong, and you’re the only people who can stop it”?
Mr. Dwight Duncan: Yes, and frankly, I concur with what I believe Premier McGuinty testified before this committee and certainly has said publicly: that he had wished that we had moved more quickly to respond, particularly in Oakville. I think he was referring specifically, at that time, to Oakville.
I actually had a meeting with Mayor Burton not long after he became mayor, in 2004, I think, or 2005—I can’t recall—and at that time, no site had been chosen, but he was concerned about where it would go, and he was concerned about a number of factors. Mayor McCallion I met on many occasions; in fact, she had some very specific ideas of her own about where it should go and so on that evolved over time, because, you know, as time goes on, you hear from the community, you hear from people. Zoning bylaws aren’t like the Ten Commandments. They’re not cast in stone; they need to adapt over time.
I wouldn’t blame or be critical of the councils or the mayors of those municipalities for that. The opposition, hearing all of this, got on board with the notion of that, and ultimately the government did.
I concur with Premier McGuinty that we were too slow, particularly in Oakville, to respond to very legitimate concerns, I believe, and having done that, we were faced with the consequence of relocating and what those costs would be and with the fallout from that.
Mr. Bob Delaney: Isn’t it a better idea to pay money and at least get some power from it, rather than to just cancel the plant and get nothing?
Mr. Dwight Duncan: Yes, but again, we regret that this had to happen. Moreover, we were able—and, again, it wasn’t just me at the time, Bob, that was sitting on pins and needles. It was the business community, it was the employer community—it was everyone. I mean, it was a subject of great debate within the province. Everybody had their ideas about how to deal with it, and we had to move very quickly, and we did. Like I say, I think there’s 12,000 megawatts of new generation, some very robust conservation programs, another $8 billion in transmission upgrades—
The Vice-Chair (Mr. Phil McNeely): Less than one minute.
Mr. Dwight Duncan: A number of our local distribution companies have taken great steps.
Mr. Bob Delaney: Any other points you want to make in that last minute?
Mr. Dwight Duncan: No. I’m fine, thank you.
Mr. Bob Delaney: Okay. One last quick question, then. Minister Chiarelli announced that the government is implementing the 18 recommendations of a recent IESO and OPA report on energy siting. Are you familiar with them?
Mr. Dwight Duncan: Yes.
Mr. Bob Delaney: And any thoughts?
Mr. Dwight Duncan: And I think that’s absolutely the right thing to do. Hopefully, we will never be in the place we were at 10 years ago, where you literally have to rush things in order to—because, first of all, it’s difficult to rush these things. Even at the fastest time frames, it takes five years, likely, from concept to building a gas plant, 10 or 15 years on a hydroelectric installation, which is why we instituted the long-term energy planning, by the way, something, again, that we established—
The Vice-Chair (Mr. Phil McNeely): Thank you. The time is up.
We’ll go to the official opposition. Ms. MacLeod.
Ms. Lisa MacLeod: Thanks very much, Chair.
Welcome, Dwight. It’s nice to see you.
Mr. Dwight Duncan: Nice to see you, Lisa.
Ms. Lisa MacLeod: I have a couple of questions just in terms of context and timeline, if I might be able to run through the timeline and then just get a few of your comments, if you don’t mind.
So, effectively, there’s a variety of dates throughout the entire Mississauga cancellation and the Oakville cancellation, and if you don’t mind, I’d like to stick to the Oakville cancellation at the moment.
We know, given the testimony of the Deputy Minister of Energy earlier this week—he had stated that the government and certainly the Ministry of Energy, which he is part of, would have known that the costs would have exceeded $700 million for the cancellation as early as December 2011. At the same time, of course, you would have been prepping for the 2011-12 budget. You also admitted in June 2012 that there was a range of what the cancellation of the gas plants would have been. So one of my questions will be, what was that range you were looking at, given that, on December 14, 2012, you would have paid out $210 million on the turbines, according to the auditor.
Then we had the Premier in during April 2013, which is several months after that payout, and she came in here to tell us that the range was still $33 million to $40 million. So that defies, I think, any logic, given what Serge Imbrogno told us on Tuesday and certainly what we had heard from other deputants to the committee, whether that was Shelly Jamieson, Colin Andersen and others who had said that people knew that there were escalating costs. In fact, Shelly Jamieson, at the time, said that there were “buckets of costs.”
If you can help me go through that sort of time period—we had an election in October 2011; the decisions were all made prior to that. We walked through the whole process. So again, in December 2011, Serge Imbrogno says that we knew there were escalating costs. You were then preparing for the 2011-12 budget. In June 2012, you admit to the estimates committee that there is a range, so I just want to know what that range was. On December 14, 2012, you would have paid, as finance minister, $210 million on the turbines. And then Kathleen Wynne comes to committee in April 2013 and still suggests to us that it’s only a range of $33 million to $40 million.
So I’m just wondering, given that you had just said, in answer to one of my colleagues, that the OPA was giving you numbers consistently throughout the process, what about that $210 million that was paid out in December 2012? How could you lose track of that?
Mr. Dwight Duncan: I don’t think anyone lost track of it, Lisa. It’s hard for me to follow the dates and the numbers you’re using. Let me try to share with you the issues that we were wrestling with perhaps to shed some light on it.
One of the concerns you have, and I had as finance minister, is that we did not know—for instance, in the time all of this was transpiring, we didn’t know what the hit to the fiscal plan would be. We didn’t know what the direct impact would be, and we were, frankly—because these negotiations were ongoing, we didn’t know that for a couple of reasons. One, we didn’t know it because we weren’t sure what would be applied against the fiscal plan versus the rate base. So we had to actually build contingency into our planning numbers because the one thing I didn’t want to have happen was an unpleasant surprise—
Ms. Lisa MacLeod: How much was the contingency, Dwight?
Mr. Dwight Duncan: I don’t recall the figure. It was, frankly—
Ms. Lisa MacLeod: Was it $500 million or something like that?
Mr. Dwight Duncan: Yes, it was a high number, and not because it was an accurate number. It was designed that the fiscal plan as laid out—
Ms. Lisa MacLeod: And that would be for 2012?
Mr. Dwight Duncan: I can’t recall the time frames, Lisa, off the top of my head, but what—
Ms. Lisa MacLeod: Would you be able to get back to me, Dwight?
Mr. Dwight Duncan: No, I don’t have the resources. You’ll have to ask the ministry. I’m sure they can provide that for you.
Ms. Lisa MacLeod: Okay.
Mr. Dwight Duncan: But just to finish that, the costs that would directly hit the fiscal plan, from my perspective, were not known entirely, and so I needed to make sure that—because when you’re locking down budget numbers for the 2011 budget, for instance, we would have locked down the numbers probably around the beginning of February—I say probably. On the expenditure site and on the reserve side, those numbers probably would have been locked down in November or December 2011. You want to build in flexibility for unanticipated—and we didn’t know accurately. We could speculate—
Ms. Lisa MacLeod: Would that contingency—
Mr. Dwight Duncan: Pardon me?
Ms. Lisa MacLeod: Sorry, Dwight, to interrupt you. Would that contingency of about $500 million have been for those negotiations or general government contingency?
Mr. Dwight Duncan: It would have been only as they related directly to costs that would have to be borne by the provincial treasury as opposed to the rate base.
Ms. Lisa MacLeod: Okay.
Mr. Dwight Duncan: Remember, there’s—
Ms. Lisa MacLeod: Well, this is, I think, where the confusion is, actually, when you appeared before estimates. People were actually asking you about taxpaying residents rather than ratepaying—
Mr. Dwight Duncan: That’s right. That’s exactly right.
Ms. Lisa MacLeod: And I just want to say this. This is not really just directed at you; it’s directed to the whole government. I think what appeared to be duplicitous at the time was that when folks were asking about what the impact would be to the taxpayer, you actually took that to a literal meaning of just looking at the taxpayer, not including the rate base. So the semantics and the nuances, I think, were quite unfair, because we ended up at a point where this has cost significantly more than the $33 million to $40 million in sunk costs estimated by your government at the time and still today. I think it was very unfair to the people of the province, particularly those who consume power in the province.
Mr. Dwight Duncan: I’ll respond to that, because obviously I don’t agree with you.
Number one, we were very clear, through different ministers. I looked at the transcripts. The questions that I was asked in committee did relate specifically to the taxpayer. I did respond to that. But in interviews, in the House and elsewhere—and the Minister of Energy at the time who had the lead on this was very clear throughout that time that there were separate implications for the rate base.
The fact is, even on the tax base, one of the things you worry about when you go out with a number—and the opposition obviously wants to know a number—one of the things you worry about, particularly if that number appears to be moving around, particularly on something that’s complicated, you say to yourself, “Jeez, if I give them the wrong number, even if it’s accidental, even if it’s”—and if you look at the chain of emails, you’ll see those numbers did move around. If I, just to finish—
Ms. Lisa MacLeod: Could you give me a range, Dwight, of what you thought it might have been?
Mr. Dwight Duncan: I didn’t have a thought about it. It’s difficult to know what it is on the rate base, because it’s not like the fiscal plan, where it affects the current year. This is going to be spread out, as I understand it, over the life of the asset—
Ms. Lisa MacLeod: Would any of that work have been undertaken, Dwight, to look at the potential impact on the rate base? I ask you that because it seems to me that when big decisions are made—and we had a cabinet minister in the other day, one who I totally respect, Linda Jeffrey. I have a good relationship with her, I feel, so I didn’t want to be too negative toward her, but I do have a serious question. When you guys are signing off on a cabinet minute and there’s a number of $50 million in there and a cabinet minister comes to this committee and says, “Well, you know, it was only $50 million”—well, $50 million is a lot to people.
What would that impact be to the ratepayer? Would that type of undertaking—I’m asking you this as a former Minister of Finance and a former Minister of Energy. Would either of those departments have ever done an analysis similar to that? Or would it be required for us to go to the Auditor General to undertake that, given something of this magnitude—where you can effectively tell us it took between $33 million, $40 million or $50 million from the taxpayer, but you couldn’t identify what that would mean to the individual ratepayers of the province, so you didn’t want to come forward with that. Would that analysis ever have been undertaken? Could it be undertaken? Or should that be undertaken by the Auditor General?
Mr. Dwight Duncan: The government, the Ministry of Energy routinely looks at what the impact of decisions taken will have on the rate base. There’s no question about that.
Ms. Lisa MacLeod: Would that have been taken in this case, do you think, Dwight? Or would it have been taken by the Ministry of Finance or the Ministry of Energy?
Mr. Dwight Duncan: In this case, on the aspect related to the moving of the gas plant, the impact on the rate base, that would have been undertaken by both ministries. Both ministries work fairly closely together. The Ministry of Finance, for instance, has responsibility for the Ontario Electricity Financial Corp., but there would have been attempts made—and, by the way, Serge, who I know appeared before you, and others would be in a better position to give you clearer answers to that. But from my recollection of my time both as energy minister and finance minister, you do worry about what impact any decision will have on the rate base. You look at rates. You’re concerned about rates. Your party has passionately argued that our rates are too high, and we’re very cognizant of that—
Ms. Lisa MacLeod: So does my husband, once a month.
Mr. Dwight Duncan: We’re cognizant of that, and the government is cognizant of that.
Ms. Lisa MacLeod: Can I ask you another question? I’m sorry to keep interrupting you, but you’re giving me some material that I’m actually very interested in. If there is ongoing, as you say—you’re routinely looking at, to use your words, the “impact” with respect to the rate base. Would that have been undertaken in 2011 or 2012, do you think? I’m asking for your professional advice.
Mr. Dwight Duncan: With respect, yes. I’m not saying that just in regard to the gas plants; I’m saying that with respect to the whole energy supply mix. With every decision you take, you try to estimate what—and there are a number of factors that go into it. With your permission, I’ll just take you through that.
Ms. Lisa MacLeod: This is important to me, so thank you.
Mr. Dwight Duncan: The areas that the province directly impacts is on power generation and transmission—and, to a limited extent, power distribution—so you have the rate regulatory process. For instance, when OPG or Hydro One go forward with a rate application, the Minister of Energy, the Minister of Finance and the cabinet will be apprised of what they’re asking for, why they’re asking for it, and what the factors are that are leading to this. The Ministry of Energy will look at those things and they’ll look at a range of other factors to see what the impact will be on the rate base.
Finance is interested because we get a lot of money from OPG and Hydro One. They are net contributors to the province. In fact, that wasn’t the case 10 years ago—it was costing—and now it’s back because of the northern energy industrial rate. Our government chose to take some of those revenues and use them to keep the price of electricity for those northern industries—for instance, a smelter; routinely, 30% of their operating costs are electricity, versus, say, 3% or 4% at an auto factory. All those factors come into it.
To your question, the Minister of Energy, the Minister of Finance, the cabinet and the opposition look at how these things impact on the rate base. Now, we could have a huge debate about that, and the interpretation of these numbers is very complex as well. It’s always there, and in the—
Ms. Lisa MacLeod: What do you think it would be, Dwight? You’re well out of politics; you’re here today, and it’s gracious of you to come. Just out of your professional expertise, and I think it will enlighten all of us, what would your assessment be—understanding you don’t have the documents in front of you—on what the impact would be on the ratepayer?
Mr. Dwight Duncan: Of what?
Ms. Lisa MacLeod: Of the cancellation of the Oakville plant.
Mr. Dwight Duncan: I would rely more on the Auditor General’s work, because she’s had a close look at this. It is a lot of money.
Ms. Lisa MacLeod: But that work would have been done by the government, somewhere.
Mr. Dwight Duncan: Not necessarily—
Ms. Lisa MacLeod: You just said it was, though. You said you would have done the analysis, though, Dwight.
Mr. Dwight Duncan: Let’s go back to 2004-05. When you start down the path on these things, you don’t think to yourself, “Well, this thing is going to get messed up and it’s going to cost a billion dollars we didn’t expect, and therefore we’ll factor that in.” Ontario, by the way, has been quite fortunate—
Ms. Lisa MacLeod: The only problem with that, Dwight—you’ve told me while we’re having our conversation that the Ministry of Energy—that Serge Imbrogno will probably be able to give me the impact on the rate base. Serge comes back here on Tuesday and says, “In 2011, the government would have known that the cost could have exceeded up to $700 million.” You’re moving forward with a budget within the following three months—you said it was February that you started. You would have had a contingency plan for about $500 million, which is about 200 million bucks short, and you’re just getting set to pay out $210 million on December 14, 2012, for the turbines. And then Premier Wynne comes in here and still tells us that we’re only paying $33 million. You guys are all using the cover of the distinction between the rate base and the tax base, and I’m simply just asking: Why would any government make a decision that ends up costing, in taxpayer dollars, a billion bucks, at a time when we’re in deficit financing and not do an analysis? You’re telling me the analysis was done; I simply would like to have the analysis.
I’ve been sent to Queen’s Park by the people of Nepean–Carleton to fight for their interests, and I think they’re really interested to know how much their hydro bill is going to increase as a result of this. I appreciate the semantics between the taxpayer base and the ratepayer base, but I must tell you: The men and women in Manotick really don’t give a flying fattoush. They don’t care about the difference between the taxpayer and the ratepayer, because, as far as they’re concerned, their Royal Bank account doesn’t distinguish between them being a ratepayer or a taxpayer.
Mr. Dwight Duncan: Well, I do, because I can’t mislead you. I need to be honest in my approach.
Ms. Lisa MacLeod: But you did mislead us. You did mislead us, or your government has misled us.
Mr. Dwight Duncan: I appreciate what you’re saying. I get that, and I agree with you: They don’t distinguish it.
I have to be very careful, because I don’t want to mislead this committee. I don’t want to mislead the people of Ontario. What I can say is that we spent a lot of money on this. We regret that. Relative to the almost $30-billion build-out, relative to a whole bunch of other factors, this will not have a hugely measurable impact on somebody’s hydro bill. Remember, these plants will continue to generate revenue.
By the way, when I was energy minister, we were nervous about proceeding with natural gas at a time we didn’t know about fracking and shale gas, so one of the unintended pieces of good news in moving from coal to gas is the price—at the time I was energy minister, I think we estimated there was 60 years of natural gas supply left in the world. Canada was looking at ways of building liquefied natural gas ports to import liquefied natural gas from Africa and elsewhere.
But we have to be very careful and distinguish. We have to be truthful and open. I would have been very careful about any number I gave you in the past because of the uncertainty around it, and because the advice I was getting from the OPA at the time, from my officials—
Ms. Lisa MacLeod: The only thing is, Dwight, and I don’t mean to interrupt you—
Mr. Dwight Duncan: —was that we don’t know the cost.
Ms. Lisa MacLeod: —but I only have like three minutes left, according to Mr. McNeely.
Mr. Dwight Duncan: Sure, sorry.
Ms. Lisa MacLeod: I guess the problem for me comes with this: We were given estimates right up until—well, until the auditor came out—that it was going to cost $33 million to $40 million, despite even all of these folks that have appeared before this committee telling us that there were bucket loads of costs etc. Serge Imbrogno tells us, “Well, we knew it was going to be over $700 million probably in December 2011.”
You continued to use the distinction to say that the range would be $33 million to $40 million cost total, yet you were writing a cheque to pay for those turbines in December 2012, for $210 million. I guess that’s where I get concerned, and when you’re looking at your economic statement—my colleague Michael Harris had at one point asked you a question in estimates of July 2012: “You mentioned budgeting for these items. In the 2011-12 budget, it actually itemizes, for example, emergency forest firefighting at roughly $200 million, affordable housing at $60 million, and Pan Am Games investments at roughly $60 million. Don’t you think”—at the time—“a $190-million expenditure is significant? And why wasn’t it included in your estimates?” I think that’s where we get concerned.
And then, later on, in your answer to Mr. Harris—he started talking about this $1-billion figure, which the government tried consistently to debunk, and your quote was this, on July 19, 2012—understanding we now have an auditor’s report confirming the number to be $1.1 billion, you said, “That’s why comments about Oakville at $1 billion are, frankly, reckless.”
We know now the only thing that’s been reckless in this entire process has been this government’s handling of the plants, what they have told the public and what was actually happening. When you look at, I think, a range of $33 million to $40 million and then the public is actually on the hook for $1 billion, you did something that wasn’t completely honest—not just you, your entire government—during that period. What do you have to say for that?
The Vice-Chair (Mr. Phil McNeely): The time is up. I’m sorry about that.
We’ll move to the third party. Mr. Bisson.
Mr. Gilles Bisson: Thank you very much. Welcome to our committee.
Let’s go back to May 2012: The estimates committee is in session, Minister Bentley as Minister of Energy is before the committee and a request for documents is being made. In between the time of the request and him coming back to the committee at another day in order to—he comes back a day or so later and says, “No, I’m not going to provide those documents because of sub judice rules and because of confidentiality.” Was that ever discussed? From the time of the actual request for the documents to his response to this committee, did you have any discussions with Mr. Bentley about the release of those documents in that period?
Mr. Dwight Duncan: Not that I recall.
Mr. Gilles Bisson: Were there any discussions with anybody in that period?
Mr. Dwight Duncan: With me directly?
Mr. Gilles Bisson: With anybody. Was there a discussion?
Mr. Dwight Duncan: I can only speak for myself. I don’t recall having a conversation about that matter with anybody. Now, whether or not Mr. Bentley discussed it with the Premier, other ministers, I can’t speak for that. But with me, no. And I didn’t have that conversation with anyone else either.
Mr. Gilles Bisson: Okay, so then, Mr. Bentley comes to committee and then says to the committee that he’s not going to release the documents because of the sub judice rule and because of confidentiality. That was the position that he was taking. Was that his own position or was that the position of the government?
Mr. Dwight Duncan: He was the minister responsible, and as I indicated in my answer to previous questions, I remember when that happened. The opposition and the public have a legitimate right and desire to see information that you have as a government. What you have to balance that against is by—it’s not whether or not you release; eventually, this stuff will come out publicly, both through formal processes and other—
Mr. Gilles Bisson: I was asking a question. My question was, when he came back to committee and said, “I’m not releasing this information because of sub judice rules and other reasons,” he had obviously taken the decision not to release at that time. My question is, was that something he just came up with on his own, or was there a discussion with the Premier, with cabinet, with caucus or somebody in regard to that?
Mr. Dwight Duncan: I don’t recall a conversation at cabinet. I’m certain there would have been a conversation with his officials—legal advice. But I want to stress that he said at the time that he wouldn’t release the documents at the time—
Mr. Gilles Bisson: No, I understand.
Mr. Dwight Duncan: —because they could have compromised the public interest.
Mr. Gilles Bisson: I’m not even going to dispute that.
Mr. Dwight Duncan: I’m interested in that, because—
Mr. Gilles Bisson: No, I’m not disputing that.
Mr. Dwight Duncan: Okay. All right. I just want to put that on the record.
Mr. Gilles Bisson: No, no.
Mr. Dwight Duncan: Mr. Bentley—
Mr. Gilles Bisson: My question—
Mr. Dwight Duncan: —was acting in good faith—
Mr. Gilles Bisson: Let me get back to the question.
Mr. Dwight Duncan: —on behalf of the taxpayers.
Mr. Gilles Bisson: You’ve answered—
The Vice-Chair (Mr. Phil McNeely): Mr. Bisson, this is—
Mr. Gilles Bisson: No, it’s my—Chair, it’s my—
The Vice-Chair (Mr. Phil McNeely): Let him finish it.
Mr. Gilles Bisson: Chair, it is my time. I’m asking questions. I will lead the witness the way I choose. Thank you very much, sir.
The Vice-Chair (Mr. Phil McNeely): It’s very important to the witness. Let him finish the answer.
Mr. Dwight Duncan: You won’t lead this witness.
Mr. Gilles Bisson: So—well, a very big opinion of yourself.
Mr. Dwight Duncan: You won’t lead this witness. I’m going to tell the truth.
Mr. Gilles Bisson: Well, I’m not saying you’re not saying the truth, witness.
Mr. Dwight Duncan: Well, don’t try to lead me.
Mr. Gilles Bisson: What I’m asking is a question, and my question is—
The Vice-Chair (Mr. Phil McNeely): I’m asking you, Mr. Bisson, to allow that answer to be completed.
Mr. Gilles Bisson: I’m doing the questioning. When you’re in this chair, you do the questioning. Thank you.
The Vice-Chair (Mr. Phil McNeely): Yes, and because the witness is sworn, you must wait for the answer.
Mr. Gilles Bisson: So back to Mr. Duncan.
The Vice-Chair (Mr. Phil McNeely): Mr. Bisson, you’re out of order.
Mr. Gilles Bisson: No, I’m not out of order. I’m asking a question, and I would like to have the witness answer the question.
The Vice-Chair (Mr. Phil McNeely): You will not ask the question.
Mr. Gilles Bisson: What I’m saying is, I’m not disputing—
The Vice-Chair (Mr. Phil McNeely): Now, let the witness answer that question. It’ll only take a minute.
Mr. Dwight Duncan: I’ll simply conclude by saying that Mr. Bentley acted in good faith and acted to protect the interest of taxpayers and ratepayers, knowing full well that all the information would eventually be released when it wouldn’t compromise the interest of taxpayers and ratepayers.
Mr. Gilles Bisson: So back to my question. I’m not disputing what he said at committee. He said at the time that he would not release the documents. There was obviously a decision not to release documents at that time. My question to you is, was that a decision that he came up with on his own, or was that a discussion amongst cabinet or government in any way?
Mr. Dwight Duncan: There was no discussion that I recall at cabinet about that. I’m quite certain he would have had the benefit of advice from his ministry, likely the Premier’s office, likely outside counsel.
Mr. Gilles Bisson: Did Mr. Bentley at any time come to cabinet in order to update his cabinet colleagues as to where things were at with the release of documents?
Mr. Dwight Duncan: Not to my recollection.
Mr. Gilles Bisson: Well, we had a minister here the other day, the Honourable Linda Jeffrey, who said that, in fact, he did come to cabinet and he did give updates on what was going on with the release of documents.
Mr. Dwight Duncan: He certainly gave updates. Now, you asked me specifically about release of documents.
Mr. Gilles Bisson: Yes, updates.
Mr. Dwight Duncan: He certainly gave updates—no question about that. I don’t recall whether he addressed the specific issue of release of information. I simply don’t recall that.
Mr. Gilles Bisson: So you established that there were updates at cabinet.
Mr. Dwight Duncan: Oh, sure. Absolutely.
Mr. Gilles Bisson: Very good. And so the government at one point obviously made a decision that they were not going to release these documents. So now the question—
Mr. Dwight Duncan: At the time.
Mr. Gilles Bisson: At the time, and so—
Mr. Dwight Duncan: In the interest of taxpayers and ratepayers.
Mr. Gilles Bisson: Well, the interest of taxpayers—
Mr. Dwight Duncan: Well, no, that’s important.
Mr. Gilles Bisson: It’s also very important—
Mr. Dwight Duncan: I don’t agree with your characterization.
Mr. Gilles Bisson: If you’d let me finish asking the question—
Mr. Dwight Duncan: Well, let me finish answering and I’ll let you finish asking.
Mr. Gilles Bisson: —then you’d be able to answer the question. Thank you.
Mr. Dwight Duncan: Okay. You’re welcome.
Mr. Gilles Bisson: So the point is, the minister had decided not to release the documents, and my question was, was there any discussion at cabinet or within caucus in regard to the strategy around not releasing documents at that time?
Mr. Dwight Duncan: We all agreed the documents had to be released at the appropriate time, in a way that didn’t compromise the taxpayer-ratepayer interest.
Mr. Gilles Bisson: So there was some discussion in regard to how you were going to release the documents?
Mr. Dwight Duncan: I don’t recall a discussion specifically of that, but we all knew that all these documents would be public at some point—not at a time, you know, to satisfy—
Mr. Gilles Bisson: I’m not disputing that fact, Mr. Duncan.
Mr. Dwight Duncan: Well, you’re implying that.
Mr. Gilles Bisson: No, I’m not implying anything.
Mr. Dwight Duncan: Your language, your wording is implying that. I want to be very clear. Every one of us involved in these decisions knew that everything we said would be subject to public scrutiny, everything we did. Every document eventually would be released. At that point in time, frankly, this could have landed in court, and we would have had no control over anything at that point.
All I’m saying is, we knew darn well that everything about this would become public, as it should be. The only question was the timing of it, and we didn’t, at that point in time, want to compromise the interests of taxpayers and ratepayers.
Mr. Gilles Bisson: Mr. Duncan, with all due respect, I’m asking a question. I’m not even disputing the point that you’re putting forward. We can have you come back again as a witness. If you want to rag the puck today, that’s fine. We can have you come back to the committee and have more time with you, if that’s what you choose.
Mr. Dwight Duncan: Sure.
Mr. Gilles Bisson: I’m just asking you to answer the questions.
Mr. Dwight Duncan: I’d love to come back. I miss you guys.
Mr. Gilles Bisson: Well, the feeling may not be—
Mr. Dwight Duncan: I just want to say, Mr. Chair, that I did immediately accept the invitation without having to be subpoenaed. I accepted the time and came here in good faith—
Mr. Gilles Bisson: Can you tell us what you had for breakfast that morning?
Mr. Dwight Duncan: You know what? This is why this is such a kangaroo court. I mean, you are just—you have no interest in my view of actually—I thought Ms. MacLeod and I had a very good engagement on serious issues. You’re grandstanding. We’ve acknowledged regret. We’re going over the same stuff—
The Vice-Chair (Mr. Phil McNeely): Mr. Bisson, proceed with the next question.
Mr. Gilles Bisson: Thank you. I appreciate your grandstanding.
So let’s just walk to the next spot. Then there’s a decision that’s given by the Minister of Energy at the estimates committee not to release the documents at that time, and there’s a period from there to the point that a motion is moved in committee requesting the documents. So in that period, was there any discussion between Mr. Bentley, the then Minister of Energy, and yourself, cabinet or other members of government?
Mr. Dwight Duncan: There were certain—I don’t recall having a conversation directly with Mr. Bentley. We were all concerned that the public would have to get this information. We knew the public deserved the information. We wanted to ensure that it was done in a way and at a time—
Mr. Gilles Bisson: Would you—
Mr. Dwight Duncan: If I may—and in a timeline that didn’t compromise the public interest.
Mr. Gilles Bisson: I’m going to ask the question again. Was there a discussion between Mr. Bentley and other members of the government from the time he informed the committee that he would not be providing that information to the time of the motion that was moved in committee?
Mr. Dwight Duncan: I can’t speak to other members of the government. I can speak for myself. I did not have a conversation directly with him about that issue.
Mr. Gilles Bisson: So we had a rogue minister?
Mr. Dwight Duncan: No, I didn’t say that.
Mr. Gilles Bisson: Okay. That’s fair. That’s fair.
Mr. Dwight Duncan: You asked me if he had conversations with members of the government—
Mr. Gilles Bisson: You’ve answered my question. Thank you.
Mr. Dwight Duncan: I don’t know. You’d have to ask him.
Mr. Gilles Bisson: Thank you. Well, we might do that.
Mr. Dwight Duncan: Well, ask a smart question for a change. Jeez.
The Vice-Chair (Mr. Phil McNeely): One minute.
Mr. Gilles Bisson: So then, what happens at that point is that there is a point of privilege that’s raised in the House, and the point of privilege is that Mr. Bentley could not refuse to release the documents at that time; in fact, there was a request of the committee and the committee was entitled to getting those documents. So in that period from the time that Mr. Leone filed the point of privilege with the Speaker, was there any discussions within cabinet in regard to what that was all about?
Mr. Dwight Duncan: I do recall conversations, obviously, about that point of privilege.
Mr. Gilles Bisson: And was that at cabinet or just casual conversation?
Mr. Dwight Duncan: They would have been more casual conversations.
Mr. Gilles Bisson: So it was never discussed at cabinet?
Mr. Dwight Duncan: No, I didn’t say that.
Mr. Gilles Bisson: Okay.
Mr. Dwight Duncan: Don’t forget, in cabinet you have ministers-only discussions, you have a number of things. Obviously, the Speaker’s ruling, was very important. The government had to take it seriously, obviously.
Mr. Gilles Bisson: And at that time—
The Vice-Chair (Mr. Phil McNeely): Time is up. It goes to the government. Mr. Bartolucci.
Mr. Rick Bartolucci: Just before we move to Mr. Delaney, Lisa’s back, and she asked a question at the end that I thought you might want to respond to. So if you do, could you please respond to her?
Mr. Dwight Duncan: Yes. We endeavoured throughout—at committee, I was very careful, and in public, very careful to define what I felt we could reasonably define in the public sphere and not put out numbers that eventually could be shown to be very wrong, because the advice I was getting from the OPA, from my own officials at finance, was that these numbers were very much a moving target. I was very cautious about any number that I would use either for public consumption or even for our planning within the budget because of the fear of putting out wrong information. I believe that that was the right way to manage things, and it was subject, again, to auditor’s reports and everything else.
By the way, all those numbers are published. They’re published in estimates, they are published in public accounts—they are published in a range of sources. You know, you attempt to answer questions to the best of your ability, and if the advice you’re given is that it’s difficult to answer, say, a specific question about “How much does this cost?” and you really don’t know at that point, you’re wise not to, because that number will be brought back in the future if you turn out to be wrong—and candidly, we were wrong on a number of things, as is the case. That’s why I was glad that the Auditor General came in to look at this, to help give the taxpayer—and I found it interesting that even the Auditor General, here we are two years later, still had to put some caveats around this because the numbers are still very much a moving target.
Mr. Rick Bartolucci: Thanks, Dwight.
The Vice-Chair (Mr. Phil McNeely): Mr. Delaney.
Mr. Bob Delaney: Thank you very much, Chair.
I don’t have too many more points to make, Mr. Duncan. I just do, however, want to talk a little about the notion that we could have simply, as the Auditor General put it, waited it out in Oakville. As we both know, TransCanada was actively contesting the bylaws passed by the town of Oakville, and they had five appeals, both at the OMB and in Divisional Court.
Chris Breen from TransCanada was here. He testified at the committee, and he said: “We had a contractual obligation. It was very cleanly spelled out in black and white that that was our responsibility: ‘You have to go through every possible channel to deliver on your obligations in this contract.’ And we would have done that.” He further said, “TransCanada were confident that they were going to eventually get to build the project on the Ford lands,” referring to Oakville.
Ben Chin, who had formerly worked with the OPA, said much the same thing. He said that in the OPA’s view, all of the obstacles put forward by the town of Oakville could be overcome, and he said that it was just a matter of time. He went on to say: “TransCanada was very confident in their legal advice. Their legal advice looked sound to our legal team.... I think that history would show that in most cases like this, whether it’s a power plant or some other piece of vital infrastructure, there are strong arguments on the side of upholding the contract.”
We also know from Mississauga that as soon as the bylaws had been overturned—in Mississauga’s case, at the OMB—the city had to issue the building permit.
So what I’d like you to expand on is whether the province would have been taking a huge risk if it had tried to simply wait it out and the Oakville bylaws, as everyone expected, including the AG, would have been overturned. If the decision to relocate the plant had not been made until construction had started, talk about whether the costs would have been much higher.
Mr. Dwight Duncan: They likely would have been. Again, it’s difficult for me to speculate as to how much, but I would concur with that analysis. Again, it comes back to—and I concur with what Premier McGuinty said, I believe in testimony to this committee, that one of the regrets we have, among others, is that we didn’t move sooner.
Had we not done it at that point in time, I agree with you, Bob, that it didn’t look promising in terms of whether or not TransCanada would be successful legally, and that, among other things, informed the Premier’s decision to cancel the plants. Again, there was a range of things that did that. It was the constant pressure of the opposition, the community, the mayor particularly in Oakville, our local member in Oakville. It was virtually unanimous. To your point, had we waited longer—the mistake we made is that we didn’t do it sooner. Had we waited longer, it would have cost more.
Mr. Bob Delaney: Okay. Every now and then, the province’s public accounts can make for enlightening reading. Very often they are a non-prescription sedative, but there’s some really interesting nuggets of truth in them. For example, the OPA’s estimates for sunk costs for both power plants have already been accounted for and they’ve been posted publicly in the province’s public accounts.
Mr. Dwight Duncan: That’s correct.
Mr. Bob Delaney: So just to confirm with you, because this did happen on your watch, the $190 million for Mississauga was actually paid for in the 2011-12 fiscal year.
Mr. Dwight Duncan: Absolutely. It wasn’t dealt with in the year that was referred in the question from the opposition. You’re absolutely right about that, and it is a matter of public accounts.
Mr. Bob Delaney: And the $40 million for Oakville has already been paid for in the 2012-13 fiscal—
Mr. Dwight Duncan: That is correct.
Mr. Bob Delaney: That means that the cost of building and operating the new plants, like all of the other energy projects that you cited earlier, will be part of the rate base and that any future net costs accrued over the life of the relocated plants will be paid out over 20 years?
Mr. Dwight Duncan: That’s correct.
Mr. Bob Delaney: So in other words, if the actual number is somewhere in between the OPA’s forecast of $310 million and the Auditor General’s forecast of $635 million, that would be a net impact of that portion of between $15.5 million and $31 million per year for 20 years?
Mr. Dwight Duncan: That’s correct.
Mr. Bob Delaney: That would happen at roughly the same time as the savings from the renegotiation of the Samsung and numerous other agreements are also spread over the same time period, which would mean that there would be a minus $15 million to $31 million offset against a plus approximately $280 million?
Mr. Dwight Duncan: Yes. In general terms, yes. I mean, at the end of the day, we all regret this. There was ratepayer and taxpayer money spent that didn’t have to be spent. Unfortunately, it happened. I think the characterization that this is going to have a horrendous impact or the implication on electricity bills, to your point, it works out to—and again, I’d have to rely on the Auditor General or someone else. You folks may want to look at that. In terms of its impact on someone’s rate bill, you know, $30 million, $50 million a year on a multi-billion system is not going to be as evident as is implied in the way this has been approached.
That being said, clearly this is not something that any of us is happy about. As Premier McGuinty said, I regret that we didn’t move sooner. I am very proud of the fact that we’ve brought 12,000 megawatts of power on, that our system is considered reliable, that we are virtually out of coal. I do regret that we weren’t able to do it in the time frame we originally wanted to, but we’ve done it. I remember, 10 years ago, people in this room and others saying, “You’re crazy. Stick with coal.” Now every other jurisdiction except those that actually produce coal, which we don’t, are moving in exactly the same direction Ontario has. I’m proud of the fact we have a long-term planning system in place, because it takes—
The Vice-Chair (Mr. Phil McNeely): One minute left.
Mr. Dwight Duncan: —five to 10 years to build a plant. When the old Ontario Hydro was broken up, we didn’t even have the ability to enter into agreements. There was no planning process left in the system. We had a spot market but no future market. But you regret these things. You do your best to be timely with information and honest with information. That may trouble some people, that you have to parse your words, you have to be very careful, but I much prefer to err on the side of caution in those things.
I’m glad to have the opportunity to be here today with you. It’s a great opportunity. I was surprised, frankly, you didn’t call me sooner. You must have been way down the list.
Mr. Dwight Duncan: And I miss all of you, by the way. I see these—
Mr. Bob Delaney: Before the last of the sand has run out of the hourglass, I just want to get on the record, thank you, Minister Duncan. You left the system better than you found it.
The Vice-Chair (Mr. Phil McNeely): Time is up. We will now go to the official opposition. Mr. Yakabuski.
Mr. John Yakabuski: Thank you very much.
I appreciate you coming in this morning, Dwight. I just want to go back to a little bit about—
Mr. Dwight Duncan: John, just one second. All joking aside, how much time do we have left? I’m sorry.
Mr. John Yakabuski: Ten minutes.
Mr. Dwight Duncan: Ten, okay. Jeez, I couldn’t handle another hour.
Mr. John Yakabuski: Mr. Delaney’s assertion about—you know, the spin that the government wants to be putting on this issue today, particularly since the Auditor General’s report, is, “Oh, when we amortize this over X number of years, it’s just not that big a deal and somehow we should just be forgiven for this.” If somebody robbed $1 million, just $1 million, from the Royal Bank, and they had a million depositors, the impact to each depositor would only be a dollar, but I hardly think anybody would be pinning a medal on the chest of that robber, which is what Mr. Delaney seems to be wanting to do to the government.
Mr. Bob Delaney: On a point of order, Chair: As recently as yesterday in the House, the Speaker cautioned members against this particular line of discussion and—
Mr. John Yakabuski: We’re not in the House, and I have the right to ask the questions.
Mr. Bob Delaney: The conduct in the House is the same as that here in the committee.
Mr. John Yakabuski: Please—
Mr. Bob Delaney: You’re governed by the same standing orders, Mr. Yakabuski. I’d like you to just clean it up a bit.
The Vice-Chair (Mr. Phil McNeely): Thank you, Mr. Delaney.
Mr. John Yakabuski: Chair, was my clock running?
The Vice-Chair (Mr. Phil McNeely): I agree that their line of questioning was not proper. If you could just change it a bit, I think it would—
Mr. John Yakabuski: It was an assertion. Chair, please stop the clock, and I would like to settle this, please.
How am I prohibited from asking a question that compares what Mr. Delaney was saying about the government’s spin on the cancellation and amortizing that to what would be something the public views as equally wrong?
The Vice-Chair (Mr. Phil McNeely): So just go over the question. The question as you have phrased it now, it’s proper. Just make sure that you don’t go in the wrong direction with your question.
Mr. John Yakabuski: Well, I’m going to move on, because Mr. Duncan, I’m sure, has other obligations as well.
So I want to go back a little bit to what you were talking about in the first part of Mr. Delaney’s questioning, talking about the decision in 2010 to cancel Oakville and how you just felt it had to be the right decision at the time. The decision and the contract to build Oakville was only signed one year earlier. The world did not change that much. The circumstances in Oakville didn’t change very much from 2009 to 2010. The recession had already impacted. Everything had already taken place. The decision was made, as you said at estimates itself, about cancelling the Mississauga plant, by the political operatives.
So why do you defend the decision at the time in 2010? The same circumstances existed in 2009. Why would the decision not have been made earlier?
Mr. Dwight Duncan: First of all, as Minister of Finance/Deputy Premier—both Premier McGuinty and I have taken responsibility for the decisions that were made. It was not political advisers, it was not backroom—do we get advice? We sure do. We get advice from you all the time, every day in the House, and constantly—
Mr. John Yakabuski: You never take it.
Mr. Dwight Duncan: Oh, that’s not true at all. That’s not true at all.
The Premier and I have both indicated we take full responsibility. And by the way, a lot of those people who have appeared before you are outstanding public servants, people of great integrity, who did their best, sometimes in difficult circumstances.
Mr. John Yakabuski: Okay, thank you.
Mr. Dwight Duncan: So I didn’t quite understand the question.
Mr. John Yakabuski: Well, I’m curious as to why—
Mr. Dwight Duncan: Things do change quickly; they do in this business. You know that.
Mr. John Yakabuski: Well, they didn’t change that dramatically—
Mr. Dwight Duncan: Well, they did. I don’t agree with you.
Mr. John Yakabuski: —and the records actually can show that.
Mr. Dwight Duncan: And, by the way, it didn’t start in 2009; it started in 2004. We had a lovely chat about that earlier today.
Mr. John Yakabuski: But you signed the contract in 2009, Dwight.
Mr. Dwight Duncan: Absolutely, but you know what?
Mr. John Yakabuski: The contract was signed in 2009. I’ve got my answer. Thank you, Chair.
Mr. Dwight Duncan: We actually began the process back in 2004-05.
Mr. John Yakabuski: I’m going to move on.
Mr. Dwight Duncan: Sorry. I didn’t mean to take your time.
Mr. John Yakabuski: In the questioning by Mr. Tabuns of the NDP, he raised the point about how you sold away the rights—or gave away the rights—in the arbitration decision. Basically, you sold all your trump cards, gave away all your trump cards, and the auditor cited that in her report. You, by the way, have supported the report and you’ve said it’s a good report; I’ll paraphrase you. When he asked you and you were talking about it, you said, “We were advised that that was the right thing to do,” but you never did—you talked in all kinds of circles about who might have given that advice, but this advice has led to possibly tens, if not hundreds of millions of dollars in additional costs because of the contract and the settlement and how it has been structured with TCE. This is a paramount issue with the people of Ontario. Where did you get the advice to give away your rights that would have been part of the original contract in the arbitration, specifically?
Mr. Dwight Duncan: As I said, I welcome the auditor’s report. Auditors’ reports are always important. They’re always worth reading. You try to respond to the Auditor General’s recommendations.
Mr. John Yakabuski: You said you got advice. Please tell us where you got that advice. Who gave you that advice?
Mr. Dwight Duncan: Well, we have Cabinet Office, we have the Ministry of Energy, the Ontario Electricity Financial Corp. We have senior officials at the Ministry of Finance—
Mr. John Yakabuski: So they all said the same thing? Just a minute. Everybody said the same thing? No, something triggered you to make a decision—
Mr. Dwight Duncan: No, we did. We made—
Mr. John Yakabuski: —to give away your rights. Who was the person who gave you that key piece of advice?
The Vice-Chair (Mr. Phil McNeely): You’ve asked a question; let the witness answer.
Mr. John Yakabuski: He’s not answering the question.
Mr. Dwight Duncan: Let me restate—
Mr. John Yakabuski: I’m asking for a specific.
Mr. Dwight Duncan: Those decisions were taken by Premier McGuinty and myself and the Minister of Energy, period, full stop. We get it—
Mr. John Yakabuski: Okay, so you didn’t get advice.
Mr. Dwight Duncan: We did get advice. We had a lot of advice. Some of it was paid for. We had outside legal advice.
Mr. John Yakabuski: Oh, well, then you’d know who those people are. Can you give us those names?
Mr. Dwight Duncan: I don’t remember their names, but it’s all in the public record. You can go and get that. By the way, I wasn’t part of the bargaining team, so I wasn’t in those meetings on an ongoing basis, nor, to my recollection, was the Premier, although obviously we were kept up to date. So yes, those were our decisions.
Mr. John Yakabuski: In another part of your testimony or your answers earlier talking about the OPA and how you rely on the OPA for the numbers—are you indicating that the OPA is a trusted source that you rely on heavily and generally accept their advice?
Mr. Dwight Duncan: Someday, perhaps, you’ll be a minister.
Mr. John Yakabuski: Only if I get ordained.
Mr. Dwight Duncan: I certainly hope not.
Mr. John Yakabuski: Thanks for your good wishes.
Mr. Dwight Duncan: One of the reasons you’re there, and the wonderful thing about our public service, whether you’re talking about the OPA or whether you’re talking about the Ontario public service, is that they do give you advice, but at the end of the day, you, as the politician or the leader or the elected official, can accept or reject it.
Mr. John Yakabuski: So—
Mr. Dwight Duncan: By the way—if I may, to conclude—I have a great deal of respect for people like Colin Andersen and others. Colin was my deputy minister at finance. I’ve had the opportunity to work with him.
Mr. John Yakabuski: I’m aware of that.
Mr. Dwight Duncan: Do they always give the right advice? Well, that’s a matter of opinion. Do they have integrity? Do they give the best advice they can to the government, and are they as informed as they can be? Yes. You, as the government, have the right to accept or reject that advice, and you’re the one who has to go and be held accountable to the Legislature and then, ultimately, the people of Ontario.
Mr. John Yakabuski: We understand that. Thank you very much.
The OPA—clearly, in the auditor’s report, she indicated that it was not their choice. It would have not been their decision. They would not have made the decision, if it was up to them, to relocate this plant to Napanee. What we’ve seen in testimony from the Auditor General, under questioning by Mr. Fedeli, who was here earlier as our critic of energy—
Mr. Dwight Duncan: I wore a yellow tie thinking he’d be here today.
Mr. John Yakabuski: —and now our critic of finance, she indicated clearly that the numbers that they’ve come up with, the additional costs because of the decision to relocate to Napanee, is $513 million. That decision, then, has to sit solely on the shoulders of the government, not the OPA, because the OPA clearly didn’t like the idea of moving that plant way up the line to Napanee. That is an issue that the taxpayers ultimately will decide how well the government did on that. Would you not agree?
Mr. Dwight Duncan: Absolutely.
Mr. John Yakabuski: You were not there—actually, you would have been in the cabinet until such time as your resignation; that decision was made. Cabinet would have had to have been aware of that. Cabinet would have had to have supported the decision to move to Napanee, knowing the additional costs—and you as a former Minister of Energy would have understood completely the issues of transmission and gas transportation and all of those kinds of things. How could you have supported that decision knowing that it would cost an additional $513 million to the rate base?
The Vice-Chair (Mr. Phil McNeely): You have one minute.
Mr. Dwight Duncan: I guess the question is, had we not made the moves we made, what would the cost to the economy be of the dilapidated, unreliable system that we inherited—
Mr. John Yakabuski: No, Dwight, I think that’s—now you’re going down roads—
Mr. Dwight Duncan: You’re reviewing—
Mr. John Yakabuski: Why would you—seriously, Dwight—
Mr. Dwight Duncan: Listen, I’m not disputing anything the auditor said. I acknowledge what the auditor said. I acknowledge the auditor’s report.
Mr. John Yakabuski: You’re hypothesizing. This was a decision that you were actually part of.
Mr. Dwight Duncan: Yes.
Mr. John Yakabuski: It’s $513 million. How can you defend it knowing that Napanee—the plant at Bath barely runs as it is. You’re going to be building a gas plant that, based on the current needs of Ontario, is highly unlikely to be used very often, yet it’s still going to be a $513-million cost.
Mr. Dwight Duncan: That plant will be used a lot over the next 20 years, and I would not for a minute underestimate—
Mr. John Yakabuski: Well, if the right government brings back industry—
Mr. Dwight Duncan: I would not, if I were you, underestimate the future challenges, because this economy is coming back. Under the leadership of Premier Wynne, I am confident that Ontario will continue to grow. I’m delighted for the region of Napanee. I think there will probably be 70 to 80 people who work in that plant. I know—
The Vice-Chair (Mr. Phil McNeely): Time is up.
Mr. John Yakabuski: And at times, I miss you too, Dwight.
The Vice-Chair (Mr. Phil McNeely): Thank you to Mr. Duncan for being here today. You may now leave.
The Vice-Chair (Mr. Phil McNeely): We will go ahead with the report on the subcommittee business. Mr. Delaney.
Mr. Bob Delaney: Your subcommittee on committee business met on Tuesday, October 22, 2013, to consider the method of proceeding on the orders of the house dated February 20, 2013, and March 5, 2013, and recommends the following:
Ontario Power Authority
(1) That with respect to the committee’s May 14, 2013, motion directed towards the Ontario Power Authority:
(a) That the confidential documents received from the Ontario Power Authority not form part of the committee’s public record.
(b) That the Clerk of the Committee retains the confidential documents for the duration of the committee’s mandate. Upon completion of the committee’s mandate or dissolution of Parliament, whichever comes first, the Clerk of the Committee shall return the confidential documents to the Ontario Power Authority.
(2) That with respect to the committee’s August 27, 2013, motion directed towards the Ontario Power Authority:
(a) That the confidential documents received and future documents the committee will receive from the Ontario Power Authority in response to the motion not form part of the committee’s public record.
(b) That the Clerk of the Committee retains the confidential documents for the duration of the committee’s mandate. Upon completion of the committee’s mandate or dissolution of Parliament, whichever comes first, the Clerk of the Committee shall return the confidential documents to the Ontario Power Authority.
Ministry of Finance
(3) Subject to paragraph 4, the Clerk of the Committee return the confidential documents received from the Ministry of Finance on September 10, 2013, regarding the committee’s May 7, 2013, motion and request that the Ministry of Finance do the following:
(a) Redact all personal and personnel information;
(b) Redact all information related to Cliffs Resources—Ring of Fire;
(c) Redact all information related to Cisco Systems; and
(d) Resubmit the redacted documents to the committee.
(4) That the confidential documents related to the Green Energy Investment Agreement (Samsung) and the Ford Oakville plant form part of the committee’s public record unless there remain contractual or unresolved issues regarding these transactions. If the Clerk of the Committee is informed by the Ministry of Finance that there remain contractual or unresolved issues regarding the Green Energy Investment Agreement (Samsung) or the Ford Oakville plant, the Clerk of the Committee will invite the Ministry of Finance to attend an in camera meeting of the subcommittee to discuss these issues.
(5) That the redacted documents received from Cabinet Office on October 3, 2013, regarding the committee’s April 23 and May 7, 2013, motions form part of the committee’s public record.
(6) That the Clerk of the Committee retains the unredacted confidential documents received from Cabinet Office on May 7 and May 21, 2013, for the duration of the committee’s mandate and that these documents not form part of the committee’s public record. That upon completion of the committee’s mandate or dissolution of Parliament, whichever comes first, the Clerk of the Committee shall return the confidential documents to Cabinet Office.
Ministry of Government Services
(7) That the redacted documents received from the Ministry of Government Services on October 4, 2013, regarding the committee’s June 25, 2013, motion form part of the committee’s public record.
(8) That the Clerk of the Committee retains the unredacted confidential documents received from the Ministry of Government Services on August 15, 2013, for the duration of the committee’s mandate and that these documents not form part of the committee’s public record. That upon completion of the committee’s mandate or dissolution of Parliament, whichever comes first, the Clerk of the Committee shall return the confidential documents to the Ministry of Government Services.
Summary of testimony
(9) That the research officer and the table research clerk provide a summary of testimony of witnesses from May 2, 2013, to October 10, 2013, by Tuesday, December 10, 2013.
(10) That the summary of testimony be broken down by witnesses, as follows:
(a) summary of testimony respecting the tendering, planning, commissioning, cancellation and relocation of the Mississauga and/or Oakville gas plants, and
(b) a summary of testimony respecting the Speaker’s finding of a prima facie case of privilege.
I move that the subcommittee report be adopted.
The Vice-Chair (Mr. Phil McNeely): Discussion? Mr. Bisson.
Mr. Gilles Bisson: A question to the Clerk: I thought part of the discussion that was supposed to happen and that doesn’t seem to be in this document is that the redacted documents that you’re holding secure for the period of this committee doing its work—that once the committee looks at a document and sees something redacted, that if you’re suspicious that the redaction, in fact, is hiding information we may want to see that is actually not confidential or not commercially sensitive, we’d be allowed to go back and look at the unredacted—
Mr. John Yakabuski: The original.
Mr. Gilles Bisson: The original document. The unredacted.
Mr. Bob Delaney: That’s why the Clerk retains—
Mr. Gilles Bisson: Mr. Delaney, I’m asking the Clerk.
The Clerk of the Committee (Ms. Tamara Pomanski): Each caucus has the documents, the confidential, so you can look at them. I’m retaining them, and if you need them, you can contact me. I’m keeping them in my office. Each caucus has a copy of the confidential anyway. I’m keeping them, and then they will be returned back after an election call or the mandate is done.
Mr. Gilles Bisson: My question is—back to my original point—that in looking at the redacted documents, we have an ability to unredact a document if we so choose. That’s the point that I’m trying to get at.
The Clerk of the Committee (Ms. Tamara Pomanski): We’ve already received the unredacted, and then we’ve received redacted. We have both.
Mr. Gilles Bisson: I understand that. That’s not my point. My point is, the public record is going to have the redacted documents.
The Clerk of the Committee (Ms. Tamara Pomanski): Exactly.
Mr. Gilles Bisson: My point is that if a committee member of whatever side, government or opposition, says, “Hmm. In looking at this, this should not have been redacted,” the committee reserves the right to unredact those parts of the document that they think should not have been redacted in the first place.
The way that this motion reads right now, my question to you is—if such a thing was to come up, the committee would have the ability to unredact that document if it was not properly redacted in the first place?
The Clerk of the Committee (Ms. Tamara Pomanski): You’ve already received the redacted ones. You’ve looked at it. We still have them confidential, so you can move another motion or a subcommittee report saying that you wanted those unredacted ones—
Mr. Gilles Bisson: Unredacted.
The Clerk of the Committee (Ms. Tamara Pomanski): Unredacted.
Mr. Gilles Bisson: The redacted ones—because my point here is this: There may be some legitimate reasons why some of this information we don’t want released to the public if it’s not related to our work. We get that. And if there’s personal, confidential information, like somebody’s bank account number or something—I’m just making it up, but whatever it might be—we probably don’t want to have that kind of information out there.
My point is, we’re relying on the redaction services of the people who gave us the documents, and what I want to put on the record and be really clear about is that if we’re looking at—because I don’t have the unredacted copy. I know our caucus has a copy, but I don’t. I’m relying on the redacted copies because I don’t want to be—the problem we have is this: If you release what is redacted—if a member of this committee was to release information that has been redacted, and for some reason it causes somebody harm, we could be in a position of finding ourselves in a position of contempt. So I just want to be very clear that, if I am reading a redacted version, because that’s the only version that I’m going to have as a committee member at this point—I don’t want to look at the unredacted, for that reason. If I’m looking at the redacted version, and all of a sudden I go, “Holy jeez. There are three pages here redacted. I think this is a bit much,” we need to have the ability to go back and verify the redaction.
What I want to know is, if we go back and verify the redaction, that in fact we are in a position to unredact it. Because I’m relying on the redaction. We’ve all done FOIs before—
The Clerk of the Committee (Ms. Tamara Pomanski): That’s up to the committee to move. If they want to do something else, that’s up to the committee. As of right now, one per caucus has confidential documents as well as the redacted, and they’ve been able to compare. That’s what the subcommittee agreed to.
Mr. Peter Sibenik: Mr. Bisson, passage of the motion will not prevent the committee from subsequently dealing with issues that you raise.
Mr. Gilles Bisson: I understand that, but what I’m trying to do is, I’m cautioning members that what is redacted—if we release it, we’re in trouble. So I just want to be clear that if you’re reading the redacted version and you want to see something that you think shouldn’t have been redacted, in fact you have the opportunity to undo it. I just wanted, for the record, to clarify that that’s the case.
I’ve got a couple of other questions. If somebody wants to go first—
Mr. Victor Fedeli: Am I allowed to speak?
The Clerk of the Committee (Ms. Tamara Pomanski): Yes, you are allowed to speak.
The Vice-Chair (Mr. Phil McNeely): You are. Mr. Fedeli.
Mr. Victor Fedeli: Thank you, Chair. Item number (4), the confidential documents related to the GEIA: If they form part of the public record, when? How do you make it form part of the public record if you still have the capacity to go back and ask the—
The Clerk of the Committee (Ms. Tamara Pomanski): So what I would do is, I would send a letter, with a copy of the subcommittee report, to the Ministry of Finance, asking for clarification on the status of Samsung and Ford. If they were to respond and say that the issues are resolved, then I would request for them just to redact everything in number (3) and then that would be public. But I would need the direction from the Ministry of Finance. If the Ministry of Finance comes back to me and says that these negotiations are still not fully resolved, then I will schedule a subcommittee meeting, we can discuss it, and then we can move forward on how to deal with the rest of these documents, after they are—
Mr. Victor Fedeli: I read the documents again yesterday, from top to bottom. My opinion is only one opinion—it wasn’t profound. It’s only one opinion, but in my opinion, everything in there is satisfied.
But I agree with the writing of this. There’s a sentence—maybe we’ll do it as an amendment. Let me just read the one sentence, then.
Mr. Gilles Bisson: Which part?
Mr. Victor Fedeli: The bottom of number (4). I would add, “However, all undisputed Samsung and Ford documents be released immediately.” What I’m saying is, if they say there are still unresolved issues, they shouldn’t hold the entire two-inch-thick file if there are only one or two pages. That kind of thing is what I’m suggesting.
Mr. Bob Delaney: That is, in fact, the intent.
Mr. Victor Fedeli: It is understood to be intended?
Mr. Bob Delaney: It is understood to be the intent.
The Clerk of the Committee (Ms. Tamara Pomanski): Sorry. I can add that. “However, all undisputed”—
Mr. Victor Fedeli: —“Samsung and Ford documents be released immediately.” I understand it’s the intent—
Mr. Bob Delaney: All they asked for is, “Can we just do our due diligence on this?” and I said, “Fine.”
Mr. Victor Fedeli: Yes, but if they say, “Yes, we have issues”—
Mr. Bob Delaney: And therefore you can’t release anything? No. That’s off.
Mr. Victor Fedeli: —it may be an issue with four pages out of 400.
Mr. Bob Delaney: No, no.
Mr. Victor Fedeli: That’s the only point I’d make.
Mr. Bob Delaney: Yes. We get that.
Mr. Victor Fedeli: So if we could have that—I don’t know if you want to just include it or have it as an amendment, but that’s the only thing that I would offer.
Mr. Bob Delaney: If there’s any problem with that, I’m going to be voting with you on it, so don’t worry about that. Because that was the intent of it.
Mr. Victor Fedeli: Yes, I appreciate that.
The Clerk of the Committee (Ms. Tamara Pomanski): So what we could do is just put at the end of number (4), “However, all undisputed Samsung and Ford documents be released immediately.”
Mr. Victor Fedeli: Sure, if everybody’s okay with that. That’s the only thought I had, just because I missed the committee.
The Vice-Chair (Mr. Phil McNeely): Any more discussion on the amendment, first of all?
Mr. Gilles Bisson: I should know the answer to this question, but I’ve never seen the unredacted versions of these documents. That’s why I’m asking the question. I take it the answer is yes, but I just want to verify.
Mr. John Yakabuski: Mr. Tabuns has them.
Mr. Gilles Bisson: He does, but I have not—
The Clerk of the Committee (Ms. Tamara Pomanski): What we need is to deal with the amendment right now—the subamendment.
Mr. Gilles Bisson: Yes, we’re on a subamendment. That’s right. Sorry.
The Vice-Chair (Mr. Phil McNeely): So we need to deal with the amendment first. Any more discussion on the amendment?
Mr. Bob Delaney: Please read the amendment just one more time.
The Clerk of the Committee (Ms. Tamara Pomanski): I’ll read it. At the end of number 4, after “these issues”: “However, all undisputed Samsung and Ford documents be released immediately.”
The Vice-Chair (Mr. Phil McNeely): All in favour of the amendment? Thank you.
Now we’ll deal with the report. Any other discussion on the report?
Mr. Gilles Bisson: I just have one last question again for the record. Because I have not seen the unredacted versions, I just want to make sure that the matters that are raised under Ontario Power Authority, Ministry of Finance, cabinet documents and Ministry of Government Services—those original documents are currently with Mr. Tabuns?
The Clerk of the Committee (Ms. Tamara Pomanski): Yes. Some of them he didn’t keep because he didn’t want them, but I have them. So you can come back to me and get them.
Mr. Gilles Bisson: So my point is, if I want to go and see the unredacted, you have it?
The Clerk of the Committee (Ms. Tamara Pomanski): I have them all.
Mr. Gilles Bisson: Thank you very much.
The Vice-Chair (Mr. Phil McNeely): Any more discussion on the report? All in favour of the subcommittee report?
The Clerk of the Committee (Ms. Tamara Pomanski): As amended.
The Vice-Chair (Mr. Phil McNeely): As amended. Thank you.
The Clerk of the Committee (Ms. Tamara Pomanski): Can we raise our hands? Can we do it properly, please?
The Vice-Chair (Mr. Phil McNeely): All in favour of the report of the subcommittee, as amended? We have all members supporting. Thank you.
Mr. John Yakabuski: Adjourned?
The Vice-Chair (Mr. Phil McNeely): Adjourned.
The committee adjourned at 1026.
Thursday 24 October 2013
Members’ privileges JP-1067
Mr. Dwight Duncan JP-1067
Subcommittee report JP-1084
STANDING COMMITTEE ON JUSTICE POLICY
Chair / Président
Mr. Shafiq Qaadri (Etobicoke North / Etobicoke-Nord L)
Vice-Chair / Vice-Président
Mr. Phil McNeely (Ottawa–Orléans L)
Ms. Teresa Armstrong (London–Fanshawe ND)
Mr. Bob Delaney (Mississauga–Streetsville L)
Mr. Steven Del Duca (Vaughan L)
Mr. Frank Klees (Newmarket–Aurora PC)
Mr. Jack MacLaren (Carleton–Mississippi Mills PC)
Mr. Phil McNeely (Ottawa–Orléans L)
Mr. Rob E. Milligan (Northumberland–Quinte West PC)
Mr. Shafiq Qaadri (Etobicoke North / Etobicoke-Nord L)
Mr. Jonah Schein (Davenport ND)
Substitutions / Membres remplaçants
Mr. Rick Bartolucci (Sudbury L)
Mr. Gilles Bisson (Timmins–James Bay / Timmins–Baie James ND)
Mr. Grant Crack (Glengarry–Prescott–Russell L)
Ms. Lisa MacLeod (Nepean–Carleton PC)
Mr. Peter Tabuns (Toronto–Danforth ND)
Mr. John Yakabuski (Renfrew–Nipissing–Pembroke PC)
Also taking part / Autres participants et participantes
Mr. Victor Fedeli (Nipissing PC)
Clerk / Greffière
Ms. Tamara Pomanski
Staff / Personnel
Ms. Karen Hindle, research officer,
Mr. Peter Sibenik, Table Research Clerk,