12/03/2013 04:05 EST | Updated 02/02/2014 05:59 EST

Wynne was advised negotiations on cancelled gas plants cheaper than lawsuit

TORONTO - Ontario's Liberal government was advised that negotiations with the developer of the cancelled Oakville gas plant would be cheaper than a lawsuit, Premier Kathleen Wynne testified Tuesday at legislative hearings as she defended her role in the affair.

"The risk of litigation was, we believed, greater in terms of the interests of the people of Ontario than the risk of entering into a negotiation, so that is the decision that we made," Wynne told the justice committee. "The risk of a higher cost was there on both options."

It was Wynne's second appearance this year before the committee, which is probing the Liberals' decisions to cancel planned gas plants in Oakville and Mississauga prior to the 2011 election at a cost of up to $1.1 billion.

The NDP accused Wynne of driving up the cost of the Oakville cancellation when she signed a cabinet document that promised to make the developer _ TransCanada Enterprises _ "whole," which they said undermined the province's negotiating position.

The Liberals didn't want a lawsuit becoming news during the 2011 election campaign, so they chose the more expensive option of negotiating for a new gas plant with TransCanada, said NDP house leader Gilles Bisson.

"Clearly the government made a political decision to try to duck under the radar and not have this issue blow up as litigation during the campaign, and the decision to do that led to the increased costs," said Bisson.

Former premier Dalton McGuinty and many other senior Liberals, including Wynne, originally insisted the cost of cancelling the Oakville plant would be $40 million, but the auditor general found it will cost as much as $810 million.

Wynne denied originally low-balling the cost estimates of the gas plant cancellations, saying there were lots of figures being bandied about and that's why she asked the auditor general to determine the real figures.

The Tories also went on the attack against Wynne for signing the document that they say gave the developer a stronger hand to wring compensation from the government.

Wynne claimed she had done the "responsible thing" by avoiding the lawsuit, but Progressive Conservative energy critic Lisa MacLeod said a responsible politician would not have signed off on what amounted to a "blank cheque" for TCE.

"We're now talking about signing off on a document that you didn't understand or didn't understand what the repercussions were," said MacLeod. "This now becomes a matter of trust, beyond cover up, beyond the amount of money that it has cost the people. The question now becomes whether or not we can trust you?"

Wynne told the committee she wasn't directly involved in the Liberals' decisions to scrap the gas plants before the 2011 election, even though she was the party's campaign co-chair.

Wynne also offered another mea culpa for the expensive decisions to cancel the gas plants, and said she had made changes to make sure there is no repeat.

"As premier I have accepted full responsibility,' Wynne told the committee. "I've apologized for the expense of these relocations and I've put in place new rules to ensure that this does not happen again."

The Oakville gas plant will be relocated to the Kingston area while the one that was partially built in Mississauga before it was cancelled will be relocated to the Sarnia area.

MacLeod also lashed out at Wynne for saying she knew nothing about an OPP visit to the premier's office to investigate the mass deletion of gas plant emails by top Liberals who used to work for McGuinty.

"The problem is they did appear at your office," said MacLeod.

"I don't know the details of that investigation because I don't direct the police," Wynne responded.