TORONTO - Ontario's Tories released documents Thursday that they said show the governing Liberals secretly approved a $317-million bailout of a Toronto building project by a private developer and a charity, a charge the Liberals called false.
The province gave $71 million to buy the land to expand the MaRS innovation research centre in downtown Toronto, and a $234-million loan for a new tower, but the documents show MaRS and the developer couldn't repay the money, said Progressive Conservative Leader Tim Hudak.
Premier Kathleen Wynne approved a multimillion-dollar bailout without the public's knowledge, added Hudak.
"I think the fact that this was done in secret in a cabinet meeting before the election campaign tells me that this is another wasteful Liberal scramble and coverup," he said at a campaign stop in Toronto.
According to the documents, which the Tories claimed they received from a government whistleblower, the development's $317-million purchase price would include the $234-million government loan to MaRS and the real estate developer.
Wynne called the allegations untrue, saying the proposed deal has not been made public because the purchase agreement has not been finalized. If it goes through, she said, the building would house government offices, saving money on leases.
"It's the kind of responsible decision that government needs to make in order to use taxpayers' dollars as wisely as possible," Wynne said at a campaign stop in Toronto.
"And having a building that we own, that the government owns, that the people of Ontario own, that allows government of Ontario offices and functions to be located in one place. That's a responsible thing to do."
The Tories were quick to dismiss Wynne's argument.
"If the government was really in the business of needing more office space, then they should have had a competitive process, looked for space and got the best deal for Ontarians, not build a Taj Mahal for bureaucrats at one of the most expensive corners in downtown Toronto and then use that as an issues management excuse," said Tory campaign spokesman Will Stewart.
The Tories said the Liberals are using tax dollars to avoid the political embarrassment of having the real estate deal crash down around them in the middle of an election.
"It shouldn't happen in secret. It shouldn't happen with a lack of transparency," said Hudak. "A $300-million bailout just before an election campaign? All they care about is Liberals and Liberal insiders and Liberal seats."
Hudak brought up another Liberal scandal — the cancellation of two gas plants, one just days before the 2011 election — which he called "an expensive Liberal seat saver program" that cost taxpayers up to $1.1 billion.
"That is why I've always had a concern when Kathleen Wynne describes the gas plant scandal as a mistake, like it's some sort of traffic ticket that she got," he said. "It was a deliberate betrayal of the taxpayers ... now, we can see it (again) with this latest MaRS scandal."
The Liberals learned nothing from their lack of oversight that led to mismanagement and scandals at eHealth Ontario and Ornge, the province's air ambulance service that is now the subject of a police investigation, said former PC MPP Frank Klees.
"These documents read like a repeat of the Ornge documents that were sent to me by whistleblowers who could no longer stand the corruption that was going on there," he said.
"They paid too much for the property and for the construction, but now it's the taxpayers of this province who will pick up another $300 million plus liability — all due to the lack of oversight, the mismanagement on the part of this government."
The Tories say the government should take the hit on the books and let MaRS suffer the consequences of bankruptcy from a bad real estate deal.
"I think only a Liberal could say that borrowing $317 million from overseas lenders to bail out a Liberal mistake makes any sense whatsoever," said Hudak.
The New Democrats called the MaRS bailout "another example of the Liberals having the wrong priority" instead of focusing on the needs of Ontarians.
"I have to tell you that I'm quite concerned if we yet have another example of the Liberals doing anything and everything to try to avoid any kind of suggestion that the decisions they've made have been wrong decisions," said NDP Leader Andrea Horwath.
MaRS, a federally incorporated charity, was set up in 2002 as Ontario's flagship innovation centre, a bridge between governments, academia and private companies to look for commercial opportunities from research and development projects.
— With files from Maria Babbage and Diana Mehta
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