POLITICS
12/03/2018 16:40 EST | Updated 12/04/2018 10:28 EST

Kathleen Wynne Defends Liberal Accounting Choices At Tense PC Committee

Premier Doug Ford says Wynne underestimated Ontario's deficit by billions.

Former premier Kathleen Wynne listens during her appearance at the select committee on financial transparency at Queen's Park on Dec. 3, 2018.
ONTARIO LEGISLATURE
Former premier Kathleen Wynne listens during her appearance at the select committee on financial transparency at Queen's Park on Dec. 3, 2018.

TORONTO — Ontario's former Liberal premier insisted Monday that her government did not try to cover up the full financial impact of cutting hydro rates by taking on billions in debt, saying the accounting practices used and their effect on the province's books were no secret.

Kathleen Wynne's comments came as she testified at a committee tasked with investigating her regime's financial practices, which the current Progressive Conservative government said left the province with a $15 billion deficit.

Wynne acknowledged that the Liberals were trying to balance the budget when they brought in the Fair Hydro Plan in 2017, but said their main objective was to help people struggling to pay their bills.

"We worked with (Ontario Power Generation) to find a way to keep the cost of the electricity investments within the electricity system, on the rate-base,'' she said. "That was our motivation ... and yes, there was an imperative we had to balance the budget, but they were not necessarily one and the same thing.''

The committee questioning Wynne was created in September by Premier Doug Ford, whose Progressive Conservatives won a majority in June. Ford announced the committee days after his finance minister said Ontario was facing a $15 billion deficit, which the government said it has since brought down to $14.5 billion.

Tense moments

Critics have disputed the deficit figures and slammed the work of the committee as politically-motivated.

Tory legislator Roman Baber, a member of the committee, repeatedly pressed Wynne about whether the Liberals kept the debt to lower hydro rates "off-book'' in order to fulfil a promise to balance the province's budget.

"You needed to keep the costs of the hydro plan off the books, isn't that correct?'' he said.

ONTARIO LEGISLATURE
Progressive Conservative MPP Roman Baber questions former premier Kathleen Wynne at Queen's Park on Dec. 3, 2018.

Wynne stressed that her chief concern was helping Ontarians.

"There were no secrets here,'' she said of the way the Fair Hydro Plan, which cut rates by 25 per cent, was enacted last year.

The committee's chair, PC MPP Prabmeet Singh Sarkaria, warned Baber to watch his tone three times.

There were no secrets here.Kathleen Wynne

Ross Romano, the MPP for Sault Ste. Marie, asked questions that were rejected by other members of the committee as off-topic. He asked Wynne if she agreed that when heading into an election, a politician needs to make sure that voters like them better than their opponent, or at least dislike them less.

"We already knew that people didn't like me, so that's not an issue," Wynne responded. Romano was asked to move on.

The Fair Hydro Plan lowers time-of-use rates by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers.

For a decade, a new entity overseen by Ontario Power Generation is taking on debt to pay that difference. Then, the cost of paying back that debt with interest — which Liberals government said would be up to $28 billion — will go back onto ratepayers' bills for the next 20 years as a "Clean Energy Adjustment.''

Wynne told the committee that governments of all political stripes had failed to adequately fund electricity infrastructure across the province. Large-scale investment was required to upgrade it but led to a hike in hydro rates, she said.

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The decision to then attempt to lower those rates was not simple, she said.

"Essentially, we were trying to redress costs that should have been invested over decades,'' she said. "So, we were actually trying to do something that was, in some ways, was unnatural.''

Ontario's auditor general said last year that the plan's total cost will be $39.4 billion over 30 years, but the Liberals' accounting meant Ontario's net debt and future deficits wouldn't reflect that. She also accused the Liberals of shifting the increased cost to a new generation of rate payers.

The new Tory government has said it has since adopted the auditor general's accounting in reaching its new deficit figure.

The select committee hearing Wynne's testimony is expected to deliver a final report later this month.

With files from Emma Paling

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