Public-private financing cost Ontario taxpayers $8...
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Dec 09, 2014  |  Vote 0    0

Public-private financing cost Ontario taxpayers $8 billion, auditor says

The Liberal government’s use of public-private partnerships cost taxpayers an extra $8 billion, says Ontario auditor general Bonnie Lysyk in her annual report


The Liberal government’s addiction to public-private partnerships — including the questionable MaRS “bailout” — cost taxpayers an extra $8 billion at a time when Ontario has a crippling debt load

That’s the verdict in Tuesday’s scathing 595-page annual report from auditor general Bonnie Lysyk, who projects the debt will reach $325 billion or $23,000 for every man, woman and child in the province by 2017-18.

Among other things, she found:

• the province is inadequately overseeing programs from child care to vaccinations

• $1.9 billion spent on “smart meters” did not help consumers reduce demand for electricity at expensive peak times

people with developmental disabilities face huge waiting lists for residential placements

• key recommendations from the inquiry into the 2000 Walkerton tainted water disaster have not been implemented.

Lysyk said she wants to make sure Ontarians get “value for money” from the dollars they send to Queen’s Park.

“Government is complicated. Every day the public sector is challenged to make decisions that Ontarians would consider to be the right ones.”

Premier Kathleen Wynne said before the report was released that “the auditor general brings a new set of eyes to the operation of government.”

“We welcome accountability,” she added.

Lysyk was especially critical of the private-public partnerships that the Liberals have embraced since taking power in 2003, claiming they are the fastest way to build public infrastructure such as hospitals, courthouses, roads, bridges and more.

Auditors studied 74 such projects — which the Liberals bankroll using the term “alternative financing and procurement” instead of the more politically loaded P3s — and concluded they could have been managed and built by the public sector much more cheaply.

“Tangible costs, such as construction, finance and professional services, were estimated to be nearly $8 billion higher under the alternative financing and procurement approach than they were estimated to have been if the projects have been delivered by the private sector,” Lysyk wrote.

“About $6.5 billion is due to higher private-sector financing costs,” she added, noting government can borrow money at cheaper rates than private companies.

In its defence, the government agency Infrastructure Ontario told Lysyk the $8 billion difference is more than offset by the risk of potential cost overruns if construction and maintenance of those projects was done by the public sector.

Taking aim at the controversial and mostly empty MaRS phase two office tower at the southeast corner of College St. and University Ave. across from Queen’s Park, Lysyk said a $235 million taxpayer loan is questionable.

“The lack of transparency regarding the policy objectives and outcomes to be achieved from this loan create the perception that this transaction was a ‘bailout’ of a non-government organization,” she wrote.

Wynne’s predecessor as premier, Dalton McGuinty, approved a rule change allowing the MaRS loan to go ahead after a U.S. developer partnering on the project failed to fill the medical and related science building with tenants.

The government is scrambling to lease the building, which is more than two-thirds vacant and the subject of frequent criticism from opposition parties dating to last spring’s election campaign.

“We conclude that the government assumed significant risks in order to support MaRS’s mission,” Lysyk added.

Infrastructure Minister Brad Duguid has maintained the building is key to bolstering Ontario’s bioscience sector — but has not guaranteed it will be rented to other types of businesses or sold off altogether.

Worryingly for parents, Lysyk found more than 29,000 “serious occurrences” such as injuries, abuse, fires or missing children at licensed child care operators and private home daycare agencies from Jan. 1, 2009 to last May 31.

Despite such frequent incidents, inspections are “not conducted on a timely basis” — including one centre dubbed “high-risk” that had not been inspected since November 2012 despite a lack of child supervision, improper food storage and failing to keep knives and harmful cleaning products away from kids.

More than 80 per cent of high-risk centres were not inspected until after their licenses had expired.

Lysyk also needled the Ministry of Health over its $250 million annual vaccination program.

There is no way of knowing how many Ontarians get shots for infectious diseases such as measles and the flu, Lysyk noted. She raised questions about billings for flu shots, saying there were 21,000 incidents where the Ministry of Health paid doctors and pharmacists for giving shots “more than once” to the same person last year.

As well, the ministry has no idea what happened to more than 20 per cent of the doses of flu vaccines purchased annually.

And while there is a new computer system called Panorama to track vaccinations, its estimated cost of more than $160 million is $85 million over the amount budgeted.

“As is currently the case with the ministry’s older system, if all vaccinations administered are not included in Panorama, it will not provide the data needed to identify areas of the province with low immunization coverage rates,” Lysyk said.

Turning to fallout from the Walkerton tainted water tragedy that killed seven and left 2,300 ill 14 years ago, the report found the Ministry of Environment is still reviewing and approving local source water protection plans required by the 2006 Clean Water Act.

“The ministry still has no clear time frame when all source water protection plans will be approved,” said Lysyk, who also noted spills from industrial and commercial facilities pose a threat to water intake systems on the Great Lakes but that none of the protection plans address the prospects.

Toronto Star

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(3) Comment

By Prometheus | APRIL 30, 2015 07:37 AM
I think that the auditor general has done a great job bringing out a lot of money wasting practices. Now if she only had the staff to dig deeper I'm sure her yearly report would actually be enough to cause a non-confidence vote in the House of Commons and cause a provincial election I'm not sure how these things work? What I do know is a lot of companies are packing up and moving to A: Mexico or B: United States all over the cost of hydro now and the sale of 60% of hydro to the private sector. An estimated 33% raise in cost of hydro over 3 years is going to be a disaster for all.
By StatusQuoContinues | DECEMBER 09, 2014 10:06 PM
$23,000 for every man women and child has been paid to line the pockets of the elite in this province, in yet our services are being cut everyday..............Have citizens had enough yet?, Only another 3 1/2 more years boys and girls, hope you enjoy it. I hope you can explain your poor decisions to your grand-children and great grand-children who will be forced to repay this debt you have now enslaved them with. How do you liberal voters sleep at night, knowing what you have caused?
By Doug | DECEMBER 09, 2014 04:35 PM
The $8 billion should come from the Liberal Party of Ontario. Please. please, someone launch a class action lawsuit, against not just the part but those who are in charge, personally.
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