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Liberal Bob Chiarelli, Ontario’s new energy minister, has at least levelled with the public: The government really has no idea how much cancelling the Oakville gas power plant will cost. That’s not much of a statement, but given the evasions and outright denials we’ve heard previously, this actually marks some progress.
Oakville is a lovely city on the western edge of the Greater Toronto Area. It was also slated to be home to a new gas-fired powerplant under a plan developed, and repeatedly and strenuously championed, by former premier Dalton McGuinty. The plant would have provided relatively clean electricity to the Toronto area, which has surged in population in recent decades, with no let up in sight. But it was deeply unpopular with the local population, and threatened the Liberals’ hold on the riding.
Ahead of the 2011 election, when polls showed the Progressive Conservatives had a got shot at winning, the Liberals suddenly announced that they were cancelling plans to build the plant (as well as another in nearby Mississauga, another Toronto suburb where local opposition to the plant was strong, for an estimated $190-million).
It worked. The Liberals held both seats, and secured a minority government. But the whole affair stunk something awful, and since the election, senior Liberals — up to and including Premier Kathleen Wynne — have acknowledged that the decision to scrap the plants was not policy decision, but a political one. They scrapped the plants to save their own political hides. That’s not disputed by anyone.
But what is disputed is how much it cost. The first figure cited by the government for the scrapping of the Oakville plant was $40-million, a figure they claim came from the Ontario Power Authority (OPA) and that covered all non-recoverable costs invested to that point. The Liberals have doggedly stuck by that figure.
But it didn’t take long before independent analysis was suggesting the real cost could easily be 10-15 times higher than that. While it’s true that $40-million might cover the costs of not building in Oakville, it doesn’t begin to address the new costs required to build a plant somewhere else.
Somewhere else, in this case, is Sarnia, a small city in southwestern Ontario. That location doesn’t face the strong local opposition — if anything, the locals are delighted to receive the jobs the plant will provide. But the location is far from ideal for a plant intended to serve the Toronto area’s electricity needs. It requires, for instance, enormous investments in electrical transmission and gas supply infrastructure — which the Oakville site did not. The estimate for the added costs, which should be tacked onto the official $40-million figure, is roughly $600-million.
Enter Mr. Chiarelli. On Monday, he admitted that the $40-million figure that the government has been clinging to “could be wrong.” He did not go as far as to endorse the estimate of $638-million, but it’s the first crack in the Liberal story. Whatever the final number may end up being, even the Liberals are now acknowledging that it’s unlikely to be $40-million.
For the rest of this column, please go to the National Post website: http://fullcomment.nationalpost.com/2013/03/19/matt-gurney-ontario-liberals-didnt-even-care-how-much-money-they-wasted/