The province has estimated divestment of the Ontario Northland Transportation Commission could cost as much as $790 million.
And while Nipissing MPP Vic Fedeli is suggesting the information is a smoking gun that shows the sell off can no longer proceed, the Liberals, New Democrats and ONTC unions are all accusing him of political rhetoric.
“He promised a bombshell and it’s a dud,” said Brian Kelly, a spokesman for the General Chairperson’s Association, representing unionized workers at the ONTC. Kelly said the it’s “old news” that there are huge costs tied to divestment – something ONTC unions have claimed from the outset.
“We have been saying that from Day 1,” said Kelly, suggesting Fedeli’s announcement Friday revealing the potential liabilities associated with divestment does nothing to fuel efforts to protect ONTC jobs and services.
He said the province appears to have already shifted its position, with Northern Development Minister Michael Gravelle announcing options other than divestment are now being considered.
And Kelly said Fedeli appears to be more concerned about his own job than those of ONTC workers, who haven’t forgotten how he refused to stand with them last year when they gathered outside his Main Street office seeking his support.
Fedeli held a morning news conference to reveal Ministry of Finance documents, released to the standing committee on justice as part of the gas plant investigation, which outline “worst case” estimates for transitional funding to support the divestment process.
“The government has stated they wanted to divest Ontario Northland to save money. Their own documents prove they now know any sale will actually cost the taxpayer $790 million,” said Fedeli, who suggested the province is now backing away from divestment as a result of the figures included in the documents.
The documents, which are undated but come after the cancellation of the Northlander and request for proposals for Ontera, indicate costs associated with divestment could be higher than the province expected, mainly due to labour and severance costs, benefits and pension liabilities.
And the documents show labour and severance costs alone could be much as $250 million, up from $25 million originally earmarked as part of the planning process for divestment.
The $250-million estimate, however, assumes no employment by a new owner or labour strategy; that all eligible employees receive employment security; and that all eligible employees collect full benefits over a period of up to 14 years.
The documents also show post-retirement benefits of as much as $56 million, pension liabilities of $212 million, a net loss on asset sale of $200 million and subsidy to close of $72 million.
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