Opinion

Doug Ford's 'efficiencies' seem to be costing taxpayers an awful lot of money: Robyn Urback

For a party that campaigned on cutting the waste, the PCs appear to be wasting a lot on hasty efforts to save a little. Penny-wise and pound foolish "for the people," I guess.

Penny-wise and pound foolish 'for the people'

Ontario Premier Doug Ford campaigned on a promise to cut costs — and it's costing Ontarians a lot of money. (Chris Young/Canadian Press)

Looking back now, Doug Ford's campaign promise to conduct an independent audit of Ontario's finances — essentially duplicating the work of the already independent provincial auditor general — was a harbinger of how this government would go about finding its "efficiencies."

The new PC government would hire former B.C. premier Gordon Campbell to lead its commission of inquiry in Ontario's finances, as well as EY Canada to deliver a line-by-line "audit" (in practice, it would be more a review than an audit, since there wasn't time for a proper line-by-line audit) of the province's financial situation.

And — surprise! — the commission found that the previous Liberal government had hugely understated the deficit, which Auditor General Bonnie Lysyk had previously noted; and EY Canada reported that the province's operating expenses had ballooned under the Liberal government, which Lysyk had also documented in meticulous detail.

The exercise, then, was akin to purchasing a very expensive metal detector and swinging it over an already combed-over beach. There would be no way for the government to offset the cost of the equipment or the time wasted, but Ford would nevertheless hoist a piece of rusted metal over his head, look directly into the camera of his taxpayer-funded news station and declare: "For the People!"

Ontario Auditor General Bonnie Lysyk routinely noted that the Liberals had understated the provincial deficit — something Ford confirmed with not one but two separate reviews of the province's books. (Frank Gunn/Canadian Press)

We've seen this same routine a few times already from this six-month-old provincial government. Ford vowed to save taxpayers $25 million over four years by cutting Toronto City Council nearly in half, and went so far as threatening to use the notwithstanding clause to deliver on it.

But last week, Toronto councillors voted to nearly double their office and staffing budgets — from a combined $275,000 per office to $532,000 — to maintain the level of service for constituents as they adapt to the smaller council and new ward boundaries.

Had office budgets stayed the same, the city would have saved approximately $8.5 million per year ($2.5 million in 22 fewer councillor salaries and around $6 million in saved office expenses). But the budget increase means an extra $6.4 million in expenses, cutting the net savings down to $2.1 million.

It would be easy to blame Toronto councillors for vindictively sticking it to Ford by hiking their own budgets. But the same could no doubt be said of Ford singling out one city council among many to find efficiencies — especially considering it's the same city council that voted down his late brother's previous attempt to shrink its size. In any case, the Ontario government has expended an awful lot of grief, time, legal expenses and political capital for a measly couple million dollars in savings.

The same goes for Ford's barnburner promise to fire the "six-million-dollar man," which, in turn, has cost the province millions more in penalties and — perhaps more importantly — has dealt a big blow to Ford's efforts to rebrand Ontario as "open for business."

The six-million-dollar-man — known as Mayo Schmidt outside of PC campaign literature — was the CEO of Hydro One, whom Ford targeted for his $6.2 million compensation package in 2017. Ford promised that Schmidt's ousting would be among the first things he did as Ontario premier, even though the corporation was partially privatized by the Wynne government, leaving the province with a minority 47 per cent share.

Political interference

Ford was nevertheless successful in pressuring Schmidt to leave his post, which the now-former CEO exited with a $400,000 lump sum and likely millions more in awards and benefits. His resignation catalyzed a mass resignation of the entire 14-member board, the effects of which weren't really felt until last week, when U.S. regulators denied Hydro One's proposed takeover of Spokane-based energy company Avista Corp., citing political interference. 

Hydro One president and CEO Mayo Schmidt bowed to pressure from Ford to step down from his $6 million a year job. He left with millions in stocks and other benefits. (John Woods/Canadian Press)
   

"The agreement resulting in the resignation of the Hydro One board and CEO elevated the provincial government's political interests above the interests of other stakeholders, including investors that own 53 per cent of Hydro One's common stock," the Washington Utilities and Transportation Commission said. In other words, the commission was concerned about Ford sticking his nose in it.

The decision will see Hydro One pay a $103 million US (or $138 CAD) penalty for terminating the agreement, in addition to other sunk financing costs.

Essentially, the Ontario government will spend tens of millions of dollars to save $6 million.

Hydro One's share price did jump immediately after the Avista deal fell through, but in the long term this decision is hardly one to celebrate: it confines the growth of the utility both in terms of its own size and in terms of regional expansion. And if the government is seen to meddle in a company for which is it just a minority shareholder, what message does that send about doing business in Ontario — either with the government or with so-called private corporations? (I believe Tesla has an opinion on this.)

For a party that campaigned on cutting the waste, the PCs appear to be wasting a lot on hasty efforts to save a little. Penny-wise and pound foolish — for the people, I guess. 


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About the Author

Robyn Urback

Columnist

Robyn Urback is an opinion columnist with CBC News and a producer with the CBC's Opinion section. She previously worked as a columnist and editorial board member at the National Post. Follow her on Twitter at:

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