Power companies ‘gamed’ more than $100M; and other highlights of the Auditor General’s Report

Among key findings of the annual report by Ontario’s Auditor General, Bonnie Lysyk, is the determination that Ontario electricity ratepayers are paying millions to power generators who gamed Ontario’s electricity system to pay for things like scuba gear, parkas and car washes.

“Nine generators claimed up to $260 million in ineligible costs between 2006 and 2015, and about two-thirds of that has been paid back,” said Prince Edawrd Hastings MP Todd Smith, the PC Caucus Energy Critic. “One natural gas plant in Brampton “gamed” the system for about $100 million (in start-up and other costs). All of which Ontario ratepayers are on the hook for.”

Lax oversight of power producers by Ontario’s Independent Electricity System Operator‎ (IESO) has added hundreds of millions of dollars to hydro bills, according to the report. Lysyk also said the IESO hasn’t implemented repeated recommendations from the Ontario Energy Board that could save ratepayers $30 million a year.

Her office will exercise its legal authority to audit the Dec. 31, 2017 financial statements of the IESO. Lysyk said an independent audit by her office is in the public interest because of the IESO’s role in the government’s complex new accounting/financing design to keep the cost of the 25 per cent electricity discount off the province’s financial statements.

“Generators claimed thousands of dollars a year for staff car washes, carpet cleaning, road repairs, landscaping, scuba gear and raccoon traps which have nothing to do with running power equipment on standby,” said Smith.

In addition to inappropriate expenses that had nothing to do with the electricity system, the report highlighted the fact that several members of the group that the government put together to draft new rules for the electricity system were either under investigation for breaking existing rules or had billed for millions in inappropriate expenses as well.

“The government is asleep at the switch on the electricity file. For years, the regulators have been raising red flags about accountability and the potential for abuse in the energy sector. Four energy ministers and two Liberal premiers ignored those warnings,” he said. “Now, they’re sending Ontarians the bill.”

Lysyk also stated the government’s continued use of non-standard accounting could throw off the accuracy of the province’s bottom line by up to $4.5 billion next year.

Bonnie Lysyk

“There is a very real risk that the balanced books expected to be reported by the government using these accounting methods next year will conceal the true annual deficit and net debt,” Lysyk said today. “This will seriously distort the true state of the province’s finances.”

In other finding highlights, Lysyk said teachers and school board employees are taking more sick days – about 12 each year, up from nine days five years ago.

– More families are waiting for social housing (185,000) than living in social housing (167,000).

– Ontario is paying tens of millions of dollars to send cancer patients to the United States for stem cell treatments that aren’t available here.

– More than 800 of government-owned buildings are sitting empty.

– The government spent $58 million on advertising last year – nearly one-third of which was for ads designed “to make the government look good”.

– Homeowners who appeal property assessments are stuck in an enormous backlog, even though the number of appeals filed has dropped in the past decade. 16,600 appeals are outstanding and some property owners are waiting four years for decisions.

– Only one of Ontario’s four main farm-support programs – the Production Insurance Program – sufficiently helps farmers manage losses. However, the $100-million a year Ontario Risk Management Program often pays farmers with little regard to individual need. Only half of farmers who received payments between 2011 and 2015 actually reported either a loss or a drop in income in the year they received the payment.

– Province’s emergency response plans have not been updated in eight years.

– There’s room for more savings on generic drugs. While the prices have dropped in the past 10 years, the province still pays more than foreign countries.

– The province does not know whether Ontario’s 36 public health units are making progress in the fight against preventable chronic diseases.

The report also highlights areas where things are working well.
– Most cancer patients are generally receiving treatment in a reliable manner.
– Accurate and timely lab results are being delivered to health-care professionals
-The Ontario Public Drug Programs have provided timely access for eligible recipients when their prescribed drugs are lited on the formulary
– More attention is being given to finding ways to improve emergency management in Ontario and updating the provincial Nuclear Emergency Response Plan.