The banality of billion-dollar boondoggles – by Martin Regg Cohn (Toronto Star – October 9, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

What’s a billion dollars? It’s a bonfire of insanity — big money going up in smoke to cancel two gas-fired power plants.

To read the latest damning report from the independent auditor general’s office is to weep. In clinical, actuarial language, it exposes the costly blunders that brought down Dalton McGuinty and now weigh down his successor as premier, Kathleen Wynne — with taxpayers and ratepayers paying for their mistakes.

By deconstructing those cancellation costs, the auditor general’s office has come up with a bracing figure of $1.1 billion (plus or minus) that raises the political stakes:

Brace yourself for endless “billion-dollar-boondoggle” sound bites from the opposition. But beyond the alliteration, it’s an illustration of a home-grown Greek tragedy — borne of political hubris and human miscalculations.

What’s a billion dollars? Politically and fiscally, it is everything and nothing — a number so gargantuan it borders on abstraction. “What’s a million dollars?” is a phrase long attributed to C.D. Howe, Canada’s legendary dollar-a-year cabinet minister, uttered during a wartime debate. But it’s a misquote.

He actually said, “A million dollars from the War Appropriation Bill would not be a very important matter.” His point was that $1 million was small change when fighting a world war.

The provincial government foolishly hinted at a similar (peacetime) defence Tuesday, when trying to put its overspending in perspective. The Liberals implied that $1 billion is bite-sized when amortized over the long term (spread out over the two decades analyzed by the auditor, it works out to $50 million a year out of an annual electricity budget of $15 billion).

The Liberals’ self-serving math misses the point. Equally, though, it would be wrong to treat the auditor general’s predictions as gospel. Or conclude there was a conspiracy to defraud Ontarians, much less cover up a crime.

The truth is far more tragic, the boondoggle more banal.

Aborting an Oakville gas plant in 2010 may cost $675 million (and as much as $140 million in additional gas delivery charges that are hard to predict), the auditor concludes. That’s a quantum leap from the $310 million predicted by the arm’s-length Ontario Power Authority earlier this year.

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