ONTC selloff costs pegged at $820 million – auditor – by Gord Young (North Bay Nugget – December 11, 2013)


The costs associated with selling off the Ontario Northland Transportation Commission could be more than $820 million, something the provincial government was unaware of when it announced plans to divest itself of the Crown agency.

In a report released Tuesday, Auditor General Bonnie Lysyk confirmed that the costs and liabilities associated with divestment far outweigh the projected savings of $265.9 million over three years. And she said the province did not clearly or fairly communicate the full impact of selling off the ONTC.

“The government made the divestment announcement before doing a comprehensive business-case analysis,” Lysyk said, in a release after tabling the report. “As a result, the government did not initially have an accurate picture of the possible costs and impacts of the ONTC divestment.”

Lysyk said the estimated known costs and liabilities could be as high as $820 million and that the price could soar even higher when coupled with as-yet-unknown costs of environmental clean-up of ONTC properties and the duty to consult with aboriginal peoples. She also noted that government subsidies and revenues from operations over the past two decades have been insufficient to plan for and complete improvements to properly maintain ONTC infrastructure – something that may also need to be factored into a potential sale.

The $820 million figure is even higher than the up to $790 million figure Nipissing MPP Vic Fedeli warned in June based on finance ministry documents.

“I have stated from day one there would be no savings from this, and today the auditor has confirmed that,” said Fedeli, who suggested the government’s shift from divestment of the Crown agency to transformation is all due to the associated costs.

Fedeli said he was told by the auditor that the Liberals were given her findings two weeks ago, shortly before a revision to the memorandum of understanding between the ONTC and Ministry of Northern Development and Mines regarding divestment was announced.

He said the Liberals should give ONTC employees and their families some peace of mind before Christmas by taking divestment off the table and moving ahead with a strategic review of all of the Crown agency’s assets as proposed by the Tories in order devise a plan that will see the organization returned as the economic engine of Northern Ontario.

Northern Development and Mines Minister Michael Gravelle issued a statement following the release of Lysyk’s report, saying the government takes it very seriously and will carefully reflect on her comments as it moves forward.

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