Hydro One, OPG included in expense crackdown

TORONTO, ONTARIO - Stung by two devastating spending scandals, Premier Dalton McGuinty has ordered all expenses at 23 provincial agencies, boards and commissions to be reviewed and approved by the Ontario integrity commissioner beginning this fall.

Under the new rules, employees with unacceptable expense claims such as alcohol for staff functions and personal items must repay the taxpayers.

The 23 organizations, the largest of 600 such entities in the province, range from Hydro One to the embattled Ontario Lottery and Gaming Corp. to GO Transit.

Ontario Power Generation (OPG), employs about 12,000 people in communities across the province and generates about 70 per cent of power produced in Ontario. It operates three nuclear, five fossil and 65 hydroelectric stations, as well as two wind generating stations. The company's second quarter profit was $306 million this year.

McGuinty's move follows the revelations employees at OLG expensed items such as $615 worth of replacement luggage, a $30 car wash without a proper receipt, and a $3,713.77 dinner for 38 people that included more than 10 bottles of wine and other alcohol.

The government announced it had fired CEO Kelly McDougald with cause. The OLG board of directors also resigned.

The message is clear, said McGuinty, who for months has been dogged by an earlier spending scandal at eHealth Ontario.

"You have a responsibility to look out for the interest of taxpayers," he said. "Just because you operate at arm's length from our government, doesn't give you the right to straight-arm taxpayers. You have a responsibility to be held accountable."

If anyone doubts the Liberals resolve on policing its agencies, they should take a hard look at OLG, he added.

"You must lead by example. If you fail to abide by the rules there will be consequences," said McGuinty.

The Progressive Conservative party had targeted the agency, which is in charge of everything from casinos to Lotto 6/49, with a freedom-of-information request eight months ago.

The Tories say the Liberals refused to release the documents to them until the same day the OLG changes were announced.

Progressive Conservative Leader Tim Hudak told reporters McGuinty should "spare" the phony remorse. "The only reason he came forward today was, yet again, like eHealth, he got caught," Hudak said.

Both the Tories and the NDP have repeatedly called for Health Minister David Caplan's resignation over his handling of the eHealth Ontario affair. When Caplan was infrastructure minister, he oversaw the problem-plagued OLG.

NDP Leader Andrea Horwath said the Liberals continue to absolve their ministers of responsibility.

The eHealth scandal involved $16 million in untendered contracts, along with the hiring of consultants who were paid nearly $3,000 a day and expensed items such as a $1.65 cup of tea.

Finance Minister Dwight Duncan revealed OLG gave out untendered contracts but he didn't know for how much or to whom. He promised details would be forthcoming.

McGuinty said he was not surprised to hear sole-sourced contracts went out. "Until recently, that was lawful. It's been lawful for 40, 50, 60 years. We've changed that – now you can't do that," McGuinty said.

There are government rules and regulations surrounding liquor expense claims. In 2007, OLG asked for an exemption on travel and hospitality expenses rules but it was not granted.

McGuinty said there are clear rules on what is permitted and what isn't.

"We will now leave it to the auditor (general) to determine what is appropriate and what isn't," he said.

The Liberals have also ordered a review of the 600 provincial agencies, boards and commissions to root out spending abuses. The auditor general, who will soon release his in-depth investigation on eHealth Ontario, will next investigate OLG.