Published on: 3/7/2013 4:29:47 PM Print | Font Sizes:  Normal Text Large Text

Auditor general probing Ontario Northland sale

Nipissing MPP Vic Fedeli has convinced the provincial auditor general to probe the government's ongoing divestment of the Ontario Northland Transportation Commission.
Nipissing MPP Vic Fedeli has convinced the provincial auditor general to probe the government's ongoing divestment of the Ontario Northland Transportation Commission.

Having Ontario's auditor general formally investigate the Liberal government’s ongoing divestiture of the Ontario Northland Transportation Commission (ONTC) “is a game changer,” said Nipissing MPP Vic Fedeli.

“This is a really big monumental move and a big win for the North.”

In early September last year, Fedeli wrote to the auditor general and asked him to intervene. He was told to attend a public accounts meeting, but the legislature was prorogued shortly after.

“(Recently) the committee was formed and I attended their first meeting, and gave them notice of motion that at their next meeting, I would bring a motion with respect to the auditor getting involved with Ontario Northland.”

On March 6, the motion was passed. Fedeli said the auditor expects to have his report done by late summer and will present it to the legislature in September.

Last March, the government announced it was divesting all business lines of the ONTC. To date, only Ontera, the telecommunications branch, was put out to tender and the successful bidders are currently under review.

“Instead of making numbers up, which I believe the Liberal party did, they should have had a value for money audit or at least a divestiture audit done back then,” Fedeli said. “It took this long for it to happen but it is underway and effective immediately.”

The Ontario Northland is headquartered in Fedeli's home riding of North Bay.

The government indicated in March of last year that the annual subsidy was $100 million. Fedeli said in the last 10 years, it has been more in the $20 million range.

“Last year was $100 million but it was a lot of one-time costs. They used only that year but the average was $44 million.

“I maintain that with all the issues surrounding pensions owed to former employees, severance packages that will be owed, ongoing subsidies for the Polar Bear Express and smaller bus routes and environmental liabilities, will mean there are no savings to be had through this fire sale.

“It’s possible that severance packages that could result from the ONTC divestiture could total $450 million.”

Fedeli is requesting that the divestiture process be put on hold, including Ontera, and that a strategic asset review of all the divisions of the ONTC be conducted. The rail freight division should remain in public hands, he insists.

“This is a strong signal from the legislature that we want to know the results of the report before you do anything else, so we are hoping the government will pause on the Ontera sale as well,” he said.

“I am also hoping, now that the auditor is going to step in, common sense will prevail and they will indeed do as we ask and hit the pause button. While the auditor is doing the math on the fire sale, the government could be investigating the labour unions’ new deal. It can be done simultaneously.”

The new deal involves transferring the ONTC’s railroad and other assets from the provincial government to a new ports authority. 

“We did a tour of all the stakeholders, something the Liberals never did. MPP Norm Miller (Parry Sound – Muskoka) and I travelled 1,600 kilometres and visited stakeholders, came back, put our package together, and that took half a year,” Fedeli said. “Then McGuinty prorogued and we lost another half a year.

“The auditor now has the ability to look at the liabilities the government will face if they continue with their fire sale, and tell us just how much those will really cost.”

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