Liberals bury a $200,000,000 “tax payer debt” until AFTER the election?

Why is Ontario so deeply in debt?

With the new minority Government now installed at Queen’s Park, possibly the first order of business for the opposition should be to start to “audit” the past 8 years of massive tax payer’s $$$ spending by McGuinty and Gang.

Ontario is in pretty bad shape financially and up until now nobody has been able to crack open the books to see how badly our tax money has been handled.

Huge agencies and organizations have been established by the Liberals all dedicated to making sure Ontario becomes number One in North America in Renewable Energy!  How’s that worked out?  Loss of prime farmland, loss of homes and loss of health have been the results of the madness called Industrial Wind Development  across rural Ontario.  Oh yeah, and huge price increases in Electrical bills with massive sell offs of excess electricity to our neighbours south of us.

The following post can pretty well sum up all that’s wrong with Ontario and how it’s been managed for the past 8 years by the now, MINORITY Liberals.

The electorate has given the PC’s and NDP the ability to question Government spending and advise their electorate on what the hell has been going on inside Queen’s Park..so now use that and report back to US.  It’s the least you can do!

Liberals are from MaRS, colour them red

Turning a $200,000 savings into a $200 million cost for taxpayers

October 28/2011 Parker Gallant

In a July article I touched briefly on MaRS, a think tank originally created by Ernie Eves when he was Premier of Ontario. The MaRS Discovery District officially opened as a charitable institution in September 2005 thanks to $70 million taxpayer dollars. It was touted as a way to capture the $1 billion in science and technology research spending in the medical sector.

Financial information on MaRS is not posted on their website, however a filing with the CRA for their year ended December 31, 2010 shows revenue of $20 million and expenses of $29 million for a loss of $9 million.. The province contributed $6 million of the $20 million versus $9.5 million in 2009 and $13 million came from rental income. Charitable contributions were $337 thousand. MaRS lost $9 million in 2010 and their net worth had shrunk to $27 million meaning they had gone through $43 million of their taxpayer funded start-up capital. The filing disclosed MaRS had 53 employees and dispersed a total of $35 thousand in research grants and scholarships.

A July 26, 2011 Star article said MaRS would expand by constructing a $344 million 20 story building. The then Minister of Research and Innovation, Glen Murray was quoted in the article announcing it would create 4000 construction jobs and that; “It will more than double the number of researchers and innovators and entrepreneurs at MaRS from 2,300 to more than 5,000,” The article also said; “Infrastructure Ontario, the arm’s-length government agency that specializes in private-public partnerships, has loaned MaRS $230.3 million for the development.”

How could a $344 million dollar project be financed with a $230 million loan unless the mortgagor had the $114 million available to cover off the difference? I fired off enquires to the Ministry and what I got back was this; “it is the revenue from the tenants of MaRS Phase 2 that will pay off the loan to Infrastructure Ontario – and, ultimately, allow MaRS Centre Phase 2 to pay for itself.“ MaRS has lost $43 million of taxpayer funds since 2005, has a net worth of $27 million and will be able to magically come us with $114 million-how?

A visit to the MaRS website says MaRS “centre is at full occupancy, and cannot meet the increasing demand” and goes on to say; “The MaRS Centre has been at capacity since it opened six years ago, when we first started”. MaRS would appear to be simply a poorly managed property development company located close to Queen’s Park with a penchant for viewing success as; losing money and being financed by taxpayers.

The other question was what is Infrastructure Ontario and where did they find the funds to finance this building. As it turns out Ontario Infrastructure Projects Corporation (OIPC) is another Liberal creation established in 2005 designed to “provide financing for municipalities, universities and other public bodies in the Province ofOntario.” Up to March 31, 2010 OIPC had accumulated debt of $3.5 billion and a deficit of $196 million. All of their financing was either borrowed directly or guaranteed by the Province. Recently (June 2011) OIPC merged with Ontario Realty Corporation, another crown corporation but retained their name.

The March 31, 2011 consolidated statements magically made that $196 million negative net worth disappear. They created “loan remission revenue”. Note 13 of the audit report makes it clear that OIPC had a mini debt restructuring. The note states “During the year, Infrastructure Ontario was granted a remission of $200 million on the Province of Ontario loan,” (my emphasis). Now the balance sheet shows a small positive net worth but debt levels climbed to $4.2 billion. An exchange with OIPC enquiring about staffing levels (480 with 199 on the “Sunshine List”) generated a response that said the merger “is generating $5 million in savings to the province this year as a result of its merger”.

Forgiving $200 million of their debt only enables them to generate $5 million in savings but the interest rate on their debt averages about 3.5% so it should have saved them $7 million without any other cuts. The announcement by The Minister of Finance in March 2011 about scrapping a “dozen redundant agencies” has in this case cost the taxpayers money through additional provincial borrowings. This is how the press reported on the scrapping of those agencies: “The Liberals’ elimination of the 13 obsolete agencies — including melding the Stadium Corporation of Ontario, which managed the province’s interests in the SkyDome, into a previously announced hybrid of Infrastructure Ontario and the Ontario Realty Corporation — will save only $200,000 a year.” Instead of saving $200,000 this merger cost $200 million. How much did scrapping the other 11 “redundant agencies” cost the taxpayers?

Some of the 53 jobs (21 on the “Sunshine List”) MaRS reported in the CRA filing were highlighted in a Toronto Sun August 3, 2011 article by J. Jenkins where he wrote the top 7 jobs at MaRS jumped by a minimum of 15% and the CEO received a 22% increase to $533,000. This happened despite Finance Minister Dwight Duncan’s March 25, 2010 budget announcement of a pay freeze.

Thomas Rand, received a 61% increase and his bio makes him out as a wunderkind; he founded Voice Courier Inc. (VCi) led its expansion to three countries, with revenue in excess of $20 million US annually and “it was profitable for each of the 12 years it was under his control, and was sold in the spring, 2005.” Randappears in several videos posted on the MaRS website. He is “active in Cleantech venture capital, technology incubation and commercialization and public advocacy.

Tom is the Cleantech Practice, Lead Advisor at the MaRS Discovery District and sits on the board of a number of clean energy companies and organizations, including Morgan Solar.” All that and a 61% bump in his salary from this charity! Rand ranted on Tyler Hamilton’s blog on the wonders of the Green Energy Act in the middle of the election pushing the Liberals. What “cleantech” has in common with medical research is an unknown however it seems to have become a significant part of the MaRS program. One has to wonder how the marriage ever came about and just who was behind it.

MaRS has 186 videos on the subject of “cleantech” with appearances from most of the proponents of the Green Energy Act (Act) all unabashedly claiming their respective roles in it’s creation. This sector, led by Mr. Rand includes videos by Kristopher Stevens of OSEA, Marion Fraser, Brent Kopperson, Deborah Doncaster, Paul Gipe, and Rick Smith all of whom were key players in lobbying the Liberal government in a push to create the Act!

Having visited MaRS and Infrastructure Ontario I am now convinced we are indeed on the “red planet” and the survival of it’s inhabitants are dependent on the largesse of the taxpayers of the province including lending $230+ million via OIPC (who have lost $200 million in just 5 years) to MaRS (who have lost $43 million in 5 years). All this to allow MaRS to continue its role as a landlord under the guise of medical and cleantech research.

In the banking business we would call this “creative accounting” but some of the above are much more creative!

Parker Gallant,
October 28, 2011