The Agenda with Steve Paikin (Audio) - The Auditor General's Verdict on Ontario Spending

Episode Date: December 11, 2024

Once a year, Ontario's Auditor General takes a deep dive into several aspects of provincial spending. The highlight of this year's report: how the Ford government managed the situation on Toronto's waterfront. The verdict: not great. Shelley Spence, who last week issued her first ever report as the province's newest auditor general, joins Steve Paikin to discuss this and more. See omnystudio.com/listener for privacy information.

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on Toronto's waterfront. The verdict, not great. Let's get into the details with Shelly Spence, who last week issued her first ever report as the province's newest auditor general. Welcome to the job, welcome to our studio. Thank you for having me. It's nice to meet you here.

Okay, I think it's always good to start off with a reminder of what your job actually is. And let's start with this. You are hired by the legislature, not the premier. What's the difference? Oh, it's a big difference. I'm hired by, first of all, I interviewed with a subcommittee of the Public Accounts Committee and then they bring forward their recommendation to the full legislative assembly

and then it is brought forward by the speaker for a vote and they vote on making me the auditor general. Do you know how many votes you got? Unanimous. You were unanimous? Yes, I was. I guarantee you, you are the only thing they've all agreed on then in the last six years or so. OK, you've got a 10-year term, right?

Yes. Which means theoretically, you can criticize the government without fear that you're going to be fired. Is that right? Yes, it is. Under my act, I can be let go, but it takes quite a majority to be able to do that. And really, as an independent officer, it's very important that you don't feel that pressure

that if you criticize the government that you're perhaps going to lose your job. So it helps with the independence, and it is similar for other officers of the legislature as well. We're appointed for a term, and in my case it's non-renewable, and it is 10 years, which is a very long time, which I'm excited about because there's a lot we can do in 10 years. There is another sort of spending watchdog at Queen's Park called the Financial Accountability Office, and they can respond to MPPs who request that they undertake investigations.

Do you do that too? Do you respond to MPPs who want you to look into things? So, no, we're not obligated to do that under my Act. We are obligated if, or we can be asked by a minister or the Public Accounts Committee to do a special audit. It's still up to my office to decide whether we can take that on. I would generally say if I was asked, I would definitely do the work,

but we are not there to do the work if any MPP asks us. Okay, so you undertake investigations, your office does, and you, in your wisdom, decided that there was something worth investigating at Ontario Place. Why did you decide to look into that? So I just want to have coined that it is called a performance audit.

We're not investigators. So we audit and we audit against criteria. We take a look at what we would expect to see with a major development project such as that. What are best practices? And we measure what happened against that. And what did you find? Well we found that during the call for development process they had some costs for site servicing about four hundred million dollars that they thought they were going to spend and and

the government had been saying that you know this isn't going to cost taxpayers money. They went through the call for development process where they had some bidders that were going to bid on doing the whole project, the whole island, and others that were just site specific, so like multi-tenants in different spots. And they chose to go in that direction. And what we found is that when they made that decision, which is the government's decision, and that's fair,

they didn't have the information on the fact that they would be on the hook for the public realm costs and other costs that perhaps a master developer that would do the whole island would take on themselves. How do they not know that? I'm not sure. I think they didn't know what those costs would be. They hadn't designed it yet, that kind of thing. So our recommendation is they need to look at implications of decisions. So we might not know the dollars exactly, but we know we're going to be spending dollars.

I don't say this to be a smart aleck. I just say it because I think it's a fact. The current Premier of Ontario tends to like to do business in a rather spontaneous, non-bureaucratic, let's make a deal kind of way. He's a former businessman and he likes his business experience when he brings that to bear in making decisions. When you are the Premier of the Province of Ontario, is it okay to approach business that way?

So I'm not the Premier of the Province of Ontario. I'm the auditor. And as an auditor, I like to look at what processes and policies are in place, what good practices are when you're making a decision like the redevelopment of Ontario Place. So we look for those checks and balances because they do help you make really good decisions, and they also help with transparency, accountability, and fairness. So that's what we looked at when we looked at Ontario Place.

But I think this Premier would argue, if I followed every bureaucratic process that I'm supposed to follow, I wouldn't have the dynamic, innovative result that he believes we will see when this thing is all said and done. We won't have these exciting new opportunities for the waterfront. I think that would be his position. Is he right to take that position? So once again, I'm not the premier and I'm gonna say that

that is, as an elected official of the province, that's their prerogative. But what we look at is what makes a good decision around, or not decision, but what is the information that the politicians need to make a decision. And we found that some of this information is lacking. And we made recommendations that in the future, they perhaps follow a different process than the call for development like a request for qualifications or a request for information so they get those big ideas that they want and

And get global, you know input into the process but then still make a decision in the backup and do a Request for proposal process that has a lot of checks and balances in place to make sure it's fair, open and transparent. I really am not trying to put words in your mouth here, but I really am trying to understand you think a better outcome happens when politicians follow accountable and transparent processes, which if I hear you right, were not followed in this case. Have I got that right?

So I wouldn't say politicians, I'd say the government. So we try and work with the bureaucracy of the government, so the you know deputy minister and down levels, to provide recommendations to help them do their jobs as well as they can. So our report not just Ontario Place but all of them are full of great recommendations that have been accepted by the most part by ministry staff and they're going to work on those recommendations and implement them to make things better. Do you really believe that?

I do. You think they're going to take your recommendations and actually implement them? Because they haven't yet. They haven it- They haven't so far. Well, we just, you know, reported these recommendations. So we'll come back in two years and see how they're doing. And I do know that there's still phase two to go on Ontario Place. So if they, you know, look at those recommendations and bring in those best practices,

then I think that they'll do a good job. You looked into the Science Centre situation as well. Yes. What did you find about the potential move of the Science Centre from Don Mills down to the waterfront? So our office last year did a report on the Science Centre on the business case basically to either renovate the old centre or to move to the new centre. And that report at that time had a cost benefit analysis done, etc.

and the conclusion and decision of the government at that time was to move. And so fast forward to now, we know that the cost of the Science Centre to move it have gone up $400 million and some of that includes some scope change, which means they made decisions after the fact to put in some ramps for school buses etc but also that costs for construction do escalate over time so we also realized that the renovation of the old Science Center the cost would have also gone up we don't have that analysis so we couldn't really compare it in today's dollars but you did conclude that it wouldn't be 400 million bucks we couldn't really compare it in today's dollars. But you did conclude that it wouldn't be 400 million bucks.

We didn't look at the renovation costs again because the government had not done that analysis yet. But can we say it would have been cheaper if they just stayed where they were as opposed to trying to move things down to the waterfront? What I can say is that in the last case it was pretty even. In this case there is some more scope in the new science centre than what they had when they were first making that decision. I'm going to ask this very carefully here. Should we question whether the government has been honest with us about the costs of putting a new science centre on the waterfront?

So that's a good question. We do look at the analysis and we looked at those costs and you know, they are the experts at the Ministry of infrastructure and infrastructure Ontario that put together these these cost estimates so we look at them and they are constantly up updating them and making sure that they have the latest and greatest of the costs. And they do a good job at keeping track of those costs. Did you examine whether the old site could still have been viable had they wanted it

to be? So that was our report last year. And definitely we said, you know, the cost, if you take a look at the cost of the two different options, they're very close. And then the government made the decision to move. Because again, I ask you that question because the government's position has been, we have to move to the waterfront because the old site was completely unviable, would have required a fortune going into it in order to keep it up to standards, and therefore we needed to

move to the waterfront. It sounds like what you're telling me is that's not quite accurate. Can I say that? So the government themselves released the business case around this and when you look at the costs they were a little less expensive to move but not remarkably less expensive. Not remarkably. Okay let's go on and talk about another thing that you looked into, not investigated, but what do you say? What's the word? Performance audit. A performance audit?

Or audited. You did an audit on this. Government advertising. You can't watch a hockey game, an NFL game. You can't watch anything these days. Certainly sports on TV without seeing a commercial for the province of Ontario. When you looked into those ads, what did you find? Well, overall, it's under my act again that we report on government advertising.

And sorry, it's under the Government Advertising Act, that we report on the advertising of the government to make sure that it is following the rules of the act. And the new act, the act had been changed in 2015 by a former government. And at that time, a lot of the things that we were looking for in the ads were taken away. So we can look at an ad and say it's partisan if there's a member of the political party there, if it has the colors of the political party, and a few other things.

And that's about it. So when we are asked to pass these ads to be aired. For the most part, most of them get through. And what we did in our report, we noticed they spent $103.5 million this year, which is the highest ever. And of that, about 62% of the ads would not have passed the former act and the rules that were in that. But that's the former act. Yes.

So they do pass the current act. Yes, they do. Now the former act, I think it was the previous Kathleen Wynne government that changed the rules because they thought that the rules were too strict. And I think I can remember that the Auditor General of the day back then went to the Wynne government and said, you've got a red apple in that ad, red means liberal, therefore that's too partisan. Would you agree that that was a bit too persnickety?

That's folklore from what I know. I don't know if that truly happened. I think there were reasons on both sides as to why, you know, they weren't necessarily in agreement. And so the rules, all I know is that the rules were more lax after that. But I've heard that rumor myself, but I don't know if it's true. It could be folklore.

I remember Deb Matthews bringing it up on the floor of the legislature, I don't know how many years ago, it's probably 10 years ago now, but yeah, she was insisting, she insisted that the auditor gave them H-E double hockey sticks for putting a red apple in the ad. Folklore.

I am not gonna comment on the past. I think that there was a desire at the time for the government to produce certain ads that may not have passed the act. So the act was more lax after that. How granular do you get when you look at these ads to determine whether or not they pass muster? We do have an entire group in my office that does this work and then it's approved through my deputy or myself and so we do have a worksheet we get very granular we look at everything. Like what? So we'll look at whether it's

website material or if it's print media watch those radio you know those TV ads radio etc and we look at it and we mark it against the criteria of the act. And then our team also marks it against the criteria of the old act so that we understand which ones wouldn't have passed in the old act. And it's your view that six out of ten ads would not have passed under the old rules? Or 62% of the costs of the ads. Of the costs. Yes.

Gotcha. Which seems to me, it sounds to my ears like you're saying, these ads were in some cases too partisan. Is that right? The definition of the ad under the old act would have said, does it have information for people in Ontario? Is it informative? Is it educational?

Is it providing information that the people need to know? And you know, if you, we both know that we live in Ontario, that isn't really providing me with information about goods and services. Okay, so free flu shots are available at your local pharmacy is reasonable information for a government to convey. Mm-hmm. Free flu shots from your local pharmacy, courtesy of the munificence of the current government

of Ontario led by Doug Ford, that's not okay. That's not okay under both acts actually. You wouldn't be able to mention the Premier's name. Do you have any recommendations as it relates to whether we need stricter regulations in place on governments regardless of stripe going forward? I do we recommend two recommendations every year actually in our act in our report one is to bring back the definition of partisan from the old act and the other recommendation is

to allow us to review social media advertising because it's not under either of the old act or the new, it just isn't covered by the act. You really want to get into social media? That's a wild west, you know. I mean, it's just a complete toxic lake of you know what. Well most social media is, but when the government is paying to advertise on social media, they have no restrictions on what they can say. So we've seen them ourselves.

Citizens know what I'm talking about. So that isn't covered under the Act. So it can have the name of a person in a political party. It can have political party colours, etc. It's not covered under the Act, so we do not review those ads. So you've made the recommendation to the current government that you think you should have some jurisdiction to look at social media ads and potentially toughening up the regulations of regular conventional advertising as well. Have you heard back from them as to whether they will accept those recommendations?

So to start with, it's kind of rare for our office to ask for legislation changes. But this was about what we did and what we want to do in order to make sure that we were getting value for money as taxpayers out of those taxpayers, out of those ads. So that's why we're making those recommendations. Now the government is not going to take on those recommendations at this time. Have they told you that? Yes, it's in our report. They've said directly, we're not interested right now. Yes for forever or for now if currently

so I Don't have the quotes but if you look in our report there's a response from the government and it basically says that You know, we're not we're not considering that this at this time in fairness to them They're under no obligation to accept your recommendations on anything. Are they they're not that's true And they they can ignore your recommendations At their political peril if you like, right if they think they got a better story to tell them what you're telling then They're free to thumb their noses at you aren't they they? So when we clear our reports with the auditees, we have a lot of back and forth and discussions

with them about our recommendations. Because we really want recommendations that they can do, that are practical for them to complete, that will really move the bar on the services that we're talking about for people of Ontario. So I take the recommendations very seriously in the fact that we're not going to recommend something that isn't going to help or isn't going to be done. So we talk to them, we work with them on the recommendations and then they provide the response.

And usually the response is that they agree. They agree with our recommendation and they'll sometimes detail some of the implementation they've already started doing. And then we come back in two years time to see how they're doing with their implementation. We come back again at five years to see how they're doing and we publicly report that. So they know that we're going to come back and keep on these and keep asking and telling the public whether or not they've done anything about the recommendations. We also have the Public Accounts Committee who does hearings based on our reports and holds the government to account for that at the time by coming to committee and saying how are you doing with these recommendations, are you implementing them, how are you doing,

where are you? You've got any sense about what percentage of recommendations made by your office are actually adhered to by the respective ministries that you audit? So, not overall, but for our five-year follow-up, for example, 42% of our recommendations from five years ago were fully implemented, which isn't... That's not great. It's not great. No. It's not great. So, you know, we do, we wanted to actually spend the time looking at why. And we did look into why and there's some discussion of that in our report. If you look

at the five-year follow-up report, you know, sometimes there's been a change in the program completely. So that's understandable. Sometimes it's two parties need to work together and that's taking a little bit more to do, like two different industries for example, or an agency and a ministry. So there's lots of that and we're looking at that and looking at making recommendations in the future audits to again work with the audit team, make sure that everybody's in agreement that this is going to move the bar and we're making things better in these programs for people of Ontario. Okay, I got a minute left here and I just want to ask you because this was your first, that this is going to move the bar and we're making things better in these programs for people of Ontario. Okay.

I've got a minute left here and I just want to ask you, because this was your first one. How easy or hard was it to get information out of the various ministries that you felt you needed to do your job? So the nice thing about my office is that we do have great access to information and our oddities are very cooperative. Sometimes it takes a little time to dig up the data we're asking for or figure out back and forth what do you need and what do we have. So I would say overall they're very cooperative. I'm imagining a situation where you went in there and demanded some information and somebody

in some ministry said, mind your own business Shelley, and you said, this is my damn business. Did that happen? No, that did not happen. Oh, damn, that would have been so dramatic. They already know that they have to give me the information, so that doesn't happen. Okay, gotcha. Well, this may be the first of who knows how many visits you make here at TVO, but we're happy to meet you this first time.

And we thank you, Shelley Spence, the Auditor General of Ontario, for spending some time with us here at TVO tonight. And thank you for having me and shining a light on our work. Not at all.