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Over the next decade, the Ontario government plans to spend $17 billion rehabilitating existing infrastructure, mostly on roads and bridges, and $31 billion on new infrastructure, mostly on public transit — much of the latter in the Greater Toronto and Hamilton Area. For some weary commuters, the promise of relief might be one of the few remaining attractions Premier Kathleen Wynne’s phenomenally unpopular administration has to offer — assuming, of course, they have some degree of confidence their money will be spent properly.
Page 496 of Auditor General Bonnie Lysyk’s latest report, released Wednesday, has something to say about that.
The scene: the Pickering GO station. Metrolinx was to build a pedestrian bridge across Highway 401. Not a herculean feat, one might have thought. Alas the winning bidder “had no experience in installing bridge trusses” — which is “something that a contractor constructing a bridge would be expected to know how to do,” Lysyk’s report dryly notes.
After the contractor “installed one truss upside down” — no, seriously — Metrolinx essentially took over the project. But it paid the contractor the full $19-million for the first phase of the project anyway. Then it gave the same contractors the contract for phase two — hey, it had the low bid! — and lo and behold they pooped the bed again, damaging glass to the tune of $1 million and building a stairway too wide to accommodate the planned cladding.
At this point, according to the Auditor-General, Metrolinx terminated the contract. It paid 99 per cent of the bill anyway. And later — no, seriously! — it gave the company another $39 million contract. “Metrolinx lacks a process to prevent poorly performing contractors from bidding on future contracts,” the report observes. Transport Minister Steven Del Duca said a new “vendor performance management system” would do just that, but one wonders why something so fancy-sounding was necessary to perform such a basic function. (Metrolinx spokesperson Anne Marie Aikins disputes the decision-making timeline in the report; according to hers, the contractor’s ineptitude was unknown when further work was awarded.)
That footbridge is the most spectacular item in the report’s cavalcade of nonsense, but not by all that much: other concerns at Metrolinx include failing to bother trying to recover cost overruns due to design consultants’ errors and late project delivery. It basically cuts cheques to CN and CP with no idea whether it’s getting what it pays for.
Over at the Ministry of Transportation proper, Lysyk found a similar brand of chaos. Would it surprise you to learn that newly laid highways are supposed to last for 15 years? Not your fault. They rarely do. Some of them last as little as five years, Lysyk found. Cracks often appear within one or two. The government paid $12 million to prematurely repair a section of Highway 403 that cost $23 million to pave in the first place, Lysyk found — including a bonus to the contractor for using good-quality asphalt, which it was supposed to do anyway. That was far from a unique case.
The culprit? Bad asphalt. Tons of it. Bad asphalt is much cheaper than good asphalt, the report notes. There are tests for bad asphalt, of course, but for reasons one couldn’t begin to speculate about the Ontario Hot Mix Producers Association (OHMPA) and the Ontario Road Builders’ Association (ORBA) — which enjoy a “collaborative” relationship with the government — strongly suggested the ministry not implement them. So for many years, against staff advice, it didn’t. It still hasn’t implemented both tests across the board.
Contractors themselves are in charge of collecting asphalt samples, delivering them to a lab and reporting the results. To the shock of absolutely no one, some took liberties. In 2014, the report notes, a “whistleblower explained that the contractor would submit good samples for testing purposes but lay poor-quality asphalt on highways.” (It doesn’t exactly take Moriarty to get one over on this gang.)
This confirmed longstanding suspicions at the Ministry, who alerted its Forensic Investigation Team, which didn’t do anything. “When we met with the OPP, they told us that they thought the information provided by the whistleblower was credible,” Lysyk reports, “but they did not conduct an investigation as they were waiting for the Ministry to provide additional information if it wanted to start an investigation, which it did not.” Oh well.
Apropos of nothing, the OHMPA gave $9,740 to the Liberals in 2015; the ORBA gave $14,001; combined, the top 10 provincial contractors, four of whom are also asphalt suppliers, gave $101,255.
On the bright side, the Ministry reports it has “already implemented a province-wide trial” — best not move too fast! — “where the care and control of samples was undertaken by the Ministry or its agents.” Del Duca said that would be general practice as of 2017. He disputed that bonuses were paid merely for fulfilling contractual agreements, but the ministry did commit to “review our current practice” on the matter. (It actually “stopped tracking the amounts” of bonuses paid after 2012, Lysyk found, “because of increased workload and lack of time.”)
Progressives like to insist concerns about government waste and spending are overblown, or at least hardly unique to the public sector. And indeed it’s important to remember that many projects do get built competently, on budget and on time.
But what we see here is a failure to implement or enforce even the most basic management controls or safeguards over public money. With the gas-plant stench of political shamelessness and corporate donations hovering over Queen’s Park, it is only logical for people to be furious.
Lysyk’s exhausting 800-page report also found, notably, that the government was spending millions on advertising that promoted itself; and that it still hadn’t managed to roll out electronic health records completely after 14 years and $8 billion spent. It would be remarkable, surely, if it ever got a chance to declare mission accomplished on that file — but these Liberals have won remarkable elections before.
Ontario Power Generation says salaries for its executives are expected to rise by up to $8 million in the next few years as the provincial government lifts a public-sector wage freeze.
Meanwhile, transit agency Metrolinx is proposing to boost its CEO’s pay by up to $118,000, which would see him earn a maximum of $479,500.
All broader public sector agencies are being tasked with posting their proposals for new executive compensation packages under guidelines that came into force in September.
The government sent colleges back to the drawing board after concerns were raised about the salary comparators that they were using for proposals that would boost presidents’ salaries by up to 50 per cent.
OPG landed on a maximum salary of $3.8 million for its CEO — who currently earns $1.5 million — though it says it is setting the target significantly lower.
Spokesman Neal Kelly says the CEO’s salary will actually remain unchanged for three years, but the other approximately 80 executives will now be eligible for merit pay, and when the new program is fully implemented in 2019, that’s expected to cost an extra $6 million to $8 million annually. Kelly said OPG has saved $10 million in staff reductions since 2012.
OPG, which operates two nuclear sites, was granted permission by the government to use private-sector comparators, as the size and scope of its operations are “more complex than those of many other public sector organizations in Canada” and it has primarily recruited its executives from the private sector.
A spokesman for Energy Minister Glenn Thibeault said the safe operation of Ontario’s large nuclear generating stations requires “technical experts of the highest standard.”
“We fundamentally believe Ontario Power Generation must be able attract and retain this highly specialized expert talent to ensure the safety of Ontario’s nuclear power generation system and deliver key nuclear projects such as the Darlington Refurbishment,” Dan Moulton said in a statement.
OPG is responsible for more than $40 billion in assets, and has $5 billion in annual revenue and more than 9,000 employees.
NDP finance critic John Vanthof called it a “slap in the face” to Ontario families that a CEO of OPG could be eligible for a salary of up to $3.8 million.
“Most Ontarians haven’t seen a real increase in pay in years, despite soaring utility and housing costs,” he said in a statement. “It just isn’t fair for the executives of our public utilities and institutions to be raking in huge salaries, raises and bonuses while so many Ontarians are struggling to put food on the table.”
Metrolinx spokeswoman Anne Marie Aikins says the agency’s human resources committee will make a recommendation to the board of directors on where — within the $375,300 to $479,500 range — the president’s salary should fall once the public consultation is over.
Progressive Conservative transportation critic Michael Harris said these raises could see executives who were recently called on the carpet get 30 per cent raises.
“When everyday Ontarians see single-digit increases at best, (Premier) Kathleen Wynne is rewarding these executives to the tune of hundreds of thousands of dollars, potentially,” he said.
Metrolinx came under fire in the latest auditor general report for not holding contractors and design consultants accountable for projects that were late or inadequate and still awarding new work to contractors that had performed poorly in the past.
The auditor said one contractor working on a pedestrian bridge over Highway 401 in Pickering installed one of the bridge trusses upside down, but was still paid millions of dollars. Metrolinx disputes this, saying it was a misaligned support beam and not an upside-down truss.
Metrolinx is also dealing with a troublesome joint roll-out of the Presto card system with the Toronto Transit Commission, with delays and technical glitches.
A spokeswoman for Transportation Minister Steven Del Duca said Metrolinx’s proposal is only the first step of the process and no decisions have been made.
Public sector agencies are required to post their executive compensation proposals publicly for 30 days of comment. Metrolinx’s proposal is available in a link on the homepage of its website.
OPG’s public comment period is over, but it received four public comments.
Ontario’s new executive compensation framework caps salaries at the 50th percentile of “appropriate comparators.”
QMI_LFP20150513MH80Michelle Siu for the National Post