Wynne welcomes report saying pension surplus counts toward province’s bottom line
Finding gives Liberal government ammunition in dispute with Auditor General, who concluded last year that the money, not readily available to the province, should no longer be listed as an asset.

thestar.com
By Rob Ferguson
Feb. 7, 2017

Premier Kathleen Wynne is welcoming a report from four accounting experts that says a $10.7-billion pension surplus can be counted as an asset on the province’s bottom line.

The finding gives her Liberal government ammunition in a spat with Auditor General Bonnie Lysyk, who concluded with her staff of accountants last year that the money, which is not readily available to the province, should no longer be listed as an asset.

“There was a conflict between the advice that the auditor general is giving us and the advice that our officials were giving us,” Wynne said Tuesday.

“We sought independent third-party advice and you know we have to take that independent advice very seriously.”

The report, on which the auditor general was briefed last week, will be made public later this month.

Lysyk’s ruling, which reversed 14 years of counting the surplus as an asset, became a point of contention because it affects the size of Ontario’s deficit, which Wynne promised to eliminate by 2018 when she seeks re-election.

Without the surplus from the Ontario Public Service Employees’ Union and Ontario Teachers’ pension plans, last year’s deficit was $5 billion, not the $3.5 billion the government calculated.

Lysyk’s new interpretation of the accounting treatment for the money came after her office took a closer look at the government’s claim on the pension plans it co-sponsors.

The change prompted opposition parties to warn the government suddenly had a massive hole in its budget, but Finance Minister Charles Sousa maintained that the budget would be balanced on schedule regardless.

The practice of counting the pension surplus as a government asset dates to the previous Progressive Conservative government.

“The people of Ontario have to ask themselves who are they going to believe: the independent auditor general or a scandal-plagued Liberal government?” said Progressive Conservative MPP Vic Fedeli, his party’s finance critic.

“The Liberals continue to be mired in waste, mismanagement and scandal, and now they’re looking for anybody that will back up their opinion in their fight with the auditor general.”

He noted the auditor refused to sign off on the government’s financial statements for the fiscal year that ended last Mar. 31, marking a first in Ontario history.

“That’s a very serious step,” Fedeli said, adding that raises questions for credit-rating agencies examining Ontario’s finances and debt load.

Lysyk declined comment until the report is released, but told the Star’s Martin Regg Cohn on Monday that she is sticking to her conclusion.

Wynne said the expert panel included four people with “vast experience” on such issues.

The panelists are: Tricia O’Malley, chair of the Canadian Actuarial Standards Oversight Council; Murray Gold, of Koskie Minsky LLP, a law and pension consulting firm; Uros Karadzic, a partner at Ernst and Young, and Paul Martin, a controller with the government of New Brunswick and a former partner at accounting giant Grant Thornton LLP.

“What we have to do as government is get the best advice that we can,” Wynne said Tuesday.