Paul Vieira
National Post
July 30, 2002

One of the closest advisors to Ontario’s premier, Ernie Eves, has been named chief executive of the agency that issues the province’s bonds and manages the former debt of the old Ontario Hydro monopoly.

Michael Gourley is the new CEO of the Ontario Financing Authority (OFA) and the Ontario Electricity Financial Corp. (OEFC). His appointment took effect this month, and the job will pay between $225,000 and $300,000 a year.

Mr. Gourley was the deputy minister of finance, from 1995 to 1998, when Mr. Eves held the finance portfolio under the government of Mike Harris, the former premier. In addition, he was chairman of the Ontario Financing Authority and served as the secretary of the cabinet committee on privatization.

He left government to take on a partnership at PriceWaterhouseCoopers, but resigned this year to form an independent firm. Sources say the firm had one client: Mr. Eves.

Insiders say Mr. Eves relies heavily on Mr. Gourley, and has turned to him, particularly on the electricity file.

"Eves brought him in to clean up the whole mess in respect to Hydro One," a government insider said, adding Mr. Gourley took over many of the responsibilities formerly held by David Lindsay, the CEO at Ontario SuperBuild Corp. and Mr. Harris’s former principal secretary.

A Bay Street insider said Mr. Gourley represents "a safe set of hands" and it’s good news for the province’s electricity industry.

"He’s a well-respected guy," the insider said. "He may bring a bit more sanity to the place. There’s been way too much emphasis on management issues and personalities, and not enough on the stranded debt."

The OEFC is the successor entity of Ontario Hydro responsible for managing the debt of the former Crown-owned power giant. The total debt leftover from Ontario Hydro stands at $38-billion, $19.7-billion of which is currently "stranded" – or what the ratepayers are on the hook for.

The OEFC was required to file an annual report for the 2001-02 fiscal year, ended March 31, by July 1 but has failed to do so. There’s concern the stranded debt has grown. It hit $20.03-billion in March of 2000, after $447-million in "adjustments" to earlier figures. Also, worries abound that the province will get reduced payments from Ontario Power Generation and Hydro One, as required under the province’s reforms to the power sector, because the two companies have recorded weaker earnings over the past year.