Hydro One was left with no choice to pay a $3 million severance package to former CEO Tom Parkinson after he resigned, according to company chair Rita Burak.
At a legislative committee meeting, Burak said there were no legal grounds to fire Parkinson even though his office came under fire for questionable spending.
An auditor's report said Parkinson improperly charged $45,000 in expenses to his secretary's corporate credit card. He left Hydro One's top job in December of last year saying his resignation was with "deep regret."
Despite public pressure to fire Parkinson, Energy Minister Dwight Duncan simply told the board of the government-owned company to "deal with the situation."
Had the board fired Parkinson, provisions in his contract would have resulted in a severance package of $5 million.
Burak defended how the situation was handled, saying the Hydro One board and Parkinson agreed he had to go and the severance meant he would resign immediately.
"The board took the decision that his departure would be in the best interest of the company and under the circumstances applied the severance provisions of his contract which enable us to terminate his employment without notice and without cause for any reason whatsoever," Burak said Tuesday.
The Liberal government came under heavy fire from the opposition parties in December over Parkinson's $1.6 million annual compensation and $3 million in severance.
Opposition parties took aim on the government again on Tuesday after hearing Burak's comments.
"I think what the taxpayers want is a straight answer," Conservative MPP John Yakabuski said.
"If someone resigns because that's their choice, why are we paying $3 million? And if there was enough of a problem going on there that there was a cause, then that's something they should be getting answers to as well."
New Democratic Party Leader Howard Hampton accused the government of trying to gloss over the significance of what happened.
"From the perspective of the reasonable person, the person out there who is paying her hydro bill every month, there is no way this person (Parkinson) should have gotten a $3 million settlement," Hampton said.
"The McGuinty government is trying to put this to bed and the board of directors are trying to put this to bed because they know from the perspective of the reasonable person across Ontario, none of this makes any sense."
Since Parkinson's resignation, Duncan announced a review of executive salaries at Hydro One, Ontario Power Generation and other provincial energy agencies.
Duncan said the government thinks the salaries should be more in line with the public service nature of energy utilities rather than competing with CEOs on Bay Street.
With a report from CTV's Paul Bliss and files from The Canadian Press
