Premier hopeful for Samsung deal Tyler Hamilton - November 1, 2009

Premier Dalton McGuinty is playing down a major cabinet rift that threatens to scuttle a multi-billion-dollar green energy wind turbine deal with South Korean industrial giant Samsung Group.

As first revealed by the Star, McGuinty's cabinet is warring over the landmark agreement to manufacture renewable energy equipment and develop wind and solar farms in Ontario, which could create thousands of new jobs.

"I can't speak to what goes on in cabinet and in caucus and I can say that negotiations continue and they're all looking very promising," the premier said on Saturday. "There are ups and downs associated with every ... major potential contractual arrangement. We want to make sure that we get it right and we're going to take the time to do that."

Deputy Premier George Smitherman, who is also energy and infrastructure minister, maintains the deal is a good one with Samsung investing in the range of $6 billion to $7 billion.

"In terms of direct and indirect jobs associated with that investment, we're looking at a job count of more than 15,000, so it's a very exciting and tangible piece of progress toward the green economy," Smitherman said in an interview.

But senior Liberals are raising red flags over the deputy premier's pet project, which sources say could cost taxpayers "billions" in subsidies for Samsung.

Tensions came to a head in an explosive cabinet meeting Wednesday with many ministers strongly urging McGuinty to reconsider the scheme, which they denounced as politically problematic.

"The optics on this deal are terrible," said a high-ranking source. "We could be on the hook for billions."

Smitherman dismissed such concerns. He said: "This is very bold and ambitious and new, so anytime you have that kind of a dynamic some people who are inclined maybe to nervousness pose questions." He said the deal has "advanced substantially" and predicts a final announcement to be made by the end of the year.

While some rival energy developers complain the special treatment for Samsung is unfair, Smitherman said the "economic" adder – an incentive as part of Ontario's deal with Samsung – is open to others.

"Anyone who is prepared to make investments on that scale of course warrants our very substantial interest," he said.