Ontario's top bureaucrat – who repeatedly warned the Liberal government that its timeline for balancing the budget will require painful cuts to services – is leaving his post.
Peter Wallace, whose blunt assessments of the Liberals' fiscal plans are said to have caused tension with cabinet, found himself thrust into the spotlight several times over the last year.
He played a key role in exposing a scandal concerning the alleged destruction of documents in former premier Dalton McGuinty's office. Then, a legislative committee uncovered his stark confidential memos spelling out the tough austerity the government will have to implement if it intends to erase the red ink by 2017-18.
A career civil servant with more than three decades on the job, Mr. Wallace had been secretary of cabinet since late 2011. The powerful position entails managing more than 60,000 public servants, advising cabinet and acting as the chief link between the bureaucracy and political decision-makers.
Mr. Wallace will take up a fellowship at the University of Toronto's School of Public Policy and Governance, the government announced Wednesday, and will be succeeded by Steve Orsini, currently the top public servant in the finance department.
Premier Kathleen Wynne's spokeswoman said Mr. Wallace was departing his post voluntarily.
His departure comes at a crucial time for the government. Ms. Wynne won a legislative majority this month largely by promising to protect and expand public services. But in briefing notes, e-mails and memos, Mr. Wallace had told the Liberals their own fiscal planning would actually require them to slash program spending.
Separately, he told the province's information and privacy commissioner last year Mr. McGuinty's last chief of staff, David Livingston, had once asked his advice on wiping computer hard drives. According to his version of events, Mr. Wallace was incredulous Mr. Livingston would even contemplate such a thing, and he advised him to preserve records.
The revelations touched off a police investigation into Mr. Livingston, who is alleged to have brought in an outside IT consultant to erase the computers, which the opposition parties charge may have contained information on the billion-dollar cancellations of two gas-fired power plants. Mr. Livingston, who has not been charged with anything, has maintained his innocence.
An opposition-controlled committee requisitioning government documents discovered Mr. Wallace's advice to cabinet on the province's finances.
In one memo from late 2011, Mr. Wallace wrote that the government's deficit-cutting targets were so ambitious that, even if it laid off every case worker and administrator in the Social Services Ministry, it would still not be enough to meet them.
"This is so far beyond administrative or efficiency savings it's not even funny," Mr. Wallace wrote. "More directly, this is more gravy than [Toronto Mayor Rob] Ford even promised to look for."
In a presentation to cabinet in early 2013, around the time Ms. Wynne took office, the civil service told the Liberals that getting to balanced books by 2017 would require cutting per-capita program expenses by 12 per cent over five years: "No other Canadian jurisdiction, over their anticipated time frame to balance, projects a decline in real per capita program expense of this magnitude," notes for the presentation read.
In his advice, Mr. Wallace never endorsed austerity as a good policy option. Rather, he told government that it would be required to meet its targets. The Liberals have continued to insist on the 2017-18 time frame, and put it in their election platform.
Ms. Wynne has signalled she will get serious about balancing the books, hiking income taxes on high income earners, considering selling off assets and assigning Deputy Premier Deb Matthews to hunt for savings.
Mr. Wallace made his most recent public appearance Tuesday, when he swore in the Premier and her cabinet.
"I want to thank Peter Wallace for his exemplary service to Ontarians and his leadership as a public servant for more than three decades. His advice, experience and professionalism have been invaluable to our government and have contributed to many of our accomplishments," Ms. Wynne said in a statement.