Ontario's Auditor-General is investigating the loan at the centre of a controversial bailout by the Liberal government of a troubled real estate project.

What's more, the probe is part of a sweeping look at loans doled out by provincial agency Infrastructure Ontario, according to a letter from Auditor-General Bonnie Lysyk to the NDP, obtained by The Globe and Mail.

The revelation comes just eight days before a deadlocked provincial election, in which Kathleen Wynne's Liberals are battling accusations of wasting taxpayer money on several projects – including hundreds of millions on MaRS – as they seek to hold onto power.

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The letter, dated Tuesday, was a response to NDP campaign co-chair Gilles Bisson, who asked the Auditor to look into MaRS. Ms. Lysyk indicated she was already investigating the matter.

"As it happens we are currently conducting an audit of Infrastructure Ontario's Loans Program and the scope of that audit includes the loan made to facilitate completion of the MaRS phase 2 building, the subject of your concerns," Ms. Lysyk wrote.

She said the results would be published as part of her annual report – which rounds up several audits – in December.

"You have raised a number of questions that we will consider in drafting the chapter covering this audit," Ms. Lysyk wrote.

In e-mails to The Globe, Ms. Lysyk confirmed that her office is looking into IO's lending program and "at all aspects of the loan."

The province loaned MaRS $234-million to help finance the construction of a new office tower attached to its current facilities in downtown Toronto. MaRS, a non-profit research and innovation organization, also received a $71-million taxpayer-funded grant.

But the organization had trouble finding innovation companies to fill the tower, leaving MaRS and a private real estate company unable to pay back the loan. The Liberals stepped in, working out a $317-million deal – which includes the loan – to buy the tower and consolidate government offices in it.

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The agreement, which was being discussed at cabinet when the election was called, was exposed last week when the Progressive Conservatives released confidential documents they said were obtained from a whistleblower. The Grits have said the deal is not final, which is why it was kept secret, and the final cost has not been worked out.

Leader Kathleen Wynne has argued the deal would be good for taxpayers, as it would consolidate office space. The documents indicate taxpayers may be on the hook for more than the $317-million. The province has also agreed to cover MaRS's operating deficit for several years and to sink money into setting up offices in the tower.

The Liberals have been under fire on spending matters, having spent a billion dollars cancelling two gas-fired power plants, and squandered more on failed attempts to build an electronic health records database. In his letter to Ms. Lysyk last week, Mr. Bisson asked her to determine whether the government really needs the MaRS office space, as well as whether the province paid fair market value for the tower.

Charles Finley, a spokesman for MaRS, said the Auditor-General has not contacted the organization directly about the Infrastructure Ontario loan. He declined to comment on the probe.

With a file from Kelly Grant