The Liberal government was warned more than two years ago about Ontario’s dire financial situation but chose instead to feed the public “fairy tale” predictions, the Tories say based on internal documents.

MPP Rob Leone said Monday the warnings were spelled out in rather colourful terms by then deputy finance minister Peter Wallace that it would take dramatic action or far more than the Grit government seemed prepared to do.

“This is so far beyond administrative or efficiency savings it’s not even funny,” Wallace said in a memo to the government, which was contained in thousands of gas plants documents turned over to opposition parties. “More directly, this is far more gravy (than Toronto mayor Rob) Ford even promised to look for.”

“The McGuinty Liberals have refused to listen to the experts, jeopardizing the economic health of this province,” Leone said, noting that Wallace “told the premier that the fiscal context was ‘screwed up’ and described the Liberal plan for dealing with the economy as ‘toast.’”

The estimated deficit for fiscal year 2012-13 is 9.8 billion.

Leone said Wallace, who is now secretary of cabinet, laid out a series of options for getting the books balanced “but what did this government do? Not only did they ignore the recommendations, they told Ontarians a different story that Ontario could get back to balance on the plan the Liberals were selling.”

Wallace comments were a response to comments circulating at the time from economist Don Drummond, who was hired by the Liberal government to make recommendations to reform the public service. His report came in February 2012, which called for a cumulative decline in spending of 27 per cent.

A spokesperson for Finance Minister Charles Sousa said the emails are old and not relevant.

“The specific emails referenced today from Secretary Peter Wallace are more than two years old, when he served as Deputy Minister at Finance, and much has changed since that time,” Sousa’s press secretary Susie Heath said in a statement.

She said the government plan outlined in the 2013 budget to balance the books by 2017-18 “has been affirmed by all major credit rating agencies and has resulted in five straight years of beating our deficit reduction targets.”

“We will remain focused on continuing to beat our fiscal targets — as we have done for the past five straight years.”

Cabinet ministers have privately complained that many of the documents the opposition parties are now picking through have nothing to do with the investigation into the $585 million decision to close and relocate two gas plants.

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Leone told reporters the fact is the Liberal government “has been telling us a fairy tale story about the budget while their own top bureaucrats and experts do not even believe (it).”

“The stark reality is everything is not OK,” he said.