CLOSED FOR FUNNY BUSINESS.

They used to say that when you find yourself in a hole you should stop digging, but there’s a new law of holes being written just for Ontario Premier Doug Ford. Elected recently to pull his province out of the fiscal crater it’s in after 15 years of Liberal rule, Ford is now being scolded for easing up on the spadework.

Ford is accused of sending a message that Ontario is “closed for business” because he’s cancelling government renewable-energy contracts and carbon-permit programs that businesses had invested in. But the alternative is not cancelling them, which would mean sinking Ontario further into the muck of the last government’s punishingly expensive climate-control agenda. And if tearing up contracts for new wind farms and cancelling carbon permits leaves businesses nervous about making deals with government, so be it. Let them focus instead on building actual wealth in the private sector.

The Ford government is going to pass laws cancelling renewable-energy contracts for projects still in development. The fact that still amounts to an eye-popping 758 contracts just shows how much deeper Ontario would have otherwise ended up digging its hole even years after voters demanded an end the very Liberal government renewable-energy policies that enabled these lousy deals.

Ontario’s Green party leader (and sole MPP) Mike Schreiner complains that “the only sign out right now says — in big letters — that Ontario is closed for business when it comes to the $7-trillion clean-tech economy.” In truth, business is open to any “clean tech” that doesn’t rely on government support — should such a thing ever exist someday.

Even John Manley, the former federal minister heading the Business Council of Canada, bemoaned Ford’s decision

to outlaw a contract for the deeply unpopular, entirely unnecessary White Pines wind farm in Prince Edward County. Such legislation would “undermine investor confidence and set an unfortunate precedent for how the government intends to deal with the private sector,” Manley wrote Ford last week.

But here’s betting Ford’s planned cancellation legislation — which, importantly, would make it illegal for project owners to sue for compensation — won’t worry businesses that operate in the free market one bit. The only businesses that need to worry are the government cronies whose sweetheart deals have long ripped off taxpayers. Manley should know who they are; a few are his members. If Ontario is “closed for business” to those kinds of inefficient rent-seekers, it can only be better off for it.

Credit where it’s due: Writers here at FP Comment, most notably columnist Lawrence Solomon, have advocated since 2010 that the Ontario government do exactly this. As Solomon wrote just this past May, nothing is “sacred” about unfair contracts with government that harm the public, as these renewable-energy deals indisputably have, burdening ratepayers with what the provincial auditor general estimates would eventually total $170 billion in needless, above-market costs for electricity by 2032. “It is the rule of law that is sacred,” Solomon wrote, “and the rule is clear: governments in our democracy can and do cancel odious contracts.” They have done so while legislating against compensation many times before, he noted, particularly in the energy sector. Interestingly, it seems never to have diminished the appetite

for cashing in on the next sweetheart government deal.

Solomon was backed up on these pages by Queen’s University law professor Bruce Pardy, a former adjudicator for the Ontario Environmental Review Tribunal. Pardy had authored a 2014 Fraser Institute report, “Cancelling Contracts: The Power of Governments to Unilaterally Alter Agreements,” reminding us that “Legislative supremacy is a central feature of the Canadian system of government” — meaning voters have more power than contracts. After all, if governments can’t legislate away bad deals, “then their predecessors can control policy decisions beyond the terms of their democratic mandates.” Jan Carr, the former CEO of the Ontario Power Authority, even suggested that Ontario’s scandalously lopsided 25-year wind and solar contract with Samsung was so galling to industry leaders that cancelling it “might actually increase business confidence.”

If businesses signing unpopular, politically driven deals with the government didn’t anticipate the cancellation risk, they’re not very good at assessing risk. Same for all those now complaining about “worthless” carbon permits they’re stuck with after Ford kept his longstanding vow to cancel cap and trade. Most companies have already been passing along the cost of their 2018 permits to consumers and so will lose nothing. But as The Globe and Mail reported last week, “many firms bought additional emissions permits on the assumption that prices would rise over the next few years and have urged the government to work with them to set a fair reimbursement.”

Yet it’s been clear for years

that the Ontario Liberal government, after a decade and a half in power, was ripe for a fall. It barely hung on as long as it did. But energy analyst Parker Gallant reports that the owners of White Pines wind farm charged ahead when they received a regulatory “notice to proceed,” even after the provincial election writ was dropped. This despite Ford’s strong lead in the polls and his well-publicized promise to nullify such deals. Meantime, companies that bought carbon permits early don’t deserve “fair reimbursement” just because their buy-low speculation flopped. That’s why it’s called speculation.

So save your tears, not for investors who ventured on gaming government schemes and lost, but for the countless others who, while engaged in entirely private business transactions, watched as governments arbitrarily changed the rules to destroy their value: private pipelines that lost billions to political whim and private corporations barred from combining their interests over concocted anti-competitive or nationalsecurity worries. Or how about coal-industry players shut down by the same greenobsessed governments whose contracts are now wrongly called sacrosanct?

Operators living off the largesse of government rackets, from wind farmers to dairy farmers, actually count on cashing in both ways — first they ride on the government gravy train, then demand taxpayer compensation when it all ends. It can only do the economy good to instil a bit more fear in businesses abut the risks of being entangled in politically motivated government projects. That this would add a risk premium to government business deals isn’t an argument for making those deals eternally unbreakable. It’s an argument for governments making fewer deals with businesses — and leaving more of the economy open for markets to deal with.