National Post (National Edition)
POWER POLITICS
HYDRO ONE, THE BEST GIFT KATHLEEN WYNNE EVER GAVE DOUG FORD
Kathleen Wynne is in a pickle. As Ontario premier for five years and a senior cabinet member before that, she’s obliged to defend the government’s record. But, voters having already assessed that record and decided it stinks, she is forced to acknowledge their judgment and pledge to do better.
It’s not an easy act to balance, especially faced with people like the executive and directors of Hydro One, the former Crown corporation that Wynne chose to privatize in return for some quick cash and a lot of bad blood.
It is Liberal practice to paint all conservatives as unquestioning lackeys of corporate overlords, but given the Liberals’ ties to Hydro One, and the government’s remaining 47 per cent share of the new entity, it’s Wynne who finds herself tarred with every unpopular act it gets up to.
And, hoo-boy, are there a lot of unpopular acts. It’s probably not fair to blame the current executive team for the painful power bills that have so many voters up in arms. Ontario’s rates are the result of previous Liberal decisions to “invest” in the utility’s infrastructure and shut down the coal-fired power plants blamed for hindering the government’s climate change aspirations. Stuff like that costs money, and the costs were passed on to consumers — at least until those consumers got mighty angry and Liberal electoral fortunes began looking bleak, whereupon Wynne unveiled a plan to “reduce” household bills by borrowing billions of dollars and pushing the costs into the future for other generations to pay.
It’s safe to say that didn’t go down well. But the last thing Wynne and her team of thinkers must have anticipated was that — even as they sought to extinguish the existing fires of outrage — the board they appointed would start pouring gasoline over the issue and waving around a blowtorch.
Presumably the eight men and five women directors, not to mention chief executive Mayo Schmidt, are bright enough in their own way. Their grasp of political optics, however, make Donald Trump look like the apogee of sophistication. When Schmidt happily accepted a compensation package that now totals $6.2 million — after a $1.7-million raise — he handed Progressive Conservative leader Doug Ford one of the key pledges of his campaign. Ford has been touring the province pledging to fire “the $6 million man” for weeks now, adding that he’d sack the entire board as well, just for good measure.
Ford’s ability to carry out his promise may not be as easy as he suggests, but it hardly matters. It goes down well with angry voters, who dislike watching executives get rich while they struggle to pay their bills just as much as they disliked being soaked by previous appointees on government salaries.
Wynne initially reacted to Ford’s charges with ill-considered derision, dismissing it as “sloganeering and blus- ter” while arguing Schmidt’s salary was comparable to other executives. That’s debatable when Eric Martel, chief executive of HydroQuebec, is listed as earning $560,000 this year, but it’s no excuse in any case. Telling voters they have to pay one corporate bigwig a small fortune because that’s what other corporate bigwigs earn is rarely a direct route to their sympathy and support. Ford insists he’d have no trouble replacing Schmidt at a much more modest salary, and voters seem happy to let himgiveitatry.
As if Schmidt’s existing pay scheme wasn’t enough, reports emerged indicating the board had agreed to award him a protective shield, approving severance of up to $10.7 million should he be fired. Energy Minister Glenn Thibeault admitted he only found out about the change in March, months after it had been approved. The revelation was enough to make Wynne start hedging her bets, assuring voters she was less than pleased with the news and would be keeping a sharp eye on the future.
Then came Tuesday, when the CBC reported that — right in the face of the public hullabaloo — board members had voted themselves a $25,000 raise, and $70,000 for chairman David Denison. Denison will now take home $330,000, while regular members earn $185,000 for their part-time positions.
Wynne was on the road, trying to sell her pie-in-thesky plan for a high-speed rail line to Windsor — just what Ontario needs when it can’t even afford basic transit upgrades in its biggest city — when she was asked about the raises. To her credit, she managed not to scream. “We’ve made it very clear that the compensation package was unacceptable,” she asserted. “So, that is exactly why the review is happening. We forced that review to happen. We made it clear and the review is happening.”
Unfortunately, a review doesn’t come close to matching what her competition has in mind for Denison, Schmidt and their thickwalleted colleagues. Even as the pay hikes were quickly approved at Hydro’s annual general meeting, Ford was outside at a rally warning he’d have all their heads on a platter once the election is over. Horwath has gone even further, pledging to return Hydro One to full public ownership, never mind the cost.
To say the Hydro mess has become a litmus test for the Liberals’ record after 15 years in power is an understatement. Each revelation makes it harder for the government to claim its remaining 46 per cent share of Hydro One ensures a continued strict oversight, with the public in mind. Even before Hydro’s board made the premier look foolish, vote projections suggested her Liberals could win as few as two seats on June 7.
While the premier fulminated, Schmidt offered a display of near-regal detachment. “We don’t get involved in politics day to day,” he said. “The activities around the political environment will quiet themselves after June 7.”
I wouldn’t be so sure of that, given the threats being bandied about by the two most likely premiers. Of course, when getting fired comes with a $10.7 million payday, what’s to worry?