Hydro One privatization not in bad faith: court

No evidence exists that Premier Kathleen Wynne or any of her senior ministers acted in bad faith when they made the surprise decision to privatize part of Hydro One, Ontario’s top court ruled on Tuesday.

Upholding an earlier ruling dismissing a lawsuit against the province, the Ontario Court of Appeal agreed that the Liberal government’s decision is immune to such legal action because the privatization was a matter of “core policy.”

As a result, the plaintiffs would have had to show detailed evidence the decision was either irrational or made in bad faith, the Appeal Court said in a ruling ahead of an election in which the privatization is likely to be a key issue.

“Matters of core policy are supposed to be immune from suit, absent rare cases of irrationality or bad faith,” the Appeal Court said. “The appellants say that a great deal will be revealed if the suit is permitted to proceed and discovery takes place, but to accept the pleading in order to facilitate discovery would be to undermine the important purpose of the immunity.”

The case arose when the Wynne government decided to sell off part of Hydro One — a decision that had gone completely unheralded during the provincial campaign that returned the Liberals to office in 2014. The government said money from the sale of shares would go to pay down long-term hydro-related debt and fund transit and other infrastructure projects.

The Canadian Union of Public Employees and other ratepayers sued Wynne and her energy and finance ministers, arguing the privatization plan was merely a scheme to reward donors to the Liberal party as a way to keep the donations flowing. As such, they said, the government had acted in bad faith.