FORD PUTS IT IN DRIVE
Ontario election:
Premier-designate Doug Ford’s transition team has some heavy lifting to do before he and his Progressive Conservative cabinet take office on June 29.
Led by Ottawa lobbyist and former provincial and federal conservative aide Chris Froggatt, the group Ford announced will ease him into power includes former minister John Baird, who has experience in everything from energy to environment policy to shepherding laws through the legislature. That knowledge will be useful as Ford and the Tories work out how to answer some the questions they’ll have to answer right away.
DUMPING THE $6-MILLION MAN
For a quick win, the Progressive Conservatives will want to follow through on their simplest, loudest promise: firing Mayo Schmidt, the chief executive of Hydro One, whose $6.2-million salary and stock package last year Ford considers an affront.
“If the CEO and board at Hydro One have any respect for their customers, for Ontario or for the people, they would resign today,” Ford said early in the campaign. “If they don’t resign, you’d better believe I’ll be kicking him and them out the door and I will use every tool at my disposal to claw back every single dime they’re taking out of the pockets of the people.”
The province is the corporation’s biggest shareholder and has special powers beyond that, including a right to fire the board of directors pretty much unilaterally. If the current group won’t dismiss Schmidt, Ford has said, he’ll dump them and put in directors who will. The catch is that under a governance agreement the Liberals wrote up when they sold billions of dollars’ worth of shares in the transmission utility, he can’t put in new directors as easily as he can dismiss current ones.
The province has the right to name 40 per cent of the board. In the case of a mass dismissal, Hydro One’s five other biggest shareholders get to put up the rest of the replacements. We’re talking about massive investors. Investors Group, Fidelity, Scotiabank — companies like that. A meeting to turf the old crew can’t be called until the new one is ready.
The new people have to have a range of skills suitable for guiding a multibillion-dollar company and they have to be from diverse backgrounds. They can’t be current or recent provincial employees. It’s all in writing.
Unless the managers of multibillion-dollar pension funds and whatnot are happy to play ball (which they might be, rather than bringing on the wrath of a newly-elected government) the Tories might find it easier to pass a law changing the rules. But that would take time and would shred the government’s relationship with some of the country’s biggest financial firms.
LIBERALS IN THE LEGISLATURE
With a rump of seven seats, the Liberals are left one short of what the rules say they need for official status as a party in the legislature. That’s not just a symbolic embarrassment, though it’s definitely that, too. “Recognized parties” get guaranteed slots in question period, guaranteed numbers on legislature committees, a say in when and how legislation comes to the floor. They get public funding for research and staff that independents don’t.
There’s precedent for bending the rules in the smallest party’s favour, but there’s bad news there for the Liberals. The magic number for party status used to be 12 seats and in 1999 the New Democrats won only nine. Thenpremier Mike Harris agreed to change the rules, on grounds that he’d cut the number of MPPs so the threshold should be lowered. They set the number at eight even though the “right” number, to preserve the same ratio, would have been nine or 10 (the math worked out to almost exactly 9.5). Eight was generously low.
In the next election, the New Democrats plumbed new depths and elected only seven MPPs. The new premier, Dalton McGuinty, shrugged. The Liberals did offer a compromise: enough public funding for a few staff, but none of the procedural standing to ask questions or sit on committees. That was that until a byelection in Hamilton a few months later sent a new New Democrat to Queen’s Park instead of a Liberal — a rookie named Andrea Horwath.
Politically, the Tories benefit from having two functioning parties on their left; it’s how they won a majority government with 40 per cent of the vote Thursday night. Ideally, for the Progressive Conservatives the Liberals will be alive but still crippled in four years. The question is whether the Harris or the McGuinty example is the one to follow to achieve that.
GETTING OUT OF CAP-AND-TRADE
Ford’s promised to get Ontario out of the carbon-emissions market it joined with Quebec and California earlier this year, which makes big greenhouse-gas emitters buy permits to emit at regular auctions. Like firing the chief executive of Hydro One, this comes with complications.
The three governments mostly sell “current” permits that apply to emissions this year but they also let companies lock in prices by selling permits that go as far out as 2021. Emitters have bought them, possibly traded some amongst themselves, and the governments have the money already. Disentangling Ontario companies like Enbridge, Goodyear, Hiram Walker and Suncor from the market the government previously made them join will take some doing and probably some money.
The next auction is due in two months. Ontario companies will want to know whether they ought to bid on any permits. If not, Quebec and California will want to know how many they ought to sell without us.
Welcome to government. Here comes the hard stuff.