Wynne waves her wand
There was a time when Hydro One was just a big, dull, provincial utility, tasked with transmitting electricity to Ontario’s consumers. It didn’t have to generate the power, just send it down the line. Then Premier Kathleen Wynne discovered it was also a miracle.
Since being seized by the notion of “privatizing” Hydro One, Wynne has discovered the many magical benefits that come with it. Hydro One isn’t just a giant bureaucracy of astonishingly overpaid employees (more than 70 per cent make more than $100,000 a year), it’s a wand you can point at problems and … zingo! … they’re solved.
You want new infrastructure, but you don’t want to pay for it? Zingo! An offering of Hydro shares will pour billions into the treasury, enough for streetcars and subway lines and other transit goodies, all at no cost to the taxpayer.
Problems with the unions? Ka-sham! The premier has already offered them a juicy package of Hydro shares to ease them over the demand that they pay more than the piddling share they currently contribute to their rich pension plans. Not only does this disguise the fact the province is still coddling Hydro One and Ontario Power Generation despite its pledges of austerity, it also pleases the unions that have done so much to keep the Liberals in power.
Bugged about your ever-rising electricity bill? The magic wand can solve that too. Ed Clark, the former banker and current Wizard of Wynnery, told a legislative committee on Tuesday that the “privatization” will lead to lower power rates as well.
“St r o ngl y pe r f o r ming companies typically reduce costs and improve service. When this happens the benefits are passed onto ratepayers through lower rates than would other wise occur,” Clark attested.
This is a double blast of magic, the kind only a real wizard could perform. The first effort to privatize Hydro, by the Progressive Conservatives, fell apart because Ontarians became convinced (thanks to many attacks by the Liberals) that privatization would open the door to unscrupulous private enterprisers with their eye on the bottom line and their fingers on the rate-hike trigger. But now, under the Liberals, we’re being told that the market is a good thing, and will pass on any savings to the customer.
In addition, in the Liberal case it’s privatization without actually privatizing anything. Only 15 per cent will be sold off initially, perhaps rising to 60 per cent someday later on, but with caveats in place to ensure the government retains effective control over major decisions. It can all be done on the cheap, because Clark says he’ll ensure greedy bankers don’t soak the government for their usual hefty fees.
So the Liberals get to sell Hydro, without really selling it, while bringing in billions and buying off the unions, all at no cost. Magic! And guess what? Since it won’t be a public utility any more, Wynne’s government has moved to remove it from the burden of oversight by Ontario’s independent monitoring agencies. The new privatized-butstill-controlled-by-the-government operation would no longer be subject to full scrutiny by the auditor-general, the ombudsman, the financial accountability officer, the privacy commissioner or the environmental commissioner. Those agencies sent a joint letter to the premier on Friday, complaining that her plan would “significantly reduce important oversight powers,” and “reduce the scope of the reviews that can be conducted on behalf of the people of the province.”
Wynne waved off the criticism with another testament to her faith in the free market. “The fact is that private companies have their own oversight mechanisms,” she
The Liberals get to sell Hydro One, without really selling it, while bringing in billions and buying off the unions. Magic!
said. “There are rules around oversight for publicly traded or private companies. And on top of that we’re going to put a Hydro ombudsman in place. We’re building in some oversight. So I actually think the oversight will be there.”
Amazing. The premier believes the market knows best when it suits her to be an ally of the market, but insists on maintaining provincial control even after a sell-off, because you can’t trust the market to get it right. Perhaps best of all for the government, the whole deal is being done without a word of debate in the legislature, where the plan has yet to be discussed and approved, much less subject to opposition inquiries. When the Progressive Conservatives and New Democrats complained to Speaker Dave Levac, he ruled that the government has the right to make plans without having to run to the legislature for approval every five minutes.
“Presumably, if the legislation does not pass, these arrangements will not be implemented,” he said.
Clearly, Levac appreciates that when you’re dealing with magic, subjecting decisions to mere mortals is an unnecessary encumbrance. Let them get their own wands, this one belongs to the Liberals.