Nothing fair about Wynne’s hydro plan
Queen’s Park committee hearings into the financial decisions of former premier Kathleen Wynne’s Liberal government have produced devastating testimony and documents exposing reckless spending.
Particularly as the Liberals were heading into the June 2018 election, where they knew their chances of victory were slim.
Wynne’s testimony Monday, where she was questioned about her Fair Hydro Plan, ostensibly to cut electricity rates by 25 per cent, is a case in point.
She imposed this plan on electricity consumers despite repeated warnings from government staff it was financially reckless.
Wynne had no convincing response in explaining her decision, other than that she sincerely thought what she was doing was best.
This despite previous testimony from senior civil servants and the contents of cabinet-level briefing notes, warning the Liberals electricity consumers would have to pay back an estimated $4 billion more in unnecessary interest payments.
To keep the borrowing for the Fair Hydro Plan from showing up on the province’s books, the Liberals consigned it to Ontario Power Generation, exposing electricity consumers to greater financial risks.
Staff warnings could not have been clearer.
Here’s a formerly confidential briefing note to Wynne and her cabinet:
“It is likely that external borrowing by the OPG Trust would be at a higher interest cost than provincial borrowing costs, which would affect the carrying costs that would need to be recovered from ratepayers.”
The document also warned Wynne and her cabinet they would have no way to control electricity prices and private lenders would likely require a government backstop.
Staff warned the auditor general might refuse to give an unqualified rating to the province’s books heading into the 2018 election, which is what later happened.
A former Supreme Court justice advised Wynne and Co. there was a “moderately high risk” they would lose in court if critics of their Fair Hydro Plan challenged it, arguing it was a tax instead of a fee.
Wynne replied she decided her plan was the fairest way of spreading the costs for upgrading Ontario’s electricity infrastructure between present and future generations, and that everything she did was in the open.
We agree it wasn’t done in secret.
Rather, it was done by hiding in plain sight the true state of the province’s deficit.