Sunday, June 7, 2015

Connecting The Dots?

Here in Ontario, Premier Kathleen Wynne's decision to sell off 60% of Hydro One, the very profitable public utility that generated a pre-tax income of $803 million in 2013, is causing quite a storm of outrage. Despite her promise to put all profits from the sale toward transportation structure, the fact that the sale will yield a mere $4 billion after taxpayer money pays off Hydro's long-standing debt means the sale makes almost no sense. And, one might ask, why a sale of 60%, a proportion that will put hydro squarely in private sector's control?

Operation Maple has put up an interesting video that comes to some intriguing, although rather conspiratorial, conclusions. But surely such is preferable to the bovine passivity that government counts on when imposing its will on its citizens, isn't it?

Meanwhile, Toronto Star letter-writers do their usual excellent job in the critical-thinking department. Here are but a few examples:

Sell-off will help Ontario, Hydro One, Letter June 2

The government surely disagrees with Keith Summer’s excellent May 2 opinion piece, but Minister of Energy Bob Chiarelli’s letter fails to say why. Instead of numerical analysis, all we get is the usual political bafflegab. Boiled down, the minister asks us to trust them. Well, count me out.

Apparently, a valuation of Hydro One has been worked out. I assume this valuation is a report of some kind, with validated numerical analysis. Has it been made public? If not public, has it been made available for scrutiny by reputable independent reviewers? Ontarians deserve this. When there is such a major policy change about the ownership of this vital utility, we all should demand a full revelation of the method and results of the valuation process.

The non-sequiturs in Mr. Chiarelli’s letters confound and astound me. He speaks of a 10 per cent maximum ownership causing shares to be broadly held across Ontario in the same sentence. How does that work? How does any aspect of the sale enable Hydro One to become more innovative, competitive and effective as he claims? It’s just silly to make such claims without any proof or rationale.

This deal is bad policy and Mr. Chiarelli should be admonished for writing such a trivial letter.

Edward Kilner, Mississauga

Minister of Energy Bob Chiarelli repeated the term “much needed infrastructure” four times in his letter to the Star.

Ending his letter he left the impression that selling off 60 per cent of Hydro One “will create more than 110,000 jobs each year and help grow our economy,” without costing the taxpayers any money. But selling off part of Hydro One is not going to create one new job. These jobs for the “much needed infrastructure” are already there and have been sitting on the sidelines for years.

To suggest it will not cost the taxpayers any money reminds of the story of the investor who wanted to open a mink farm. He reasoned since mice multiplied five times faster than mink he could feed the mice to the mink and the mink carcasses to the mice and get the pelts for nothing. It sounded good on paper but as time went on he had to go to the well for more money.

Frank Feeley, Fonthill
After reading Keith M. Summers’ commentary I am more than ever convinced that the Ontario government should retain 100 per cent ownership of Hydro One, with all its healthy profits going into the public coffers rather than private pockets. But if it is in fact impossible for the government to borrow $9 billion at a reasonable rate then it should at least follow Mr. Summers’ advice and focus on raising $9 billion by offering approximately 30 per cent equity in Hydro One, retaining majority ownership and a much healthier percentage of the profits.

Gillian Marwick, Toronto


  1. " the fact that the sale will yield a mere $4 billion after taxpayer money pays off Hydro’s long-standing debt means the sale".....
    Hey, does that mean we will finally get rid of thet "debt retirement charge" on our bills, perhaps there is an upside!

    1. That did occur to me too, Rural, but perhaps it will be replaced by a 'privatization transition levy'?