A Parochial Post?

While I realize that a post about Ontario politics is likely of little interest to those living elsewhere, I believe what has happened in my province serves as a solid object lesson about the creeping privatization of public assets.

I have written in the past about Premier Kathleen Wynne's betrayal of the province. Upon winning a majority in the last election (after the holder of the balance of power, the NDP's Andrea Horwath, decided to go for the gold and triggered an unnecessary election), Wynne announced the sell-off of 60% of one of the province's crown jewels, Hydro One, despite the fact that it generated just under $1 billion in annual revenue. Her avowed purpose was to "broaden ownership" (how much broader can public ownership be?) and use revenues from the sale to finance transportation and other infrastructure projects.

Now, a report by the Financial Accountability Office (FAO) confirms the folly of that sale:



To sum up, as Rob Ferguson reports,

It would have been $1.8 billion cheaper for Premier Kathleen Wynne’s government to borrow money for transit and infrastructure projects than sell a 53-per-cent stake in Hydro One.

Even more distressing,

...the provincial treasury will lose $1.1 billion in dividends from Hydro One this year and an average of $264 million annually until the 2024-25 fiscal year.

So one has to ask, why didn't Wynne simply borrow the money for these infrastructure projects? My belief is that, despite some progressive policies, hers is essentially a neoliberal regime, committed to the notion that government should play only a supporting role so that the depredations of the corporate agenda can prevail. That, and, as New Democrat MPP Peter Tabuns observed,

“It was all about making the books look good [i.e., a balanced budget] for the election".

What can the rest of Canada learn from this debacle? If nothing else, it teaches all of us to remain vigilant about our public assets, and to keep a steady eye, for example, on the Trudeau government, which is currently studying privatization of our major airports.

In the latter case, my prediction is we will hear nothing more about it until after the next federal election. Should the Liberals secure another majority, be ready for the next round of corporate nest-feathering at the expense of our federal treasures.

On Public Asset Sales

Selling off public assets that yield steady and lucrative revenue streams is rarely a good idea. In Ontario, Kathleen Wynne did just that with 60% of Hydro One so she could claim a balanced budget. It is a betrayal I will never forgive her for.

As I have written previously, Justin Trudeau would like to do the same thing, for similar reasons, with our major airports. It is a very bad idea, as are most of the schemes promoted by neoliberals.

Happily, the possibility of relief from such madness is shimmering on the horizon:

A Parliamentary committee is recommending against the Liberal government’s plan to sell off Canada’s airports to raise billions in capital to be used towards other public infrastructure projects.

“Limit rising passenger and operational costs by preventing the privatization of Canadian airports,” the House of Commons Standing Committee on Finance, said in its report of the Pre-budget consultations in advance of the 2018 federal budget.

The committee's report, Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada

summarized the strong opposition to airport privatization by various stakeholders, including the Air Transport Association of Canada (ATAC), which believes that the sale is near-sighted and will result in significantly higher costs for airlines and passengers.

“Recent experience in such projects, for example in Australia, has resulted in costs per passenger to increase by 50% in the decade following airport privatization,” ATAC told the committee in a briefing. “To add insult to injury, the government would impose a huge new burden on our industry and its passengers while not reinvesting one penny of the billions generated back into aviation.”

Empirical evidence like this should carry much weight, but the Trudeau government is refusing to release the privatization study by Credit Suisse Group AG that it commissioned. Therefore, whether such disquieting facts were even considered is unknown. This unwholesome secrecy is opposed by the National Airlines Council of Canada, which is calling for open and public discussion around the entire issue.

I seem to recall Justin Trudeau, upon taking office, promised an open and transparent government. What a difference two years in office have made to that promise, eh?

The Creep Of Corporatism

Responding to my post on the secret study conducted by the Trudeau government on privatizing our major airports to raise much-needed cash, BM offered the following, which I am featuring as a guest post today:

Well, this is the usual way corporatism works. Change a capital investment into an eternal loan with rent due sharpish at the beginning of each month, paid for by the citizens. When paper money is abolished in the next five to ten years (already started as an experiment in India by withdrawing low-denomination notes to see what happens - disaster - but who cares, they're brown people and not in the West; full story on the countercurrents.org Indian site last fall, studiously unread by white men in the West of all political persuasions), we'll be well on the way to mere electronic representations of our paid-for labour. Every transaction under full surveillance by our masters, no under the table cheapy house-painting, no cash at the farmer's gate for decent veggies and real eggs, taxes paid in full, citizens in thrall, and so on. It'll be sold as the Bright New World, like a super-duper schmarty-phone. All will cheer at how advanced we are.

No wonder Bitcoin thrives.

But as Amazon flogs groceries online, takes over Wholefoods, ruins supermarkets, what happens to old people? I see it all the time when I run from my rural lair into Halifax, old ladies carrying full shopping bags miles. Halifax is a food desert city, bus routes are organized at right angles to where people live to get to a supermarket, that is, they are 100% utterly useless. These old folks don't have PCs or even mobile phones. They're screwed in our brave new world, slain on the fields of corporatism. I drive them if they'll accept a lift, those old gals still dressing up to look presentable, living on OAP and a supplement if they're lucky, trying to keep up appearances. Makes me weep in frustration. The destruction of civil society on the bed of profits and eff-you attitude.

Don't know if JT has the brains to understand the consequences of flogging off public property, or doing the Canadian internal equivalent of an ISDS governed free trade pact called the Infrastructure Bank, I really don't.

But Morneau does, look at that Economic Council of his, set up in February last year with all the corporate and university academic wannabe rich types "advising" him. Telling him, more like. A $1 a year each, such noble types donating their valuable time, reduced to eating sandwiches from the caff at their Ottawa meetings in order to do their bounden duty for Canada, chaired by a man from a big accounting firm. It was then that I knew we were truly effed, seduced by hair and a smile.

Nothing has occurred in the last 18 months to make me change my mind at the neoLiberal's canny backing of JT, the intellectual waif with an aw shucks um and an ah at public speaking events that makes people buckle at their knees in abject adoration. Behind his back, the people that matter are planning ways to pilfer our back pockets.

Succeeding!

And we love it!

Justin's Secrecy

There will always be those unable to see beyond the obvious when it comes to Justin Trudeau. His sunny smile, his platitudinous assurances that we can have our pipelines and climate change remediation simultaneously, and his opaque insistence upon the necessity of an Infrastructure Bank seem to carry the day for some, apparently happy to suspend whatever critical-thinking capacities they may possess.

Unfortunately, this blanket belief in Trudeau's sincerity means that his neoliberal agenda is being under-scrutinized by the public. One of its most egregious manifestations is the secrecy around which the government has hired consultants to study the deliverance of our airports to private interests.

H/t trapdinawrpool for his twitter alert about the following:

A secretive project to generate billions of dollars from the sale of major Canadian airports is pushing ahead with the hiring of consultant firm PricewaterhouseCoopers (PwC).

The firm is to "act as a commercial adviser assisting with additional analytical work with respect to advancing a new governance framework for one or more Canadian airports."

The shield of secrecy was peeled back only due to a freedom-of-information request from the CBC, coupled with some stellar sleuthing. The very fact that this project was withheld from public eyes is the first red flag.

But wait! There's more!

The new contract follows a report delivered last fall by Credit Suisse Canada on how Ottawa might gain billion-dollar windfalls through the sale of its interests in Canada's Big Eight airports and 18 smaller airports. The eight are in Toronto, Vancouver, Montreal, Calgary, Edmonton, Ottawa, Winnipeg and Halifax.

Credit Suisse was hired by CDEV, [Canada Development Investment Corp.] acting on behalf of Finance Canada, in a contract announced in a terse two-sentence release on Sept. 12.

The Crown corporation and Finance have since refused to release the Credit Suisse report, the contract terms or even the cost to taxpayers, despite requests by an opposition MP and by journalists.

And, again typical of the neoliberal orientation, private entities were given veto power over the release of information:

... the contracts with Credit Suisse and PwC contain clauses that give the firms vetoes over the public release of any information, including the cost of the work.

Why should any of us be bothered by any of this? There are many reasons, but Craig Richmond, the president and CEO of the Vancouver Airport Authority, recently addressed one of them when he said,

... prices for airlines and passengers would only increase as for-profit entities seek to make back their investments.

[He understands] the attraction of a one-time big profit for Ottawa, but "that's like selling the furniture in your house to cover your credit card debts."

Mr. Trudeau's government euphemistically refers to this whole process as "asset recycling." Those less enamoured of the Prime Minister and his band of sunny men and women, I suspect, would call it something else entirely.

Another Pending Betrayal

As we become increasingly disillusioned about the growing disparity between the Trudeau promise and its reality, another betrayal of that promise is pending. Like his neoliberal soul sister in Ontario, Kathleen Wynne, who insists that selling off 60% of the provincial crown jewel known as Hydro One is a no-brainer, Mr. Trudeau apparently thinks it is a keen idea to consider delivering our national airports over to profiteers, a.k.a. the private sector, to raise money for his 'national vision.' The upcoming federal budget looks to begin the process:

The budget is expected to signal the government’s interest in finding a way to tap the value of airports with a process, perhaps led by Transport Minister Marc Garneau, to more formally explore selling them off, the Star has learned.

The potential benefit for Ottawa is huge. One study done by the Vancouver airport authority estimated that the federal government could reap between $8.7 billion and $40.1 billion by selling off the country’s eight largest airports, including Toronto’s Pearson International Airport.

That may be good news for a government with a burgeoning deficit, but bad news for the rest of us:

Yet the privatization scheme is ringing alarm bells among airlines, airport operators and some municipalities who warn that handing over Canada’s airports to owners with a profit motive sets the stage for rising fees that will force travellers to pay more.

Vancouver airport has teamed with those in Ottawa and Calgary on a public information campaign to oppose privatization.

“We think it’s a bad idea,” Craig Richmond, the chief executive officer of the Vancouver Airport Authority, told the Star.

“This idea of a one-time payment, that’s like selling the family jewels and then regretting it forever,” he said in an interview.

The consequences of such a sale will be far-reaching and costly for those who fly:

... the authority concludes that privatization would add “hundreds of millions of extra costs” that would have to be recovered through cost-cutting, increased fees and reduced investment in airport infrastructure.

“It would be too costly for a for-profit buyer to acquire an airport such as YVR without reducing services and passing these costs on to airport users through higher fees and charges,” the report states.

So while the private sector may salivate over the prospect of windfall profits, as is the norm in the neoloiberal vision embraced by people like Trudeau and his fellow travellers, the rest of us, the mere peons in this 'grand' vision, will be left to pay the price.

Pillaging The Public Purse: On Hydro One's Privatization

I have written in the past on my strong opposition to Kathleen Wynne's selloff of 60% of Hydro One. She has no mandate for this pillaging of the public purse, and no good reason for it except her politically and ideologically-driven obsession with balancing the budget before Ontario's next provincial election. She will not be getting my vote.

Recently, Linda McQuaig wrote a column that came out strongly against this sale, offering an historical perspective showing the public good that accrues from public ownership of such a utility.

In today's Star, readers offer their own insights on this issue, one that is likely a big contributing factor in the Liberals' current poor showing in the polls:

Re: The case against privatizing Hydro One, Opinion Aug. 4

What’s most disturbing about reading Linda McQuaig’s strong case against privatizing Hydro One is that it reveals clearly that Premier Wynne seems to be selling it for no worthwhile reason.

When 73 per cent of Ontarians disagree with the sale and she insists on it, then she is not serving the public will. Further, to trade off the long-term benefits of Hydro One for a short-lived infusion of cash for infrastructure is economically incomprehensible.

With this kind of foolish, arbitrary decision, which is symptomatic of the disconnect between the public will and its leadership, Wynne will certainly join the infamous ranks of other failed premiers of Ontario, such as Mike Harris and Dalton McGuinty, who also carried out their personal agenda while forsaking the common good of the electorate.

Pity the serious voters.

Tony D’Andrea, Toronto

Timing is everything. Currently, along with a several other Ontarians, I am particularly interested in the timing of the Ontario Liberals’ Climate Change Action Plan.

Last Nov. 15, the Ontario Liberals privatized Hydro One when they sold off 15 per cent of the former Crown Corporation. Sad but true.

In April, they sold off another 15 per cent. The following month, Ontario’s Minister of the Environment and Climate Change let the world know that Ontario is moving away from natural-gas home heating. Some back-peddling followed. Shortly after that, the Liberals released their official Climate Change Action Plan.

It indicated their intention to move to a more electricity-based society. Once complete, Ontario is to have far more electric vehicles, electric charging hubs, electric home initiatives, etc.

In summary, the Liberals are moving Ontario to a more electricity-based society after privatizing our province’s transmission grid and largest local distribution company! That means Hydro One will now go on to make record profits and a huge amount of potential income is being stripped away from Ontarians.

But why? To balance the current Liberal budget and dangle some shiny gifts ahead of the 2018 election. All this at the expense of Ontarians.

The whole thing reeks of corruption. Just waiting for the smoking gun to be revealed. Timing is everything.

Joel Usher, Newcastle

Thanks to Linda McQuaig for detailing the long history of support in Ontario for a public monopoly on electricity — right up to today. The public instinct is right: it is best to keep this rare and valuable asset so that profits go back to our treasury, and to avoid the risk of the monopoly control falling into the hands of those who would maximize their returns at the expense of consumers and the environment.

Ms. McQuaig could have added that selling off Hydro One is a bad deal, as concluded by Ontario’s Financial Accountability Officer. After all, investors are not stupid.

They will not pay full price for the value of the future Hydro One profits they would get as minority shareholders, due to the risk, because key decisions affecting profits are taken by government. The monopoly is worth more to the government as the decision-maker.

If you must sell an asset, this is a particularly bad one to sell.

Kim Jarvi, Toronto