Ontario is in the process of selling off 60 per cent of Hydro One, our public electric utility. Fifteen per cent was sold off this month. Additional shares of 15 per cent will be sold off every year to private investors until 2019. The province will retain a 40 per cent ownership. What does it all mean for our homes and businesses?
For starters, hydro rates are expected to increase 42 per cent in the next five years. Ontario residents now pay the highest prices for electricity in North America. It hurts more when you know that Ontario exports energy at a loss of about $1.2 billion each year – about $300 for each Ontario taxpayer. That energy, sold at a loss to taxpayers, subsidizes out-of-province business competitors.
The Ontario Chamber of Commerce recently released its findings on the high price of electricity in Ontario. It found that one in 20 Ontario businesses expect to shut their doors in the next five years. Forty per cent of businesses say the meteoric rise of hydro costs have forced them to delay or cancel investment. Peak rates, the rates charged during the business day, are rising the most. Businesses cannot shift their time of use and will face the highest increases. Add to this the coming cap and trade carbon tax, a rising minimum wage, the new Ontario government pension plan, rising Ontario workplace premiums, not to mention the high rents many businesses already pay – which we see here in the Beach – and the findings of the Chamber of Commerce raise serious concerns.
But it is the meteoric rise of hydro rates that is considered Ontario’s job killer, and that will also push many residences into “fuel poverty” where people cannot afford to pay their hydro bill. That is why so many oppose the 60 per cent sale of Hydro One to the private sector.
Many note that the Liberals did not campaign in 2014 to sell Hydro One. The Liberal election book made a foggy campaign promise to “retool our assets.” But that is not a clear or honest mandate to sell a vital public asset.
In October 2013 Premier Wynne wrote an open letter that her government would embrace transparency. She wrote: “We must also unlock public data so that you can help us solve problems and find new ways of doing things.”
However, 185 municipalities have passed motions to keep Hydro One public that have gone unheeded. Unions, citizens’ groups, editorials, and columnists have requested an open, transparent consultation process, but have been ignored. There have been no public hearings, and worse, the legal work was done behind the scenes by lawyers working long hours at Queen’s Park to change acts and schedules to move Hydro One from public to private ownership.
For example, Hydro One is no longer a crown agency. Financial data to the auditor-general will be limited. Employees are now off the sunshine list. There is no longer a public ombudsman to help people navigate the utility.
Ontario auditor-general Bonnie Lysyk and seven other independent watchdogs took the unprecedented step of jointly writing Premier Wynne requesting oversight of Hydro One be maintained. This was rejected as well. Hydro One has been put behind an iron curtain and the cone of silence lowered.
This month the report from Ontario’s Financial Accountability Office (created in 2013 under pressure to ensure the Ontario Government makes transparent responsible decisions after politically-motivated gas plant cancellations cost taxpayers over $1 billion) concluded the sale is bad news for all of us. It will do little to finance infrastructure. The Ontario treasury will forego 60 per cent of the current $750-million dividend the province receives – meaning the province will lose between $300 million and $500 million a year. The report says the sale will increase provincial debt by $2.7 billion over the next decade. Every argument the government advanced for the sale of Hydro One, the Financial Accountability Office rejected. The FAO itself battled the government for disclosure every step of the way.
So who benefits from this sale if not the people of Ontario? What will our hydro costs look like under a 60 per cent private company that must turn a profit for its shareholders? In this case the responsible course would be to halt the continuing sale, initiate a fully open and meaningful public process, and place the proposed sale in broad daylight with the lights turned up on full.