More and more the evidence points to the fact that selling off Hydro One will be a huge boost to the banks and big corporations.
Ottawa (23 June 2015) — RBC and Scotiabank will be paid up to $270 million in public funds for selling off 60% of Hydro One.
“In addition to all the other problems with privatizing Hydro One, up to $270 million of public money that could be used to improve public services or keep hydro affordable will be flowing into banker's pockets,” said James Clancy, National President of the National Union of Public and General Employees (NUPGE).
Receiving commission from sale
This week it was announced that the two banks would be running that initial public offering (IPO) of shares in Hydro One. For selling the shares, they will receive a commission of between one and three per cent.
The first block of shares being sold is worth $2.25 billion. If the government is able to carry out its plan to sell 60 per cent of the shares, the two banks will make between $90 and $270 million.
Giving up to $270 million to the banks is no bargain
Hard as it is to believe the Liberal government is trying to claim that handing up to $270 million of public money over to the banks means we’re getting a bargain. But based on the limited details that are available, it’s the banks that are celebrating.
The Financial Post suggested the fees the banks are charging are comparable to fees charged for issuing preferred shares, while the Globe and Mail reported that the banks will face minimal risk.
For the public, the picture is less rosy. We lose control of a key part of our electricity system, face higher rates and poorer service, and to top it all off, we have to pay the banks between $90 and $270 million.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 360,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE