Doug Ford (unintentionally) reminds people that privatizing Hydro One was a bad idea | National Union of Public and General Employees

Doug Ford (unintentionally) reminds people that privatizing Hydro One was a bad idea

UPDATE: Doug Ford believes Liberal government claims about Hydro One Governance Agreement

Ottawa (12 April 2018) — Given his support for privatization, Ontario PC leader Doug Ford probably didn’t mean to remind people of why privatizing Hydro One was a bad idea. But when he promised to fire the President and CEO of Hydro One if he becomes premier, he managed to do that.

When a public service like Hydro One is privatized, governments lose the ability to remove the president or other senior officials. Instead, that decision rests with a board that is accountable to shareholders, not the public. Because of the provincial Liberals’ privatization of electricity distribution, the Ontario government now owns less than half the shares in Hydro One.

Unless Doug Ford commits to bringing Hydro One back under public ownership, his promise to fire the president and CEO of Hydro One is meaningless.

Executive salaries at Hydro One skyrocketed since privatization

Since Hydro One was privatized, executive salaries have skyrocketed. The President and CEO of Hydro One makes 8 times more than when Hydro One was publicly owned — $6.2 million. The top 5 executives collectively make $14 million.

Privatization will cost Ontarians at least $1.8 billion

The Financial Accountability Office of Ontario has estimated that selling 53 per cent of Hydro will actually cost the province money. The lost revenue from dividends will cost the province $1.8 billion more than it would have cost to borrow money for new infrastructure projects.

Those figures don’t include the impact of privatization on electricity rates. In Nova Scotia, when electricity services were privatized, rates increased significantly.

PCs set the stage for Liberal privatization of Hydro One

While it was the Ontario Liberals that privatized Hydro One, it was legislation passed by the last PC government in Ontario that made it possible. That legislation made it possible for the Liberals to sell off Hydro One without needing to get the approval of the provincial legislature.

Partial privatization of electricity generation pushing up costs

While the PCs didn’t manage to privatize all electricity services, they did manage to partially privatize electricity generation. The partial privatization of electricity generation is one reason why Ontario is paying so much for electricity.

If electricity generation were public, Ontarians would only pay what it actually costs to generate. Instead, with privatization, for much of Ontario's electricity supply, Ontarians have been locked into fixed-price agreements with private producers. These fixed price agreements have forced Ontarians to pay far higher prices than they would if electricity were publicly controlled.

As well, privatization has enabled private electricity generation companies to take advantage of electricity users. In December 2017, the Auditor General of Ontario reported that owners ofprivate natural gas plants are getting at least $30 million a year more than they should. Further, that private companies generating electricity were billing the public for ineligible or inappropriate costs. Also in December, CBC reported that a privately owned natural gas plant billed electricity users for $100 million in inappropriate expenses.

Public ownership only way to control electricity costs

Without public control of the electricity system, it will be more difficult for Ontario to control things like rapidly rising executive compensation or private electricity companies gaming the system. Unfortunately for Ontarians, most politicians are willfully ignoring that fact. Of the 3 largest political parties, only the Ontario NDP is proposing to reverse the privatization of Hydro One.

UPDATE: Doug Ford believes Liberal government claims about Hydro One Governance Agreement

Throughout the privatization process, the Liberal government claimed that selling off up to 60% of Hydro One wouldn’t result in a loss of public control. To justify this claim the Liberals pointed to provisions in the governance agreement between the province and Hydro One that allow the province to nominate 40% of the board of directors and remove the board.

What the Liberals didn’t mention is that, under the Governance Agreement, both the election of the provincial government nominees and the removal of the board still have to be approved at a meeting of shareholders. And when the provincial government doesn’t have a majority of the shares it cannot guarantee that it will get what it wants at a shareholders meeting.


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 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


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