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On January 26, the Power Workers’ Union (PWU) made a submission to Ontario’s Ministry of Finance on the 2015 Pre-Budget Consultation. These comments focused on the perils (risks or dangers) of the recommendation of the Premier’s Advisory Council on Government Assets (Council) to separate Hydro One into two companies—transmission and distribution—and to sell a majority share in the resulting distribution company to the private sector. The capital raised from the sale would be used to fund transportation infrastructure, including subways.
The PWU is supportive of the original objectives of Council, which were stated to be -maximizing the value of Ontario’s publicly owned assets for the benefit of the people of Ontario and the voluntary consolidation of local municipal distribution companies. The PWU considers the Council’s recommendation to split and sell Hydro One businesses as ill conceived. The submission presents information demonstrating how the implementation of this recommendation would be harmful to the province’s finances and to Ontario’s electricity customers.
The province is currently the sole owner of Hydro One. In stark comparison to many other government businesses, Hydro One is one of the very few that is a significant net moneymaker for the province. This helps offset revenue requirements for other critical government programs year after year, decade after decade.
The implementation of the Council’s recommendation would:
Impacts 2, 3, 4 and 5 would thereby increase the cost of electricity for Ontario electricity customers.
The Council’s recommendation is also inconsistent with recommendations made by the 2012 Commission on the Reform of Ontario’s Public Services which advised the Government to “not partially or fully divest any or all of the province’s government business enterprises … unless the net, long-term benefit to Ontario is considerable and can be clearly demonstrated through comprehensive analysis.”
Retaining Hydro One and Ontario Power Generation in public ownership, in addition to providing reliable, low-cost electricity to Ontarians, allows the province to continue to use these valuable assets and the services they can provide to fuel economic growth and create more jobs and more revenue for Ontario.
To the extent that the Province needs to address new and existing financial challenges like subways, the PWU calls for an open and transparent dialogue between government, industry, electricity customers and labour based on fairness and mutual respect. That dialogue should focus on providing needed revenues to the province while minimizing the risks to the affordability, adequacy, reliability, security and safety of Ontario’s electricity system.
Please read the full PWU submission to get a clear understanding of why splitting a Hydro One and selling the distribution system to the private sector is a bad deal for Ontario’s electricity customers and taxpayers.
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