Given that every time we switch on a light we’re reminded about the shortcomings of the provincial government, you’d think people would be up in arms about the latest Wynne boondoggle, the privatization of Hydro One.
Despite overwhelming condemnation and numbers showing the ill-conceived plan will actually cost the province far more than the deal could ever provide, the Liberals intend to push ahead, the well-being of Ontarians be damned.
The deal has been universally panned, supported only by the profligate government and those on Bay Street set to rake in billions. Just how detrimental the plan is was revealed last week by the province’s Financial Accountability Officer, Stephen LeClair, who released a damning report saying the sell-off will actually increase the province’s debt woes, stripping up to $500 million from the province’s revenues in the near term and potentially much more in years to come.
LeClair’s report said it would be cheaper for the province to borrow the money needed under historically low interest rates – something the federal Liberals, with their commitment to invest in infrastructure, have already figured out.
Still, Wynne is pushing ahead to sell off 15 per cent immediately, ramping up to 60 per cent. The total sale is supposed to net $9 billion, but some reports have downgraded that closer to $7 billion. Of that, LeClair estimates as little as $3.8 billion could make it to Wynne’s overhyped infrastructure plans – a drop in the bucket in the government’s unrealistic $130 billion target. In the end, the province will be out an asset that pays some $750 million a year, the public will lose out on infrastructure it has paid for over decades, and already out of control rates are likely to climb even higher.
So, a project Wynne has no good rationale for and zero credibility to defend will go ahead despite all the negatives.
Well, there is an upside if you’re an already overcompensated Hydro One worker – a large part of why your electricity prices have skyrocketed in recent years, 12.9 per cent this year alone – who’ll share in the proceeds of the sale, unlike you. That fits with Wynne, who is all about buying public sector union votes, not matter how much damage it does to the province, its economy and your wallet.
Those behind the deal will get their cut, and private owners can count on guaranteed profits – Hydro One has posted a seven to nine per cent return on equity – i.e. profit – each year. With no competition and rates set by agency fiat, the money will roll in … at our expense.
The short-term cash infusion – the sole reason for which is the government’s hope to present a balanced budget in time for the next election – will be quickly squandered by a government that’s proven time and again it can’t be trusted to spend money wisely, justly or even legally.
To pave the way for this sellout of Ontarians, the Liberals have changed laws that would have made the sale illegal and that would put any sale proceeds towards the company’s massive debt rather than frittered away on pet projects of Wynne’s choosing.
In short, the only thing that would stop Wynne from another boondoggle would be acknowledging the idea is short-sighted, dim-witted and of no redeeming virtue while coming at a tremendous cost to the people she’s supposed to represent rather than a minority of favoured interests. That would require the kind of smart, ethical decision making that Wynne is incapable of delivering.