At their May 26th meeting, City Council’s Executive Committee unanimously voted to avoid even talking about the Wynne Liberals’ plans to privatize Hydro One. In this deputation Tim Maguire describes the serious, negative impacts privatizing Hydro One will have on Toronto’s communities and the services our members deliver.
Dear Mayor Tory and Members of the Executive Committee:
RE: EX 6.21 Privatization of Hydro One
I am writing to you to express Local 79’s strong support for the recommendation contained in EX 6.21, Privatization of Hydro One.
It is highly appropriate that the City of Toronto take a clear position against the Liberal Government’s plan to privatize Hydro One. In fact, a number of commentators have already publicly expressed concerns about the loss of accountability, diminished capacity for the public to direct Hydro One to pursue environmental and other public-interest policies, and the loss of a reliable income stream for the Government of Ontario. Consider the following examples.
- The independent Officers of the Ontario Legislature, including the Auditor General, the Ombudsman and the Information and Privacy Commissioner, recently raised concerns about loss of accountability and transparency should the sale proceed.
- The Canadian Union of Public Employees (CUPE) National recently released a report by Dr. Douglas Peters, former Chief Economist for TD Bank and Secretary of State (Finance) in the Chretien government and Dr. David Peters, professor of business administration at the University of Guelph-Humber in Toronto. The report found that beyond the principled questions of accountability, transparency and the ability to direct public-interest projects, the sale of Hydro One just doesn’t make economic sense.
- Recent polls show that Ontarians in general are opposed to the sale.
Although Toronto Hydro’s rates are set separately from Hydro One, through the Ontario Energy Board, creeping privatization will create an upward pressure on rates across Ontario. The record on privatization is already clear, and as the Summary indicates, “Nova Scotia’s privatized electricity system has resulted in the highest electricity prices anywhere in Canada.” Increasing rates would put additional operating pressures on a budget that is, quite frankly, already stretched too thinly to support the services we value.
Additionally, although we are told that the sale of this valued infrastructure will support investment in transportation infrastructure, the benefit to Toronto is not entirely clear. Selling 60% of Hydro One would mean funnelling up to 60% of Hydro One’s annual revenue to private shareholders. This could mean a net loss to provincial coffers of at least $338.8 million per year.[1] At the same time, public transit in Toronto – as across the province – runs at an operating deficit. We absolutely need to build more transit, but at a time when municipal and provincial budgets alike need more revenue tools, reducing revenues will only create more pressures on public transit and other services. These pressures cannot help but trickle down to other areas and negatively impact provincial and City of Toronto budgets.
Further, Bill 91 will do more than just privatize Hydro One. Bill 91 introduces outright exemptions to the departure tax for small municipal utilities and significant reductions in the departure tax for larger municipal utilities (from 33% down to 22%). In short, it sets the stage for privatization of local hydro utilities across the province.
The Liberals did not campaign on promises to privatize. Premier Wynne was not elected with a mandate to sell off one of Ontario’s most important infrastructure legacies. On the contrary, the Wynne Liberals campaigned on a promise to consult with Ontarians on key issues. Yet Bill 91 uses the Government’s majority to force through an unpopular and near-sighted sale with long-term negative impacts.
The City of Toronto will not be immune from those impacts. The budget pressures the loss of Hydro One revenue will create for the province will inevitably reach down into Toronto’s own ability to provide services. Therefore, I urge you to clearly and unequivocally declare the City of Toronto’s opposition to the sale of Hydro One
Yours truly,
Tim Maguire
President
[1] Peters and Peters. Why the Province of Ontario Should Not Sell Part of Hydro One. Toronto, 2015. Page 3.
