Hydro One workers ratify contract that gives them a raise, company stock

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Hydro One employees have ratified a new contract that gives them stock in the company, a raise and a lump-sum payment.

The Ontario government offered the generous deal to the Power Workers' Union in the spring in a bid to buy labour peace before the impending privatization of the utility.

As first revealed by The Globe and Mail in May – when the paper obtained internal PWU memos spelling out the details of the deal – Hydro One employees will get shares equivalent to 2.7 per cent of their salaries annually for 12 years, plus a 3-per-cent raise over three years and payouts equal to 3 per cent of their salaries.

Energy Minister Bob Chiarelli's office announced Monday afternoon that PWU workers at Hydro One have approved the deal.

PWU employees at Ontario Power Generation ratified a similar agreement last month.

The government said PWU members agreed to contribute more to their pensions and allow more contracting out of small tasks – such as landscaping or fixing doors – to offset the cost of the raises, cash payment and stock options.

"Both the PWU and Hydro One deserve congratulations for negotiating a transformative agreement during difficult negotiations," Mr. Chiarelli said in a statement.

"The terms of this three-year agreement are in line with the times. It recognizes that change was needed in electricity sector compensation to ensure long-term sustainability and fairness to ratepayers."

PWU president Don MacKinnon did not respond to a request for comment.

Mr. Chiarelli's office said the workers will contribute 2.7 per cent more to their pensions, which will bring their contribution ratio to 40 per cent by the third year of the deal (the other 60 per cent is paid by electricity ratepayers). After 10 years, their contribution ratio will be 45 per cent.

Two years ago, the Auditor-General took aim at generous pensions in the power sector, in which employees paid as little as one-fifth of the contributions, with ratepayers picking up the tab for the rest.

Premier Kathleen Wynne is planning to sell off 60 per cent of Hydro One to the private sector, starting with a 15-per-cent initial public offering later this year, to raise $5-billion to pay off debt and $4-billion to fund new transit lines.

The NDP tried to have the Liberal government found in contempt of parliament for offering shares in Hydro One to the power workers before the privatization was approved by the legislature. Speaker Dave Levac ruled against the NDP.