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streetwise

Ed Clark’s frustration was palpable. Sitting on a podium in a drab government conference room one day in 2015, the newly retired chief executive of Toronto-Dominion Bank was fresh meat for the Ontario political press gallery.

As an adviser to Premier Kathleen Wynne, and as the provincial government’s point person for its privatization of Hydro One Ltd., Mr. Clark was given the task of leading a press conference for the utility’s $1.8-billion initial public offering. The event quickly morphed into a miniature circus.

Mr. Clark was asked few substantive questions about the government’s use of proceeds, or about plans to save ratepayers money. Instead, he was pressed over and over again to justify the pay package for Hydro One’s new chief executive officer.

Calmly, he explained that Hydro One was about to be a public company, which meant that it needed to pay market rates for newly hired executives. But the political press gallery, which loves a good controversy, didn’t buy it.

Fast forward three years. Doug Ford doesn’t seem to either.

In a media briefing on Thursday, one that morphed into a circus of its own, Ontario’s Progressive Conservative Leader attacked the pay of Mayo Schmidt, Hydro One’s CEO, then said his first act as premier, should he win the June election, would be to fire Mr. Schmidt and replace all of the directors on Hydro One’s board.

A premier has no power to fire the CEO. Even Mr. Ford’s energy critic, Todd Smith, acknowledged this – in the same briefing.

Of course, runaway executive pay is no joke. But Hydro One’s executive compensation isn’t out of this world, not compared with pay at similar Canadian companies.

In its annual documents outlining executive pay, Hydro One lists nine companies as its utility peers. The average CEO pay last year for these nine was $6.1-million. Mr. Schmidt’s pay: $6.2-million.

Mr. Ford’s diatribe was politically calculated. That’s understandable, because Ontario voters are angry about sky-high hydro rates. But the promise was so far-fetched, it was actually sad.

Ever since Hydro One’s IPO was unveiled, Ontario Conservatives have been obsessed with the deal, spreading misinformation about the company. Somehow they’ve forgotten that they were the first party to try to privatize it, under former premier Ernie Eves.

The truth is that lowering hydro rates is unbelievably complicated. It is a convoluted system that has been mismanaged since the 1980s, when nuclear plant construction started to go way over budget. These plants, which are by far the biggest providers of Ontario’s power, are now being refurbished at a cost of billions of dollars − vastly more than Hydro One’s entire executive team makes.

Somehow, Ontario’s opposition parties – including the NDP, whose union base is furious about the privatization because it has demanded more efficiency from workers – forgets that Hydro One doesn’t set the rates it charges. It must get approval for any rate changes from the Ontario Energy Board, which factors in issues such as employee compensation when making its decisions.

These opponents don’t like hearing that Hydro One’s privatization was actually pretty successful. The government kept selling shares into a hot market before utility stocks tumbled, which means Ontarians got top dollar for the 53-per-cent stake that the government unloaded in successive share sales. It also found a way to pay Bay Street remarkably low fees for these offerings.

Facts don’t matter for some voters, though. Hydro rates were often discussed during the Conservatives’ leadership debates this spring and candidate Christine Elliott was the proverbial adult in the room, promising to tackle them − but also being honest with voters, telling them that there’s only so much that can be done because it’s a very complicated system. She lost, by the slimmest of margins, to Mr. Ford.

Aspiring politicians tend to make all sorts of campaign promises that they miraculously forget about once they’re in power. That’s not the problem here. What’s alarming was how cavalierly Mr. Ford made the pledge, plainly ignoring the most basic rules about what government can control.

Anyone who thinks that’s just a campaign trick need only look south of the border to remember that bold, populist politicians don’t change once they’re in power.