Doug Ford says his first act as Ontario premier would be to fire the head of the partly privatized Hydro One and the utility’s board of directors if his Progressive Conservatives win power in June.
Mr. Ford labelled Mayo Schmidt the “six million dollar man,” in one of his initial policy announcements as Ontario’s opposition leader, and blamed the CEO of Hydro One for the province’s high electricity prices.
Mr. Schmidt, who runs the former Crown corporation responsible for the transmission of much of Ontario’s electricity, received a $1.7-million raise last year for a total salary of $6.2-million.
“You can take this to the bank, the CEO is gone and the board is gone,” Mr. Ford said during a news conference on Thursday. “It’s done, the party is over.”
The government’s energy policies have been blamed for soaring electricity bills across the province over the past decade. The issue has become an explosive one for the Liberals, particularly in rural Ontario, prompting Premier Kathleen Wynne to reduce rates by 25 per cent in 2017.
Ontario PC Leader Doug Ford is pledging to remove the CEO of Hydro One if elected premier. PC energy critic Todd Smith acknowledged that the government can only replace the company’s board of directors, and only the board can fire the CEO.
The Canadian Press
Delivering a populist message and promising to lower those bills further, Mr. Ford said Mr. Schmidt and his hydro executives are elites benefiting at the public’s expense. However, the PC Leader could not say exactly how he would fire the head of a company partly privatized by Ms. Wynne two years ago or how that would lower electricity bills. The government still has a 47-per-cent stake in the utility.
The CEO’s severance could cost more than $10-million, according to the company’s annual report. “We’re going to eliminate the outrageous salaries and bonuses for these people,” said Mr. Ford. When asked by reporters how his move wouldn’t trigger paying severance, Mr. Ford could not answer.
After taking a few questions on Thursday, he asked Tory energy critic Todd Smith to provide specifics on the plan and left the room. Mr. Smith quickly acknowledged that the Ontario government could not directly fire the CEO.
“We don’t have the ability to go out and say we are firing the CEO at Hydro One,” said Mr. Smith, only minutes after his leader said Mr. Schmidt was gone if he was elected premier.
“We certainly have a tool at our disposal to get rid of the board at Hydro One, which is going to get the message loud and clear from Doug Ford and the PCs that we want to get these executive compensation packages under control,” Mr. Smith added.
According to the agreement signed by Ontario when it sold over half of Hydro One, the province can call a shareholders meeting to replace the company’s board. However, only the board can dismiss the CEO. According to Mr. Smith, after winning power, Mr. Ford would make it clear that “he’s going to get rid of the board unless the board gets rid of [Mr. Schmidt] first.”
While Ontario’s Liberal government brought in measures last year to lower electricity rates by 25 per cent, many in the province remain upset with the rapid increase in prices. According to a study from the right-of-centre Fraser Institute, residential electrical costs increased by 71 per cent in Ontario between 2008 and 2016. The government has defended the increased rates as the cost of rebuilding a threadbare electrical system, which no longer suffers from rolling power failures, and closed all its coal-burning plants.
“Ontario’s electricity problems need more careful analysis and solutions than swinging an axe at parts that garner outrage on talk-radio call-ins,” said energy consultant Tom Adams. He said firing the head of the transmission company, which doesn’t produce electricity, would do nothing to lower electrical bills.
During Question Period in the legislature on Thursday, Ms. Wynne compared Mr. Ford’s promise to fire people to moves by U.S. President Donald Trump
“I have no idea how that will help any person in the province of Ontario,” she said. “The reality is that that will not take one cent off anyone’s electricity bill. You know, there’s a guy to the south of us, Mr. Speaker, who is governing by firing, and I’m not sure that’s going so well,” said Ms. Wynne. She dismissed Mr. Ford’s announcement as “a slogan masquerading as policy.”
Hydro One said in a statement that Mr. Schmidt’s compensation costs each of its customers two cents on their monthly bills − a rate that hasn’t changed since privatization. According to the company, the CEO’s team executed $114-million in savings last year. “We will not engage in politics, however our customers deserve the facts,” the utility said.