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Ontario Energy Minister Glenn Thibeault arrives to speak with the media in Toronto on Monday Sept. 12, 2016.

The Canadian Press

Ontario’s government is facing tough questions about how much it knew about a decision by Hydro One Inc. to change executive severance last year, a move that includes a provision that penalizes government intervention in the partially privatized utility over even a corporate takeover.

Glenn Thibeault, Ontario’s Energy Minister, was asked by opposition politicians and reporters more than 20 times on Thursday whether his department knew about a decision taken by the board of directors at Hydro One in November to nearly double the severance paid to the utility’s chief executive if he is fired after the board is replaced or after the government interferes with the company. Mr. Thibeault would not say whether he had been made aware of the decision.

“The one thing that I wanted to make clear is that we’re shareholders of Hydro One, not micromanagers of it. The decisions regarding compensation of their executive are made by the board, not by the government,” he told reporters.

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Premier Kathleen Wynne’s government began to sell shares in Hydro One in 2015 to raise money for infrastructure projects. The Ontario government now owns 47 per cent of the company, which controls a large swath of the province’s electrical transmission system.

“The government can still remove the board if there is scandal or mismanagement happening at Hydro One, we still have that,” Mr. Thibeault told reporters.

Under its agreement with the partially-privatized company, the government can replace the utility’s board. However as first reported in The Globe and Mail on Wednesday, Hydro One’s board of directors voted to increase severance for executives if they are fired after the government exercised that power or passed any legislation aimed at either capping executive pay or that negatively impacts Hydro Ones’ ability to meet performance targets.

Contained in a footnote in the company’s latest shareholder proxy circular is information on the decision that details how the changes made by the board to severance terms are more favourable for executives if the board is replaced by government action, rather than if the company is taken over. Under the compensation policy, if a change of control in Hydro One were to take place because of a change in ownership, share units awarded to executives would remain under existing terms – which could mean they would require several years before an executive could benefit from them and performance targets would still need to be met.

However under the additional provision introduced in November, if a change were to occur because of a government action, share units awarded could be cashed immediately and executives would be deemed to have achieved 100 per cent of their performance target goals.

In a statement on Wednesday, the company said its recent decision was made after it launched a review of its governance policies early last year and that some of the changes addressed Hydro One’s “unique ownership structure.”

Doug Ford, the province’s Progressive Conservative Leader, vowed last week that he would fire the board and replace CEO Mayo Schmidt if he’s elected premier on June 7. On Thursday morning, Mr. Ford said he was “disgusted” about learning of the board’s move and demanded their immediate resignation.

“If they have any respect for their customers, any respect for Ontario, any respect for the people, they should resign, immediately, today,” he said during a campaign stop in Toronto. “If they don’t, when I’m premier, I’m kicking each and every one of them out the door.”

He warned that he might seek to remove more people after the CEO and board are removed. “The executive is going to be right behind them,” he added.

The New Democrats said the government should explain what it knew about the board’s move. “How could the Liberals not have known about the move? They’re over 40 per cent shareholders in Hydro One,” NDP MPP Cindy Forster said. “If they didn’t know, I’d say they were negligent.”

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A spokeswoman for Hydro One said that the company’s board would be responding to Mr. Ford on Friday.

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