Ontario's Liberal government is giving white-collar Hydro One employees raises and company stock to buy labour peace before privatizing the electricity utility.
The three-year deal, ratified Tuesday by the Society of Energy Professionals, grants 1,800 workers a 1.5-per-cent-raise, a 3 per cent lump-sum payment and stock equivalent to 2 per cent of their current salary every year for the next 12 years.
In a statement, Energy Minister Bob Chiarelli said the extra compensation would be paid for through concessions from the workers, including larger pension contributions and the right for Hydro One management to contract out some of their work. He described the deal as "net-zero," and said it would not cost the province anything more.
But Mr. Chiarelli's office was unable to provide all the numbers to back up this claim.
The Society has been one of the most vocal opponents of selling Hydro One, running an ad campaign earlier this year warning that the privatization plan would jack up electricity rates. Government sources had said getting a labour deal with them was necessary before selling the company.
"We are pleased that the Society of Energy Professionals has ratified a net-zero collective agreement with Hydro One, which will have a favourable impact on rates for years to come," Mr. Chiarelli's statement said.
The Society of Energy Professionals declined to comment.
Mr. Chiarelli's spokeswoman, Jordan Owens, said the raise will cost $5.3-million, but the company expects to save $5.64-million from contracting out. The pension concessions will see employees hired before 2005 pay 39 per cent of the contributions toward their pensions, up from 31 per cent, while employees hired after 2005 will have to pay 50 per cent. The rest will continue to be paid for by the province's electricity users.
The stock options and lump sum will go only to current Hydro One employees; new hires will not receive either.
Ms. Owens said the pension changes are equal to the value of the stock options and lump sum. But she said she did not have the total costs of the lump-sum payment and the stock options, or the savings from the pension concessions.
What's more, the Liberals have already barred all independent oversight of Hydro One, keeping much of the company's financial data secret and making it hard to verify the "net-zero" claims. Previously, the province's auditor-general and financial accountability officer, among others, had the right to investigate Hydro One. The Liberals changed the law in June, hoping less oversight would make Hydro One more attractive for private investors.
Progressive Conservative energy critic John Yakabuski said the government's math is merely "sleight of hand."
"Nobody really seems to be able to say what net-zero really means," he said. "To most people, 'zero' means 'nothing' – not payouts for the next 12 years."
NDP MPP Peter Tabuns argued that, since the value of the shares in the company is still not known, it is actually impossible for the Liberals to know what the deal will cost.
"We don't know what the shares are worth, and with all the changes in regulation around Hydro One, we might never know what the deal looks like from the inside," he said.
The Society represents white-collar professionals at Hydro One, including engineers, accountants and auditors.
The deal is similar to those the province struck with the Power Workers' Union, which represents frontline workers at Hydro One and Ontario Power Generation, in the spring. Those contracts also contained raises, lump sums and stock.
The government plans to start privatizing Hydro One later this year with an initial public offering of 15 per cent. Over time, the government wants to sell 60 per cent of the company to the private sector.