Ontario Premier Kathleen Wynne has pulled an iron curtain over Hydro One, ensuring one of the largest privatizations in the province’s history will unfold in secret.
The Liberals’ omnibus budget bill passed a final vote in the legislature Wednesday. The legislation, which will allow the government to start selling off the Crown corporation on the stock market later this year, contains a raft of clauses that remove public oversight of the company.
The bill strips the provincial auditor-general, financial accountability officer, ombudsman and several other independent watchdogs of their right to investigate Hydro One and resolve customer complaints. It also bars freedom-of-information requests and shields Hydro One employees’ salaries from the Sunshine List of provincial workers earning more than $100,000.
These provisions all take effect as soon as the bill is signed into law – even though none of the shares may be sold for months and the government could remain the company’s majority shareholder for years as it slowly sells down its stock.
Ms. Wynne is selling 60 per cent of Hydro One in a bid to raise $4-billion to put toward building new transit lines; another $5-billion from the sale will go to pay down debt.
The Liberals argue that private investors will pay more for Hydro One’s stock if the company is not subject to independent oversight. Energy Minister Bob Chiarelli said last week that allowing public accountability officers to scrutinize Hydro One “would not be friendly to the securities sector.”
Auditor-General Bonnie Lysyk doesn’t buy that argument.
“If Hydro One is supposed to operate very openly and transparently – it’s going to be publicly traded – I don’t see how another layer of oversight negatively impacts its operation or impacts share value,” she said in an interview Tuesday. “I would think shareholders would get more comfort with an additional layer of oversight.”
With passage of the bill, Ms. Lysyk will be allowed to examine how Hydro One’s privatization affects the government’s public accounts – effectively, how much money comes into government coffers from the sale – but will be barred from looking at anything larger.
“We won’t be able to assess whether there is value for money from that sale,” she said.
Ms. Lysyk and seven other independent watchdogs took the unprecedented step last month of jointly writing Ms. Wynne asking to keep their oversight of Hydro One.
“The sale will be done in complete secrecy.… We will never know if we received a fair value, a true value for Hydro One or if the people of Ontario were short-changed,” Progressive Conservative Leader Patrick Brown said. “What are they trying to hide?”
NDP Leader Andrea Horwath vowed that, even after the legislation is passed, the Liberals will have a fight on their hands. The NDP has organized town-hall meetings, protests and a petition to whip up opposition to the sale. She said she hoped the pressure would be enough for the government to change its mind before it floats the initial public offering later this year.
Opinion polls suggest a majority of voters are against privatizing the electricity system, meaning the Liberals could be in for a bumpy ride as they press forward.
But Mr. Chiarelli dismissed such concerns this week. He compared the Hydro One sale to the Liberals’ introduction of the harmonized sales tax in 2010: The tax was unpopular at the time, but the government was re-elected anyway.
“There was an issue called HST, which was considered a horrendous initiative. The media was on it, I had to answer questions for it, et cetera,” he said. “There are very, very significant issues that you deal with in government that are the right thing to do moving forward. Or, at least, they are one of the right things that might be available moving forward.”Report Typo/Error