Ontario Premier Kathleen Wynne is pushing ahead with the privatization of Hydro One in the face of mounting opposition and a raft of polls that show the move is broadly unpopular.
On the first day of the fall legislative session, in which the selloff dominated Question Period, Ms. Wynne argued she must privatize the massive electricity company if the government is to have any hope of raising the money it needs to build new light rail lines, commuter trains and highways.
"Why is this a hill to die on? Because investing is a hill to die on, investing in the transportation infrastructure, the infrastructure around this province that we know we need," the Premier told reporters Monday. "This kind of investment is absolutely necessary across the province."
The Liberals are planning to sell 60 per cent of Hydro One on the stock market in one of the largest privatizations in a generation in Canada. The sale is projected to raise $9-billion, of which $5-billion will be used to pay off debt and $4-billion put toward transit and other infrastructure. It is set to start with a 15 per cent initial public offering.
The launch of the IPO is imminent, according to people familiar with the deal. The full underwriting syndicate has been chosen and the prospectus is expected to be filed later this week or early next, the sources said. After that, the government and its Bay Street advisers will start marketing the stock to investors. The massive IPO is thought to be worth about $2.25-billion.
Pushing ahead now is politically risky for the Liberals, who could inadvertently tarnish their federal cousins' brand ahead of the Oct. 19 federal election. An Environics poll earlier this month found 83 per cent of Ontarians oppose selling Hydro One, with half of respondents saying they would be less likely to vote for the federal Liberals as a result, even though they have nothing to do with the sale.
The government's own internal market research, obtained over the summer by the NDP in a freedom of information request, showed 73 per cent of people polled preferred Hydro One be owned by the government. And a Mainstreet Technologies survey last spring found 60 per cent of respondents were against privatization.
Progressive Conservative Leader Patrick Brown, who took his seat in the legislature Monday after winning a by-election, opened Question Period by arguing that a privatized Hydro One would lead to higher electricity rates and drive manufacturing jobs away.
"The public does not support this fire sale. The Liberals should hit the pause button, given the overwhelming public opposition. Mr. Speaker, how can the Premier callously proceed with this sale despite opposition well in excess of 70 per cent?" he said.
The issue has led to a role reversal for the Liberals and PCs, with the Tories – usually the party most receptive to privatization – slamming the sale of Hydro One by Ms. Wynne's centre-left government.
NDP Leader Andrea Horwath, meanwhile, spent much of the summer touring the province and holding anti-privatization town halls. She argued the government is privatizing by stealth, since it did not bring forward the privatization plan until after the past election.
"The Liberals have no mandate," she said in Question Period. "They have no public support for the selloff for Hydro One."
But if this was affecting Ms. Wynne on the first day of the session, she wasn't showing it. She dismissed the PC and NDP pushback as "ideological or even inconsistent arguments."
"The reality of governing is that there are very difficult choices," she said, "and decisions that have to be made."