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Hydro One sell-off not a risk not worth taking — mostly because of the public policy peril, not financial risk.
As Hydro One is slowly sold off, it won’t be so much missed as misunderstood. And misrepresented.
Misunderstood, because most people living in the Greater Toronto Area have never dealt directly with Hydro One and might reasonably wonder what, if anything, its sale has to do with rising electricity bills. (Answers below.)
Misrepresented, because a political fight over the sell-off of this provincially owned utility is obscured by predictable government contortions and opposition distortions. (Miscalculations below.)
Hydro One is back in the news thanks to the foresight of Ontario’s New Democrats. Wielding the balance of power during the minority legislature of 2011-14, they goaded the governing Liberals into creating a new Financial Accountability Office (FAO), patterned on budget watchdogs in Ottawa and Washington.
The FAO’s first report (first revealed by the Toronto Star’s Robert Benzie last week) takes the shine off the glossy propaganda put out by a Liberal government trying to squeeze fresh cash out of its aging electricity utility. Deconstructing the privatization plan, it predicts a big hit to the province’s budget debt and deficit in future years — because long after the initial windfall from selling off 60 per cent of the utility is spent, the treasury will have lost a recurring source of cash flow.
The opposition pounced, appropriately, on the seeming disconnect between the cabinet’s secret calculations and the FAO’s public methodology. Who’s right?
By its own admission, the report raises more questions than it answers. The Liberals first flagged a possible sale ahead of the last provincial election 17 months ago, but the debate began 17 years ago when the PC government of Mike Harris launched its own ideologically driven privatization agenda.
For the rest of this column, click here: http://www.thestar.com/news/queenspark/2015/11/01/why-privatizing-hydro-one-is-proving-politically-costly-cohn.html