Lining up at the trough in Ontario

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Only now do we find out how much Ontarians paid out to Tory insiders.

Over $400 a word! That's what a senior Ontario Tory received from Hydro One when he wrote a one-page e-mail justifying its privatization in early 2002.

Not long ago, The Globe and Mail documented over $5.6 million in untendered contracts handed over to four top Progressive Conservatives in Ontario by the utility in a secret program to lobby the government to sell the company to waiting investors.

Talk about lining up at the trough. Just imagine how much worse it could have been if the Communication Energy and Paperworkers Union of Canada (CEP) and the Canadian Union of Public Employees Union (CUPE) had not successfully challenged the legality of privatizing Hydro One in the Ontario Court of Justice. Thankfully, we (and the owners of Hydro One, the people of Ontario) were victorious in April 2002.

The Mike Harris government set the stage in 1998 when they broke up the publicly-owned Ontario Hydro into five separate corporations — and look at the chaos we have had since that time. Hydro One — the transmission arm — was created amidst repeated pledges that they would keep the grid public (the grid is the network of transmission lines throughout the province). As a public entity it had served Ontario well — even through the 1998 ice storm — and yet, the Tories were intent on selling it off. They tried to fast track a plan for Hydro One privatization at the end of 2001, but their plans were derailed by the court ruling in April 2002. A few months later the government scrapped the plan to privatize Hydro One. Public opposition had averted the largest privatization in Canadian history.

Only now do we find out how much Ontarians paid out to Tory insiders:

  • Paul Rhodes, communications director of the Conservative election campaign and former spokesperson for premier Mike Harris, received $335,237 for 81 pages of “communications advice” (such as how the province had to privatize Hydro One immediately);
  • Mike Courley, former deputy finance minister and advisor to then premier Ernie Eves, (on behalf of either himself or his corporate entities) received a total of $3.7 million for his services. What did Hydro One have to show for this expense? A one-page e-mail, discussing the best ways to put forward arguments in favour of privatization;
  • Leslie Noble, co-chair of the Conservative election campaign, received $250,000 for “advice on privatization.” She produced a three-page e-mail and two slide presentations. In one slide presentation, Noble gave an insider's view of who was pushing privatization in Harris' cabinet, and who was not;
  • Tom Long, senior Conservative strategist, received $1.3 million through two of his companies. From all accounts, all Hydro One received in return was a memo recommending the utility deliberately underprice its stock to make the privatization more successful for investors — robbing citizens and taxpayers of its value.

All in all, a total of $5.6 million dollars wasted on another Tory boondoggle. So, now that the truth has come out about the pork-barreling antics of the previous government, what is the status of electricity policy in Ontario?

In August 2003, Ontario and the northeastern United States experienced a major blackout. Deregulation of electricity was a major cause of this crisis. Although privatization of Hydro One had been stopped, deregulation of the price paid to private producers was firmly in place.

Did the new Liberal government reverse the trend towards privatization and deregulation and halt the flow of profits to the private sector?

During the pre-election campaign, now-premier Dalton McGuinty committed his party to public power and said the market was dead. Public power in Ontario means power at cost. What we got instead was more of the same.

How do we ensure that there is no more lining up at the trough for profits that rightfully belong to the people of Ontario?

  • Return all generating stations sold and leased by the Conservatives to public ownership;
  • Protect the environment through aggressive conservation legislation;
  • Keep new generation within the public sector;
  • Restore at-cost electricity pricing. By removing the cap and increasing electricity rates for consumers, even more profits will flow to private producers.

All of the money that lined the pockets of Tory friends and insiders who executed these boondoggles — both while in government and after — was public money which ought to have been invested in improving our public hydro system. Similarly, profits are now being siphoned off unnecessarily to private electricity corporations while Ontario consumers are being asked to pay still more for these wrong-headed Liberal and Conservative privatization policies. Let's get it right! Let's restore public power now throughout Ontario.

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