- Start reading from here: Ontario's electrical issues
To be noted as well is that in September CUPE, the Canadian Union of Public Employees, announced that it is suing premier Kathleen Wynne and the government of Ontario, alleging that they have mixed government business with party interests. This on top of not consiulting the electorate, unethical in politics to say the least.
And as is typical, these poor decisions are downloaded upon electricity consumers, ratepayers, and often those least able to afford them.
Consider merely the Debt Reduction Charge (DRC) found on your electrical bill. It has been in place since 2002, a levy of 0.7¢ per kWh used. May not seem as much, but it adds up. Why should end-users pay for poor management? The massive debt is not due to, as some assume, infrastructure development or even construction loans, although those do factor in. A large part of the blame lies with the decisions of upper management and their incredible compensation packages. At one time a generation ago a job at either utility was a job for life, and the number of vice-presidents there was large, many wondered why so many?
The Mike Harris-led Conservatives heard this, after the Peterson Liberal government and the surprise Rae majority NDP government, combined with a slew of poor fiscal decisions led to their election. Many revile the “Harrisites” to this day, with quite some justification. But simply consider that Harris inherited a debt-ridden provincial utility. (In fact, the NDP almost tripled the provincial debt 1990-1994 to $90.7 billion.) Under the Liberals the profligate spending has continued, the debt of Ontario is presently projected at being $308.3 billion by year's end. More than tripling in 22 years. The Harris governments attempted to curb the debt with unpopular decisions, but entitlement in the ranks of government as well as unions led to a Tory defeat. Left-of-centre has ruled the day since Harris' successor Ernie Eves lost in 2003 to Dalton McGuinty, who ranks, along with Wynne, among the most duplicitous Premiers that Ontario has ever had.
Ontario Hydro was one of the largest electricity corporations in North America in the 1990's. It was reorganized by the Harris government into five companies, the two most important public assets being OPG – Ontario Power Generation – and Ontario Hydro. In 1999 the latter's stranded debt was $19.5 billion, leading to the 2002 decision by the Eves Tory government to impose the DRC.
Entitled management
That was not the only headache that Eves faced. Eleanor Clitheroe was the first president and CEO of Hydro One. A lawyer by education, she was deputy minister of finance in the NDP Rae government from 1990-93 (the years when the debt ballooned), and then appointed to one of the many vice-presidential posts at Ontario Hydro. Five years later she took over the helm of Hydro One at the regal salary of $2.2 million.
Clitheroe was caught abusing her expense account to a tremendous degree, and was fired by the government because of this. She then, after such a short stint at the utility, sued taxpayers for $6 million in severance pay. Fortunately, unsuccessfully. Why should a fired employee merit severance pay?
To add insult to injury Clitheroe also sought to have her pension increased form $25,000 a month to $33,000. Today, 16 years later, that first sum is more, monthly, than a full-time minimum wage worker's gross annual salary! Clitheroe then served as Chancellor of the University of Western Ontario until 2004. In 2005 she was ordained deacon of the Anglican Church of Canada. Previous entitlement issues and outright greed makes that career change most puzzling.
Clitheroe was not the only person with lucrative incomes from the public utility. Golden handshakes and early retirement at the top were the norm, according to a Hydro One manager known to this writer.
Once the horse was out of the stable Eves' government passed legislation cutting Hydro One executives' compensation. However, it would be fair to say that to this day salaries and pensions granted in the past contribute to the debt of the public utility, now partially being reduced by the ratepayer with the DRC.
Selling valuable assets
Kathleen Wynne's present government did not include in their pre-election platform the goal of privatizing Hydro One. Once in power with a majority the Liberals lost no time announcing such intent, recently selling off a large chunk of what is a public asset. A decision, where taxpayers and voters should have been consulted.
It is true that the Harris government's intention was to have both OPG and Hydro One operate as either private or joint public-private businesses rather than Crown corporations. However, the debt load is so massive, that the strategy of having the energy consumer work on reducing this burden has been employed for 14 years.
Wynne and her privatization czar Ed Clark – himself a former wealthy banker, with a privileged perspective, – have “unloaded” two 15-percent tranches (a part of the assets as per a financial agreement) of Hydro One stock. Quietly. Without voter approval. And little media attention. Another 30% of Hydro One is also to be sold, making the government a minority shareholder in a public utility, a monopoly to boot. Thus short-term improving the optics of the huge Liberal budget deficit. But what about the Hydro One debt? Again, the energy user, ratepayer will be left on the hook. No potential purchaser would want to assume a pro rata portion of such a huge debt. Clark and Hydro One keep things secret – what part of the debt, if any, will the purchasers assume? And taxpayers have 30% less equity in a public asset. Shocking mismanagement by any standard.
It is incumbent that voter and taxpayer pressure through the media and other available avenues ensures that both Hydro One and the provincial government be transparent and fair in their dealings either running or selling public assets, owned by Ontarians, not upper management or politicians.
TÕNU NAELAPEA
