Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday May 18, 2018
Sound bytes and witch hunts won’t quell hydro anger
According to Environment Canada, the odds of getting hit by lightning are lower than one in a million.
Unless you’re the Kathleen Wynne Liberals. In that case, you get zapped pretty much any time the subject of hydro comes up in Ontario. It doesn’t matter whether the specifics are big or small, the subject is a lightning rod for Ontarians’ anger and discontent, both with hydro rates and with the Liberals.
It happened again this week, with predictable results. But let’s try to drill down a bit to get past the rhetoric and sound bytes.
CBC was first to report that, back in January, Hydro One board members voted to boost their own compensation. After that boost, those part-time jobs pay $185,000. And at the time of the board decision, Hydro One’s share price was falling.
Predictably, outraged followed from all the usual players. Doug Ford waxed apoplectic, promising to fire the bums and the CEO as well. Andrea Horwath reminded Ontarians, again, that we wouldn’t be in this position if the power utility was still under completely public control. And Kathleen Wynne, still smoking from the lighting strike, also condemned the raise while saying her government has already planned a review of utility governance including compensation.
All this sound and fury? It masks a difficult truth. Not one of the three parties has a believable, viable plan to really do what Ontarians want — to reduce electricity rates substantially and over the long term.
Consider: Horwath’s NDP promise to cut hydro rates 30 per cent. They will “end the oversupply of power” and “aggressively” renegotiate contracts. You don’t need to be an expert to recognize this is pretty loose talk. Cutting rates that much would probably mean selling power for less than it costs to make. How will that help?
The NDP also promises to buy back the part of Hydro One the Liberals sold to the private sector. That sounds like bringing back the good old days, but open your wallet first. Those shares have been appreciating in value. They will cost a lot of money. The government would need to use dividends it gets from the privatization to buy back the privatized share. Not only would be expensive, but it would take years, according to credible industry experts.
Doug Ford’s hydro solution is even less realistic. So he fires Hydro One executives and the board. (It’s not even clear he could do this since it is not a public company at this point.) What then? He’ll need a new board and a new CEO. That means his cronies and will replace the Liberal ones there now. Will they work for nothing? Hydro One CEO Mayo Schmidt’s salary sounds ridiculously high at over $6 million, but his wage and that of all the board is a drop in the financial bucket overall.
Beyond firing the CEO and board, and paying hefty severance penalties to do so, Ford has no plan for hydro. He is simply beating a convenient scapegoat, but he doesn’t have a better idea. And keep in mind it was Ford’s party that began the privatization of power under Mike Harris.
The Wynne Liberals? Sadly or not, it doesn’t matter because no one is listening to them.
Simplistic solutions won’t get the job done, and making Hydro One public again is a massive and expensive undertaking. No one in this election is being straight with voters, that much is clear. (Source: Hamilton Spectator Editorial)