Hydro One: Do not sell our Crown Jewel

The provincial government’s recent sale of a large batch of shares in Hydro One was not good policy. Its current plan to sell the remainder of the shares is an even worse policy option.
It is commonly accepted that both those policy options are based on the urgent need to find ways to fill a big hole in the province’s finances as soon as possible. It is also relevant that the government has insisted that it will balance the provincial budget by 2017-2018.
The government itself has advanced the position that it needs to identify funds to invest in Ontario’s crumbling, inadequate and seriously under-funded infrastructure.
In our previous analysis of the thinking behind those three considerations, this newspaper has put forward its own arguments against the sale of any significant amount of Hydro One shareholding. Our arguments were supported by many specialists in the field of public finance and by affected interest groups.
The time has come for us to reiterate and broaden our position on this matter.
On principle, we believe that a society’s major public utilities should not be in private hands because the services they provide are too critical to be left to the vagaries of the “free market”. Those services are not just important for the functioning of the economy. Government ownership and control of major public utilities such as Hydro One are especially important in order to guarantee the survival of segments of the population that cannot afford the cost of public services that are priced and delivered on a purely commercial basis.
We also hold the view that it is generally not sound policy to sell major assets which provide significant and reliable revenue to the public purse. The data provided by the specialists clearly indicates this is the case with Hydro One, and that in that financial regard, it is among the best performing Crown agencies.
Equally important is that based on a conservative valuation of the assets of Hydro One that was provided by one specialist in a mainstream newspaper, the recently sold shares were disposed of at a price lower than their true market value.
Furthermore, we are not amused by the irony that the sale of the first batch of shares was opposed by the Conservative Party of Ontario, which had long advocated for the privatization of Hydro One. At least the NDP has been consistent in its stand against privatization.
On the other hand, we must agree with all those who call for the public utilities to be free from micro-management by politicians and by boards of directors preoccupied with the purely partisan agenda of their political masters. While it is normal that the government of the day should set broad policy directions for utilities, the boards and executive management need the independence to operate at arm’s-length from “political interference”.
That said, The Caribbean Camera does not agree with the full or partial privatization of Hydro One.