LCBO, Beer Store, OPG, Hydro One All In Play As T.D. CEO Ed Clark Readies Privatization Report for Premier Wynne.

The LCBO, Beer Store, OPG, and Hydro One are all in play as T.D. CEO Ed Clark - pictured above - readies privatization report for Ontario Premier Wynne.

The LCBO, Beer Store, OPG, and Hydro One are all in play as T.D. CEO Ed Clark – pictured above – readies privatization report for Ontario Premier Wynne.

To overcome massive public dislike for the privatization of Ontario’s electrical generation, distribution and transmission  utilities, Premier Kathleen Wynne would have to first ratchet up concern over the province’s deficit, said Liberal pollster and chief strategist in Wynne’s recent election campaign, David Herle. And he just doesn’t think that is going to happen.

Three times more people trust the public sector to run the Crown corporations Hydro One and Ontario Power Generation (OPG) compared to those who would trust the private sector, said Herle, speaking to the Ontario Energy Association’s annual conference in downtown Toronto Wednesday.

Wynne, who received her first majority mandate from Ontarians in last spring’s election, appointed an advisory council on April 11 to examine how the government could ‘maximize the value’ Ontarians get from Hydro One, OPG and the LCBO.

The council, chaired by TD Bank Group president and CEO Ed Clark, is due to report its results before the end of the year.

A decision to slay Ontario’s massive deficit by privatizing one or two of its electrical utilities may stir near-insurmountable public backlash, said two other top-level provincial Liberals close to the current government.

Former finance and energy minister Dwight Duncan and former co-chair of the Liberals’ most recent electoral campaign, Tim Murphy, told a packed house of utility executives at a meeting of the Ontario Energy Association last week that Ontario voters could turn on Premier Kathleen Wynne’s government if she decides to sell off parts of Hydro One or Ontario Power Generation (OPG) after she receives the advice of a deficit-cutting advisory council later this year.
“The politics are enormous,” said Duncan, speaking at the Ontario Energy Association’s annual conference in downtown Toronto. “It would consume their mandate – even a relatively modest deal, part of Hydro One or part of OPG or LCBO.”

The trouble with a recommendation to sell parts of or the entirety of Hydro One and OPG, is Ontarians’ perception that the utilities perform a public service, said Murphy. Any advice to do the same to the province’s liquor monopoly wouldn’t face the same pressure, he said.

The advisory council headed by T.D. CEO Clark was convened as the Wynne government  searches for ways to reduce its $10.5 billion deficit while trying to respond to a mandate from voters to beef up public infrastructure, most notably traffic-easing transportation.

The approaching report by  Clark’s advisory council has already stirred trouble between Hydro One and municipally owned electricity distributors, with Hydro One recently quitting the Electricity Distributers Association – the lobby group for electricity distributors – after it commissioned a report recommending some of Hydro One’s distribution assets be sold off to the municipally owned utilities.

Another big fight may be shaping up between the The Beer Store and the LCBO. Inside sources report that Clark’s number crunchers are pouring over the LCBO books and looking for ways to squeeze bigger profits out of the LCBO for the provincial treasury.

These sources report that one of the options he is looking at is giving the LCBO the lucrative mandate to sell 24’s which the LCBO’s  present agreement with the The Beer Store does not allow them to do.

Unlike the LCBO, The Beer Store is a privately owned monopoly – controlled by giant foreign-owned brewers. Forty-nine percent of the company is owned by the Labatt arm of Anheuser-Busch InBev of Belgium; forty-nine percent is owned by Molson Coors Brewing Company which has headquarters in both the United States and Canada, and the remaining two percent is owned by Sleeman Breweries, an arm of Sapporo of Japan.

You can rest assured that unions such as OPSEU (LCBO) and the UFCW (The Beer Store) are keeping a close eye on Clark’s deliberations.

As is Ontario NDP leader Andrea Horwath who has launched a campaign against the sale of the big provincial Crown Corporations.

Stay tuned to News For Ontario’s 99% for the inside story on the Clark task force and other breaking provincial stories.

5 thoughts on “LCBO, Beer Store, OPG, Hydro One All In Play As T.D. CEO Ed Clark Readies Privatization Report for Premier Wynne.

  1. Bob Post author

    It strikes me that privatization of important public assets like OPG and Hydro One is not the way to go. Sounds a lot like Mike Harris’s strategy to me and we know where that ended up!

  2. Ryan

    as predicted, the liberals will increase spending, then sell a huge $4.5 billion/year profit machine (lcbo) off to pay for it all, after our tax dollars paid to have it built up. Sounds a lot like the 407 deal all over again.

  3. Steve

    After the 407 debacle, I seriously wonder if the government is competent enough to sell anything at all, so by getting a third party involved may not be a bad thing. As for the LCBO, I don’t believe in legislated monopolies because without competition, there is little incentive for motivation. My point is that in all likelihood, the LCBO could be making a lot more in revenue if it was efficient. Perhaps they could follow the Alberta model where the distribution is government owned but the retailers can market; seems to work for them. Whatever they do, please put some thought into it this time. I shudder every time I think about the 407, which is the worst deal in history!

  4. Cathy Bowslaugh

    I’m guessing the LCBO could be made alot more efficient, I’ve heard what some of the employees make!


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