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.