Scarborough Coalition Launches Campaign Against Privatization of Hydro One
Rates went up and service went down when Nova Scotia privatized its electrical power utility
By Paul Bocking
A province-wide movement has begun organizing in Scarborough in an attempt to halt the planned privatization of Hydro One.
Last June, the Ontario Government passed legislation to sell off 60 per cent of Hydro One, the public utility responsible for electrical transmission lines across the province. An initial offering of 15 per cent was made in September. Premier Kathleen Wynne's Liberal government hopes to raise $9 billion from the sale, of which $5 billion would pay off debt and $4 billion would go towards infrastructure.
Hydro One currently contributes $740 million a year to the public treasury. This annual revenue would be reduced by an estimated $400 million if 60 per cent of all shares were sold. "It's a one-time deal. These profits would then go into the pockets of the rich," said Rosario Marchese, chair of the advisory board of the Citizens Coalition Against Privatization, at a press conference on September 16 at the Dorset Park Community Hub, announcing the formation of the Scarborough chapter. Afterwards, a diverse group of 60 residents organized into tables based on neighbourhoods and nationalities to strategize.
Marchese remarked, "Kathleen Wynne said before the election she wasn't going to sell Hydro One. After the election, she changed her mind. That's a problem. She has no mandate." He continued, "If you want to do something as big as this, you should have a referendum."
Polls indicate over 75 per cent of Ontarians oppose privatization, and many cite fears that hydro costs will rise even higher and faster once a profit motive is introduced. To date, over 165 municipalities have passed resolutions opposing the privatization of Hydro One—over one third of all communities in Ontario. The sell-off is opposed by both the New Democratic Party and the Progressive Conservatives, but their votes were defeated in the majority Liberal legislature.
"Many families in Scarborough already can't afford to pay their bills," said Scarborough organizer Neethan Shan, executive director of the Council of Agencies Serving South Asians. "Racialized and rural communities will be the most affected when the system is less accountable, if profit is the only motive."
Public control would be lost, says James Clancy, a director of the Public Services Foundation of Canada and president of the National Union of Public and General Employees (NUPGE). "Once privatized, oversight by the Ontario Ombudsman is gone. So is the right to Access to Information and Salary Disclosure requests." He pointed to Nova Scotia Power, Canada's only privatized provincial electricity utility, "Rates went up and service went down." Contending that when the primary interest is serving financier shareholders, the Nova Scotia Energy Board is powerless to prevent increases in rates. Hydro rates have also been increasing in Ontario, because our Energy Board determines rates by markets, rather than the public interest, since deregulation under former Conservative premier Mike Harris, Clancy said. Marchese warned of Ontario losing manufacturing because of even higher rates, "Business is worried, and they should be."
Hydro One would likely be highly lucrative for private investors. According to an initial prospectus released by the provincial government on September 17, shareholders would be guaranteed profits of seven to nine per cent on their investment. Energy rates paid by Ontario residents would be adjusted accordingly.
The proposed privatization has already created a windfall for at least one individual. Mayo Schmidt was hired for $4 million by the Ontario government to oversee the sale. His previous experience includes facilitating the privatization of the Saskatchewan Wheat Board.
Hydro One was originally formed from the break-up of Ontario Hydro in 1998, with Ontario Power Generation responsible for operating power plants. The Conservative government's intention was to prepare both units for privatization in 2002, but this was defeated by broad popular opposition and an imminent provincial election. Ontario Hydro was originally created as a public utility by Sir Adam Beck in 1906. The utility bought privately owned hydro electric dams and built additional capacity in order to spur the industrialization of Ontario and the electrification of rural regions through cheap electricity not beholden to for-profit interests.