I am Judy Darcy, National President of CUPE, with me is Sid Ryan, President of CUPE Ontario. We are here today speaking on behalf of over 200,000 CUPE members in Ontario and 500,000 CUPE members across the countrythats one in sixty Canadians.
When our union and the CEP took your government to court over the privatization of Hydro One, we did it because we knew it was both unlawful and wrong. And we took court action because we knew that the vast majority of Ontario people wanted the privatization to be stopped.
The people of Ontario, through their municipal governments in town hall meetings, and in public opinion polls, have spoken. They are overwhelmingly opposed to the privatization of Ontario Hydro.
They are even more opposed to the way your government is running rough shod over the legislative and democratic process.
The people of Ontario want to be heard on what may well be the most important public policy decision this government will make. They have not been allowed to have a say, and your government seems determined not to give them a real say.
Mr. Harris made the announcement that Hydro One would be sold on his last day in the legislature. There was no opportunity for elected representatives to debate the issue. Its clear he wanted to complete the sale before the legislature ever reconvened.
His actions show utter contempt for the democratic process. And we are angry that Mr. Eves seems intent on following the same approach.
Haste, greed and ideology have led this government into this mess, and the political theatre that youve engaged in last week through your so-called public consultations is taking the situation from bad to worse.
Quite frankly, Mr. Minister, your governments actions are an outrage.
You could have used Mr. Justice Gans decision as an opportunity to abandon privatization of Hydro One. Instead youve instructed your lawyers to appeal.
You could have said: ok, we dont have a legal mandate or a political mandate. Instead, you said youll bring in a new law.
You could have used it as an opportunity to re-think the opening of the electricity market on May 1stespecially given the gross misconduct of the private retailers in the period leading up to market-opening.
Instead, you and Premier Eves are engaging in a campaign of public propaganda and public confusion. On the one hand, youre pretending to step back and listen to what the people have to say about privatization through a carefully orchestrated and very selective tour of the province. On the other hand, as you made clear when you called my office ten days ago, and asked us to appear, youre bound and determined to go ahead with the privatizationand the only question up for debate iswhat form the privatization will take.
In fact, as your meetings last week revealed, you are so keen to privatize Hydro One that you are willing to consider any scheme, no matter how half-baked or ill-conceived.
But when it comes to maintaining public control of Hydro One,no matter how well documented or compelling the arguments are, nothing will discourage you from plowing ahead with some sortany sortof privatization for Hydro One.
You claim that the people of this province are confused, and that they are opposed to hydro privatization, because they just dont understand the benefits of privatization yet.
How arrogant and condescending!
You are intent on proceeding with the biggest privatization in Canadian history without producing one shred of evidence that privatization makes any sense whatsoever.
The people of Ontario are not confused or stupid, Mr. Minister. We know that there are no benefitsat least not for us. We know the only big beneficiaries of the privatization will be the financiers on Bay Street who stand to make millions off this deal.
We have scoured in vain the reports of the MacDonald Committee and the White Paper on Hydro Reform for any discussion of the possibility of privatizing Hydro One, let alone a justification for doing so. And we cant find any.
We defy you Minister to prove us wrong. Because not only wont you find any proposal to privatize Hydro One, you wont find any criticism of its performance either.
In fact there isnt one report, study, document or any other evidence to support your assertion that Hydro One must be privatized. In fact, all the evidence points against you. And while we know youre not really interested in hearing from the vast majority of Ontarians who oppose the sell-off, were going to take the time today to walk through your false claims and argue why Hydro One must remain publicly owned and controlled.
False claim No. 1, The Debt
You argue that the sale of Hydro One is necessary to pay down Ontario Hydros debt.
But as Mr. Justice Gans stated in his decision, there is no guarantee whatsoever that the proceeds of any sale will be used to pay down that debt. We suspect that a more likely scenario is that your government will sacrifice Hydro One to balance your budget this year to try and solve a political problem of your own making the fiscal fallout from ill-conceived and unsustainable tax cuts.
What public asset will you sell next year? A Hospital? Algonquin Park? TV Ontario?
You have an obligation, Minister, to tell the people of this province what will you do precisely with the money from this sale.
In fact paying down the stranded debt cant be your reason for selling Hydro One.
First the stranded debt really has nothing to do with Hydro One. Rather it arises from investment decisions of past Conservative governments in Ontario. Hydro One always has, and still continues to pay its own way.
Second, if the debt is your major concern, youre much better off keeping Hydro One as an asset which generates hundreds of millions of dollars in revenue each yearwhich can be used to pay for Ontario Hydros old debt or support health care or for any other public purpose.
In fact this was precisely how your predecessor said you would use the revenue generated by Hydro One. Here is what Mr. Wilson said when asked whether your government planned to privatize Ontario Hydro:
One of the reasons were not talking about privatization is my dream for Ontario Hydro that, once again, it will begin to return a healthy profit back to the shareholder - and the shareholder is the people of Ontario - that money in the future could be used to either lower electricity rates again or, once the debt is paid off, clearly thats money that could go into general revenues that can support health care and education and other priorities that the government of the day might have.
False claim No. 2, Capital Investment
Your second major argument for privatization of Hydro One is that the sale is necessary to raise capital for system maintenance and expansion.
To begin with, the people of Ontario have the right to know exactly what you are talking about. It would seem that the main reason capital investment is a big issue is that Hydro One has grandiose plans to aggressively expand Hydro Ones transmission system into US markets. No one has been able to explain how such an expansion helps meet the needs of people in Ontario. And it is highly doubtful that many Ontarians want to pay the price for this kind of expansion.
But in any event, raising capital cant really be your reason for privatizing Hydro One. Because Mr. Eves knows very welland any of his friends from Bay Street will confirmthat raising capital through public debt financing is much cheaper than going to equity marketsa lot cheaper.
As a public or Crown corporation, Hydro One would have absolutely no problem borrowing money to maintain its system or, even to expand it where it was in the public interest to do so.
Quite frankly, Mr. Minister, just the cost of hiring all those Bay Street middlemen should discourage youif nothing else does. We know the underwriters will make at least $113 millions and even more if the selling price is higher than the current estimate. And what about the millions more that are being paid out consulting, to lawyers, to advertisers and others involved in the sell-off?
Minister, are you prepared to disclose all the estimated transaction costs associated with this sale? The people of Ontario have a right to know.
And that brings us to your third main argument. Private is better. How many times have we heard that one?
But Minister where is the evidence?
Can you make a case that Enron is better? And what about Nortel, BCE Emergis or dozens of other corporations that have gone seriously off the rails? Private is better, more efficient, more profitable? Give us a break.
Maybe you just assume that because the top CEOs make obscene salaries that they must be doing a better job? Is it your theory that Hydro Ones CEO, Ms. Clitheroe, is a more effective and efficient manager now than she was when she was a deputy minister? After all shes now getting paid more than $2 million a year.
Where are your facts when you claim that Hydro One will be more efficient if it is privatized?
We know that the cost of borrowing is more expensive if Hydro One is privatized. That means more money for the same service not the other way around.
But that isnt the only problem with your claims that Hydro One will be more efficient in private and foreign control.
To begin with Hydro One is a natural monopolyit wont be subject to even the so-called discipline of a competitive market.
Second, there is simply very little scope for efficiency gains in transmission and distribution of electricity, even if it is in private hands. This is because transmission and distribution are very mature technologiesand there has been no essential difference in the efficiency of the technology from 50-60 years ago.
Third, there is ample evidence that private ownership does in fact result in higher cost of service. For example, in the US studies show distribution is overwhelmingly cheaper than private counterparts. In Ontario the old municipal electrical systems were in fact world leaders in terms of system performance.
And as far as performance goes, private has proved to be a disaster. New Zealand was the first OECD jurisdiction to embark on thoroughgoing restructuring (not UK) and in 1998 Auckland was without electric power for a month (caused by an undersea cable failure)no similar incident had ever occurred previously.
This brings me to the typical way in privatized corporations seek to generate better returns for their shareholdersas you and know Minister, that is by cutting staff and salaries. But this is a very dangerous game to play with a system that every person and every business in this province depends upon.
We all know, that the performance and reliability of Hydro One requires a highly trained, high-morale workforce and adequate capital spending on maintenance. These will be at much higher risk by private ownership in any form.
But I am not finished. Lets say that in some unforeseeable way Hydro Ones new owners find some way to reduce costs, not only to bring them in line with the utilities current performance but to even do one better.
What in the world makes you imagine that its private shareholders would pass these savings along to consumers instead of simply enriching themselves. And if OEB regulation compels them to do so, why would they even bother to seek out efficiency gains in the first place.
Ministerthe truth is that there is no more to this claim about efficiency than there is to any other you have made. In fact, privatization is more likely to reduce efficiency and reliability of service, and increase costs, if experience in other countries is any guide.
Remove the pretexts, and we left only with only one conclusionthat the interests of this Partys friends on Bay Street are so powerful that your government is willing to sacrifice Ontarios most important public asset just so they can make $100 million on so transaction fees.
When the news of Mr. Harris plans first broke in the National Postone of the Bay Street boys is quoted as saying we could barely keep from peeing in our pants. The greed factor driving this agenda is more than a little obscene.
Well, heres an idea. If this governments pals on Bay Street are so needy and if youre so desperate to help them out at the expense of the people of Ontario why dont you go to the top of one of the Bay Street buildings and drop $130 million in cash and let the brokers scramble for it. Your plan to privatize is so absurd that we would be better off keeping the asset and giving over cash to the brokers for no reason at all.
Well, we say you can do better. Keep Hydro One public. It belongs to the people of Ontario and we want to keep it that way.