Hydro One sell-off will cost Ontario big time: Opposition

A critical report Thursday from the Financial Accountability Office of Ontario on plans to sell 60 per cent of Hydro One has the Opposition calling for the government to change course.

NDP Leader Andrea Horwath said Thursday the fact the province's own watchdog is raising red flags should be enough for Premier Kathleen Wynne to change course.

"What the financial accountability officer said, quite clearly, that this is not the right way to raise the money – plain and simple," Horwath said. "It's going to be another Liberal financial boondoggle. It's up to the premier now, to do the right thing."

Wynne has said revenue from the Hydro One selloff will be used to pay down the utility's debt and to help fund the infrastructure spending she promised in the June 2014 election. Finance Minister Charles Sousa has said the sale would raise about $9 billion, of which $5 billion will be used to pay off debt, and $4 billion for infrastructure spending.

But Stephen LeClair, Ontario’s first Financial Accountability Officer, wrote in his report the sale could net as little as $6.8 billion, leaving a far smaller amount remaining for infrastructure. And once complete, the sale will lead in a drop of revenue of about $500 million a year.

Horwath said faced with those numbers, any rational government would change course – particularly with the new federal government led by Liberal Justin Trudeau promising massive infrastructure investments in his first few years in power.

"That's one solution that's right in front of Kathleen Wynne's face,” Horwath said. “In fact, she worked really hard to get that prime minister elected. So now, she should be doing exactly what she said she's was going to do, and partner with the federal government to bring that money forward.

"This premier is absolutely selling the government short, and selling Ontarians out if she goes forward with this."

In a release, PC Leader Patrick Brown said Thursday's report also concluded that rates will likely increase as a result of the sale.

“Coupled with the (Ontario Energy Board’s) recent announcement that hydro rates will increase on Nov. 1, average Ontario families will continue to struggle to pay their hydro bills,” Brown said in the release.

“The public does not support this fire sale. Ontario’s financial watchdog says the sale will deteriorate the province’s budget balance. The Wynne Liberals should do the right thing, and put an immediate stop to the sale of Hydro One.”

PC Finance Critic Vic Fedeli said the sale could cost the province approximately $700 million in revenue every year, and the net profit could be as low as $1.4 billion.

“The actual proceeds from this Hydro One fire sale are very little,” Fedeli said. “But it’s just enough to make your books look good for a couple years, bringing us to the next election. Then it all goes downhill for Ontario from there.”

The Toronto Star reported Thursday that Wynne will proceed with the sale, despite the report.

“It's going,” The Star reported Wynne as saying. “In terms of the long-term, we thought this was the right way to go.”

Horwath said if Wynne sticks to the plan, soaring hydro rates will only go higher.

"Every other jurisdiction where there has been a selloff of hydro, it has (led) to a rise in rates," she said. "People can't pay their bills now. We cannot afford higher electricity bills in the Province of Ontario. When New Democrats started criticizing ... the selloff of Hydro One, that was one of our biggest concerns."

That's bad news for consumers, as well as businesses who can't compete with other provinces because of electricity costs, she said. The fact that 185 municipalities have already passed motions calling for the government to change course shows the premier isn't listening to Ontarians, Horwath said.

"Kathleen Wynne is showing the utmost arrogance by ignoring all these voices," she said. "The report should be enough to tell the government to back off."