As first shares hit the market, union says province must halt plans to privatize majority of utility
TORONTO—Shares of Hydro One Ltd. are trading on the open market—much to the chagrin of a legion of municipalities, business groups, unions and individual Ontarians. The utility made its public debut amid significant ire and heavy trading Nov. 6.
Among a large number of issues, detractors say the privatization will cause electricity rates to “skyrocket” and give the private sector control over a historically public piece of the province’s infrastructure.
“We made hydro public more than 100 years ago because it was the right thing to do. Public hydro was created so we’d have reliable, affordable electricity to fuel our economy and improve our lives,” Fred Hahn, president of the Canadian Union of Public Employees Ontario, said. “Today, the Liberal government has betrayed that history. It’s a mistake, and the Liberals must not go any further with their disastrous privatization plans.”
The government’s initial offering of 81.1 million shares is planned to lead to the eventual sale of 60 per cent of the company. Though opponents have been highly-critical of the move, proponents note the Ontario Energy Board sets hydro rates in the province, which will protect consumers, while the sale’s proceeds will provide Ontario with much-needed cash.
Ontario’s Finance Minister, Charles Sousa, said he was pleased to see the offering of Hydro One shares was being “well-received” on the markets.
“Every uptick on the market is an indication the future offerings will net even greater proceeds benefiting all Ontarians,” Sousa said.
“It will mean billions of dollars being reinvested into our economy, into building new assets, into producing greater revenues,” he added.
Ontario forged ahead with the IPO despite calls from numerous stakeholders and a sceptical report from budget watchdog, Stephen LeClair, Ontario’s Financial Accountability Officer, which was released late last week.
Though stopping the initial sale is now out of reach, CUPE Ontario, among many others, continues to oppose the utility’s further privatization and is calling on the Liberal government to halt any future share offering.
“We’re losing huge long-term revenue, and the reality is this really isn’t about infrastructure spending. In fact, over the long-term it means Ontario will have less money for programs and infrastructure,” Hahn said.
“The Liberals must stop before their mistake becomes the economic tragedy of a generation.”