Canadian Manufacturing

Ontario’s legislative officers blast Hydro One sale

The province's Auditor General, Ombudsman and others warn that selling the utility will shield the company from public scrutiny

TORONTO—Ontario’s independent legislative officers have banded together in a rare move to condemn the Liberal government’s plan to sell a majority of Hydro One, warning it will shield the company from public scrutiny.

The eight officers, including the auditor general and the ombudsman, call on the government to reverse its plan.

“The officers report to the assembly, not to the government of the day, and provide independent, expert reports and analysis of government operations and service delivery,” they write in a joint letter.

“The officers believe that the government’s proposals…will reduce the scope of the reviews that can be conducted on behalf of the people of the province.”

The Liberals announced last month they intended to sell 60 per cent of Hydro One to generate money for public transit projects, but the initial public offering will only be 15 per cent.

The legislative officers will lose their oversight powers because the utility will become a publicly traded company, though it ends even before the majority stake is sold.

“The officers are concerned that while the government intends to eventually hold 40 per cent of Hydro One over the long term, their ability to assess its value and quality of service, among other matters, would be eliminated, either upon the budget measures receiving royal assent or within six months of that date.”

The officers say the sale of Hydro One will mean:

  • The auditor general won’t be able to conduct performance audits
  • The ombudsman won’t be able to investigate public complaints
  • Freedom-of-information records oversight won’t apply
  • The financial accountability officer won’t be able to examine planned Hydro One operations
  • Lobbyists won’t have to report whether they are lobbying Hydro One
  • The integrity commissioner won’t be able to review expense claims
  • Hydro One won’t be subject to the French Language Services Act

Publicly traded companies come with a different set of oversights, such as through the Ontario Securities Commission, and there will be a Hydro One ombudsman, said Deputy Premier Deb Matthews.

“It needs to become that independent, publicly traded company,” she said. “We’re making that transition, but selling our shares in a measured and slow way.”

The legislative officers will be able to complete any ongoing Hydro One reports, but won’t be able to start any new investigations, she said.

The New Democrats are strongly against the sale and have called for more debate and hearings on the budget bill, which makes provisions for the sale.

“This legislation needs scrutiny,” NDP Leader Andrea Horwath said. “It needs public input. It needs public hearings and the government’s ramming it through in (Prime Minister) Stephen Harper-style and we are all going to have to pay the price.”

Progressive Conservative Leader Patrick Brown called it “historic” that eight independent officers are expressing the same concerns.

The government notes it will control 40 per cent of the board and a two thirds vote would be required for major changes.

The government would be able to dismiss the entire board if need be and the Ontario Energy Board will still approve rates, Energy Minister Bob Chiarelli said in a statement.

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