Categorized | Canadian Politics

Province bearing heavy cost of Hydro One sale

Posted on 14 February 2018 by admin

It would have been cheaper to borrow money for transit projects than to sell shares in Hydro One, watchdog says.

The Liberal government’s controversial sale of 53 per cent of Hydro One will cost about $1.1 billion in annual revenues from lost dividends this year, the independent Financial Accountability Office said Monday.

In the long run, selling the shares will cost taxpayers about $1.8 billion more than if the province had borrowed the $9.2 billion raised by the partial privatization, according to a 40-page reportby the watchdog.

The sale to private investors, with proceeds going to pay down hydro system debt and finance public transit improvements has the effect of boosting the province’s books $3.8 billion in the fiscal years from 2015 to 2018 — which opposition parties noted is a crucial period before this spring’s election as the Liberals scrambled to keep their balanced budget promise.

Progressive Conservative MPP Lisa MacLeod said the findings in the report are damning given public concerns about selling a valuable provincial asset.

“We warned the Liberals it was a dumb move and now the Financial Accountability Office has proven it is,” she told the Star.

“It would have been cheaper just to flat out borrow the money than it was to sell the shares.”

Premier Kathleen Wynne has maintained the sale was necessary to raise money for infrastructure improvements and that bringing more private-sector discipline to Hydro One would make it more profitable.

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