Hydro One sell-off on track to finish before next Ontario election in 2018

theglobeandmail.com
April 5, 2016
By Adrian Morrow

The privatization of Hydro One will most likely be completed before Premier Kathleen Wynne’s Liberals face re-election in 2018, the man in charge of the sell-off says.

The government on Wednesday will unload a second 15-per-cent tranche of the massive electricity utility, bringing to 30 per cent the share of the company that has been sold in less than six months. Ms. Wynne ultimately plans to sell 60 per cent.

Given the pace of the sell-off, Ed Clark, the retired banker now serving as a business and assets adviser to Ms. Wynne, said the 60-per-cent privatization mark will probably be reached before the election.

“Yeah, I think if that’s what [government] wants to do it’ll be able to do it,” he said in an interview. “Yeah, I don’t think there is any doubt. This is a validation that this actually will work ... we’re unlocking a very valuable company.”

The privatization has proved highly controversial, and having it completed before the province goes to the polls could help defuse it to some extent as a ballot issue - alleviating a major political headache for the governing Liberals.

Polls repeatedly show more than two-thirds of Ontarians are against the sell-off. Both opposition parties are against it, as are several unions. And sources say many Liberals are also cool to the plan and jittery about its political ramifications.

But Ms. Wynne has insisted it is necessary to raise money to pay for public transit expansion. The goal is to ultimately pull in $9-billion: $5-billion to pay down debt and $4-billion to put into the Trillium Trust to build new transit lines and other infrastructure.

Mr. Clark, who first recommended the privatization to Ms. Wynne and is now overseeing its implementation, said the province is “deadly on target” to reach $9-billion.

The current share sale is expected to rake in up to $2-billion, minus a $29-million fee for the syndicate of banks - led by Bank of Nova Scotia and RBC - running the sale. The share price is up 15 per cent from the initial public offering - $23.65 now compared with $20.50 in November.

Asked whether he believed the public will ultimately come around to support the privatization, Mr. Clark demurred.

“I don’t know what the answer to that is. I have always been impressed in my life that the average person is smarter than the average member of the elite,” he said. “So they will figure it out and either they’ll believe this money was well spent or they won’t.”