Toronto Hydro and the power of secrecy

A Star request for information about Toronto Hydro's use of privatization consultants has turned into a 14-month battle. Part of a Star Campaign for Transparency.

Thestar.com
March 25, 2017
By David Rider

Toronto Hydro Corp. is spending public money on consultants, including Bay Street lawyers, to help it keep a secret - how much public money it has spent on consultants. David Rider, the Star’s city hall bureau chief has been trying to find out. It’s a battle that has now been fought for more than a year - and there is no end in sight.

January 2016: Using anonymous sources, I revealed behind-the-scenes work to set the stage for a partial privatization of the century-old power distributor of which the City of Toronto is sole shareholder.

Jan. 8, 2016: My story “Toronto Hydro privatization plan in the works” is published.

Jan. 22, 2016: I then submitted two applications to hydro under Ontario’s freedom of information legislation. I asked for copies of internal hydro communications mentioning any possible privatization, and for the estimated cost of all work done by consultants, including lawyers and pollsters, related to a possible sale.

To me it seemed basic information, albeit potentially controversial for an arm’s length agency that had no mandate from city council to explore a possible sale. I expected a fight, fueled by institutional aversion to lifting the hood on internal machinations, and maybe the grudging release of some pages mostly or fully blanked out.

That would force me to appeal to Ontario’s Information and Privacy Commissioner (IPC) in hopes hydro would be ordered to fully live up to its responsibilities under the Municipal Freedom of Information and Protection of Privacy Act.

Feb. 25, 2016: I was wrong and, after decades of trying to pry information out of government, hopelessly naïve. Hydro has refused to even process my request.

Fourteen months later, awaiting a final ruling by IPC, I have received nothing from hydro except, via lawyers the utility is paying to fight me, dozens of pages of arguments about why the utility cannot, and will not, acknowledge that such records do or do not exist. Forget actually looking for them and handing them to a reporter.

April 29, 2016: The lawyers from Norton Rose Fulbright Canada - hired to work on privatization and now to fight my requests - argue that, based on an argument invoking Ontario securities law, buttressed by an affidavit from a hired U of T law professor, the IPC should “reject my appeal at the intake stage” - kill it before it can take a breath.

Hydro is not publicly traded. Information about consultants could not give me or anyone else inside information that would impact the stock market. Still, IPC says the utility, which issues bonds that can be resold privately, has raised complex questions over its potentially conflicting duties to the Securities Act and the FOI law.

June 11, 2016: The Star argues that IPC should reject hydro’s argument that “selective disclosure” of information is tantamount to insider trading, and find that Securities Act concerns do not erase a public institution's FOI obligations.

Even if IPC sides with me, hydro could keep the fight alive by going to provincial court seeking judicial review. That could be a very expensive battle for both sides.

Amid many exchanges for which I had to get my own legal advice, the privatization push died and with it, presumably, the work of consultants whom, as I reported last October, included two key members of Mayor John Tory’s 2014 election team. Yet hydro is fighting me as hard as ever.

Sept. 2, 2016: IPC announces appeal is in inquiry stage, invites submissions from both sides.

Oct. 17, 2016: Bay Street lawyers for hydro submit 31-page argument to hydro including affidavit from a U of T professor who is expert on securities.

Nov. 17, 2016: I make my submission, that the information is in the public interest, that Securities Law doesn't trump hydro's responsibility under MFIPPA, and that IPC should ignore the professor's submission.

Nov. 24, 2016: Mayor John Tory publicly takes hydro privatization off the table.

Dec. 7, 2016: IPC invites final rebuttals to each other's submissions

I’m not the only one puzzled. Paul Ainslie, a city councillor, sits on Toronto Hydro’s board of directors.

“There’s a city hall culture I'm used to, more open, and then there’s private business,” and that’s the way the hydro chief executive and his senior team see the highly regulated utility, Ainslie says.

“With a freedom of information act request, I think there’s a mindset there that more often than not they see themselves as a business ... My perspective is Toronto Hydro is a very well run organization and I understand that there’s confidential material that you have to keep private to run a business, but in terms of information like this I don’t know why they’re going to such an extent to try to hide it.”

Ainslie was surprised to learn hydro, which has its own legal department, is using Norton Rose Fulbright Canada to fight an FOI request.

“I know Norton Rose was hired as an outside legal consultant when we were looking at some type of IPO or business model that would see the sale of up to 49 per cent of Toronto Hydro, and my understanding is that is the only reason we hired them, so I’m a little surprised that they’re fighting freedom of information requests put forward by a journalist,” he says.

The two other councillors on hydro’s 13-member board, Stephen Holyday and Deputy Mayor Denzil Minnan-Wong, declined to comment on the utility’s responsibility to respond to FOI requests.

Councillor Gord Perks, a city councillor not on the hydro board, who successfully argued against the merits of privatization, says: “There is no excuse to hide from the public how public money is being spent. Mr. (Anthony) Haines needs to come to the understanding that he works for the people of Toronto and he needs to be accountable to them.”

The Star asked to speak to Haines for this story. Hydro spokesman Brian Buchan replied on his behalf: “As you are aware, it is Toronto Hydro’s policy to not respond to market speculation or rumour.

“As you indicate, you have multiple access to information requests that are either in process, or in respect of which appeals are currently pending before the Information and Privacy Commissioner ... We are fulfilling our obligations in respect of your requests and fully participating in the IPC process. As this matter is still before the IPC, we have no further comment.”

Recently I made a new FOI request to hydro. I want to know how much public money the utility has spent on contractors to fight my request for information about how much public money it has spent on contractors.

Jan. 13, 2017: I submit my two new FOIs.

Feb. 14, 2017: Hydro denies my request.

March 8, 2017: I appeal that denial to the IPC.

Hydro says it cannot confirm or deny the existence of such records and dismissed my request as “frivolous and/or vexatious.” While refusing my request, hydro executive vice-president Amanda Klein references my request for comment.

“Your express indications to us that you intend to attempt to build a story in the media around your existing appeals lead us to believe that this request amounts to an abuse of the right of access, is made in bad faith and/or is made for a purpose other than to obtain access,” she wrote.

“You may appeal to the Information and Privacy Commissioner ... ”