Selling off Hydro One is Wynne’s biggest blunder as premier
Liberals sold off Hydro One despite lack of public support, wrongly counting on the inattention of the last election.

thestar.com
By MARTIN REGG COHN
June 28, 2017

Privatizing Hydro One ranks as the biggest miscalculation of Kathleen Wynne’s time as premier.

It violated fundamental axioms of politics - notably the perils of public opposition and public confusion.

But - and this is important - it didn’t break the basic laws of the land.

An ongoing court challenge, bankrolled by one of Ontario’s biggest unions, seeks to declare the privatization of Hydro One an act of misfeasance. CUPE argues the partial sale was wrongful, illegal conduct by an elected government favouring its financial friends.

On its face, the court case seems doomed to fail, equal parts frivolous and foolish. It makes little sense legally, factually, politically, fiscally.

CUPE’s underlying goal is not so much a courtroom triumph as a victory in the court of public opinion. In reality, publicity stunts make for good politics but bad law.

After a few legal skirmishes this month, Justice P.J. Cavanagh will rule soon whether the case should proceed. It shouldn’t, because the real judgment belongs to voters in next summer’s Ontario election.

As it did in the election of 2014.

Oddly, the core of CUPE’s claim against the Liberal government is that Wynne lacked an electoral mandate to sell off part of Hydro One, and that it secretly lined the pockets of bankers along the way. It’s an argument that appeals to the dark suspicions people harbour about politicians today, but it is pure revisionist history.

Voters must distinguish between paranoia and paying attention. The idea that Wynne’s Liberals never hinted at privatization is a provable fiction invented by the most vocal opponents of the plan - who inexplicably lost their tongue in the campaign of 2014.

Three weeks before her Liberal minority government was defeated by the NDP that year, Wynne announced an outside panel of experts headed by then-TD Bank CEO Ed Clark to examine the ownership of government assets, notably Hydro One.

“We own these assets, the people of Ontario. Selling them off . . . is bad news,” warned NDP energy critic Peter Tabuns at the time. “We aren’t supporting privatization.”

But New Democrats concluded that there were more votes to be snatched from the Liberals by focusing on gas plant criminalization than hydro privatization. They miscalculated.

Wynne won the election, but fell into the trap of brand confusion. Many voters felt betrayed by a politician whom they assumed was more or less of the left, but left them behind at the altar of privatization.

Beyond the damage to her personal reputation, what really hurt Wynne was widespread confusion over Hydro One’s corporate brand: Most Ontarians conflate it with the old Ontario Hydro, which has a long and legendary history in the province as the face of publicly owned power. But that legacy Crown corporation was long ago carved up by the Tories as a precursor to privatization - split into Ontario Power Generation (OPG), which generates nuclear and hydro electricity; and Hydro One, essentially a transmission company that owns the wires, poles, and some local distribution companies.

The biggest contradiction in this tangled tale of transmission wires is the opposition’s claim that privatization will raise prices. That’s like arguing that natural gas prices can be held hostage by privately owned Enbridge. Energy utilities are regulated by the Ontario Energy Board, which has the last word on prices.

The Liberals sold off Hydro One despite internal polling showing a lack of public support, wrongly calculating that it would generate only passing opposition after the inattention of the last election. They were banking on the sale proceeds to meet a 2014 election promise to balance the budget by 2017 - which they did, but at great political cost.

The NDP’s Andrea Horwath has made the most of the sale - reviving her own flagging leadership after the last election. Luckily for her, the party’s implausible promise to buy back all of Hydro One - paying far more for the shares than the province earned for them - has escaped attention until now, though she will surely be called to account for it on the campaign trail.

Even the Progressive Conservatives, who first conjured up privatization of the venerable Ontario Hydro two decades ago, now earnestly claim to oppose the partial sale of Hydro One. It is a breathtaking about-face, considering that they wanted to unload hydro assets as recently as the 2011 election campaign.

I’ve always argued against the privatization of Hydro One - but on public policy, not political grounds. Politics, however, has its own rhythm and rationale.

Politicians take positions, make calculations, win elections, lose campaigns. Selling off Hydro One was wrong-headed but the truth is that Wynne won the last election after telling people she might do it. And as we are reminded after every election, voters, too, have the right to change their minds.

That’s politics, for better or for worse. Best that lawyers and judges keep their distance.