September 3, 2014

A little advice

Premier Kathleen Wynne has asked TD Bank President Ed Clark how the province can “optimize” assets like the LCBO and Ontario Power Generation (OPG) in order to help slay the province’s deficit.

We don’t know a whole lot about selling beer and wine (although we are familiar with the purchasing side), but when it comes to OPG, we had a few words of advice for Mr. Clark: Stop this underperforming crown corporation from wasting more money on bloated nuclear projects.

In our submission to Mr. Clark, we pointed out that all the dividends and income taxes paid by OPG and Hydro One over the last 15 years have gone to paying down the debt left by Ontario Hydro’s nuclear cost debacles instead of paying for transit, school repairs or better health care.

This $20 billion debt has also sucked up every cent in provincial income tax payments from more than 70 local electric utilities and, of course, has left every electricity ratepayer paying a debt retirement charge on hydro bills. If Ontario wants to cut its debt and deficit, the last thing it should be doing is allowing OPG to carry on with another high-risk, low-return nuclear project.

As numerous commentators, including former bank economist Jeff Rubin, have pointed out recently, we’d all be better off if Ontario dropped its fixation with uneconomic nuclear projects and builds a partnership with Quebec to trade affordable renewable power instead.

The Premier of Quebec, who is hard at work trying to slay his own deficit, gets it. He says a deal is doable and that “the price will be right.” After all, his province has power to spare and needs to build new export markets.

If Premier Wynne really wants to boost OPG’s returns, she should order the utility to focus on the 54 low-cost water power generating stations it inherited from Ontario Hydro instead of sinking us back into debt with another uneconomic nuclear project.

Read our submission: Maximizing the Value of OPG.

– Angela Bischoff