Hydro thorn Energy Probe rooted on the right

Thomas Walkon
Toronto Star
August 23, 1997

When Ontario Hydro’s reactor woes made headlines last week, no one was in more demand than a small Toronto anti-nuclear group called Energy Probe.

In the Star, Energy Probe’s nuclear research director, Norm Rubin, slammed federal regulators. In the Globe and Mail, Energy Probe Foundation’s research co-ordinator, Larry Solomon, penned a piece calling for Hydro to be dismantled.

Throughout the media, Energy Probe’s executive director, Tom Adams, was quoted at length describing Hydro’s problems.

To many readers – and reporters – Energy Probe might have seemed just another environmental organization, a vaguely leftish group committed to bicycles, whole grains and wind power.

In fact, it’s not that at all. Where most Canadian public-interest groups support a greater role for government in solving environmental problems, Energy Probe calls for less.

Its solution to the problems of the environment – indeed, of most social problems – focuses on free markets, privatization, selective deregulation and other policies usually described as right wing.

It holds up former British prime minister Margaret Thatcher as the world’s model environmentalist.

With revenues of $2 million a year, it’s also relatively well-heeled.

Indeed, Energy Probe deals with far more than energy. From its small house on Brunswick Ave. in downtown Toronto, the three men and three women who run the Energy Probe Research Foundation control a small but increasingly influential network of advocacy organizations.

Energy Probe itself has long been in the forefront of calling for the break-up and privatization of Ontario Hydro. Dominated by Rubin, Solomon and Adams, it did so long before Mike Harris became Premier and appointed his pro-privatization friend and bagman, Bill Farlinger, to head the utility.

The Consumer Policy Institute, headed by Solomon, wants to replace public medicare with a system of individual medical savings accounts and private insurance – a scheme similar to that floated by the Fraser Institute, an avowedly conservative think tank. It would also privatize public transit.

Earlier this year, the institute’s call for deregulation of the taxi industry was reported without comment on the front page of the Star.

Probe International, run by Pat Adams (Solomon’s wife, but no relation to Tom Adams), wants to end government-to-government foreign aid.

Environment Probe, started by Solomon and now headed by Elizabeth Brubaker, advocates the privatization of forests, mineral resources and sewage and water plants. While acknowledging that Britain’s privatization of water and sewage plants has led to higher prices and hardship for the poor, Brubaker wrote recently, it did improve the country’s beaches.

The Next City magazine, published and edited by Solomon, was started in 1995 with a $1.4 million grant from the right-wing Donner Canadian Foundation, a wealthy private charity. The magazine’s published aim is to “celebrate the small-is-beautiful devolution of regional and national governments.”

Featuring articles by Solomon, Brubaker and Pat Adams, as well as Southam News columnist Andrew Coyne and cultural icon Robert Fulford, the Next City has, among other things, called for parent-run charter schools, the privatization of medicare and an end to government subsidies in the arts.

Other environmentalists often regard the Energy Probe empire with dismay and suspicion.

“They so often operate in counterpoint to efforts of other environmentalists that the effect is to undermine other organizations,” says Steven Schrybman, formerly a Toronto activist who now heads Vancouver’s West Coast Environmental Law Association.

Pointing to Energy Probe’s controversial decision to support the 1989 Canada-U.S. free trade agreement, he says: “The positions they take are very much at odds with the values of other environmental organizations.”

Dave Martin of Durham Nuclear Awareness, which like Energy Probe is a fierce critic of Ontario Hydro, chooses his words carefully.

“There’s no question Energy Probe has a rather extreme commitment to market solutions,” he says. “This makes them rather unique in the environmental community.

“They have a right-wing, free-market view of environmental issues. In fact, they offer free-market solutions to any problem you could name.”

Michelle Swenarchuk, head of the Canadian Environmental Law Association, says that in matters of resource policy, Environment Probe’s views are “so driven by ideology that . . . in our view, they are completely off track.”

But over coffee in a Bloor St. eatery, Energy Probe’s Norm Rubin pooh-poohs those who would use what he calls outdated labels such as left and right to categorize his organization.

“We confuse people who would divide along left-right lines,” he says. “Sure, we think private ownership and accountability make sense. But we also call for more government regulation in some areas.”

Indeed, Energy Probe does advocate, in the short run, stricter oversight of the nuclear industry, which it long has argued should be shut down as both uneconomic and dangerous.

And it says, with considerable justice, that governments are routinely lax in regulating the operations they run.

Still, Energy Probe’s notion of effective government regulation may not jibe with that of most people. In a Next City editorial (which, Rubin says enthusiastically, encapsulates the Energy Probe view of the world), Solomon explains that his model of the ultimate regulator is Thatcher.

“No one in the history of the universe has better separated government and industry and so allowed for honest regulation than Margaret Thatcher,” he writes. “She will . . . go down in history as the regulation prime minister.”

Energy Probe’s beginnings gave little hint of what it would become. It started as a project of Pollution Probe, one of the first public interest groups in Canada, an early critic of government inaction and corporate malfeasance.

Solomon, a freelance writer originally from Romania, and the U.S.-born Rubin, a whip-smart music historian teaching at the University of Toronto, gravitated to Pollution Probe in the late 1970s. Both had an interest in and mistrust of nuclear energy. By 1980, they were well-known in environmental circles as uncompromising critics of Hydro.

At a time when no one in business or government was calling for the break-up of the utility, Solomon was zeroing in on two fundamental questions underlying its very existence: Do the economics of electric generation require a monopoly owner? If not, why should the public own Hydro?

In 1980, the two Probes split – ostensibly over whether to move into new federally funded headquarters.

Rubin says Energy Probe was reluctant to move into a government-subsidized building, lest it compromise the group’s independence. But there were also personality clashes, disputes over fundraising and, Rubin acknowledges, questions of money.

“Any money that was left over was divided among the staff equally. It was supposed to be $9,000 a year. It was never over $6,000. You couldn’t live on that.”

Solomon, Rubin and the newly hired Pat Adams started up the Energy Probe Research Foundation, a charitable organization, to solicit tax-deductible donations.

A blue-ribbon board of directors was chosen, one that now includes prominent educator and former New Democrat MPP Walter Pitman, Cara Foods president Gail Regan and native leader Georges Erasmus.

But control of the organization was always closely held by the founders. The foundation’s directors, Rubin says, are chosen by the six senior staff of the various Energy Probe groups, former senior staff, the current directors and former directors.

Even then, the directors do not dictate what the various arms of the organization do; they merely channel publicly subsidized money to them. Decisions on who runs the various Probes and what they do are made by the six senior staff.

In practice, that has led to a self-perpetuating group. Initially, both the foundation and Energy Probe were dominated by Solomon, Rubin and Pat Adams. As Energy Probe spun off new ventures, the core group expanded to include Brubaker, Tom Adams and fundraiser Annetta Turner.

There was also an ill-starred effort in the late ’80s to establish environmentally sensitive mutual funds.

“Larry (Solomon) was already investing money for some of us,” says Rubin. “He took a course to become a certified mutual fund dealer and we set up the EIFs (environmental investment funds).”

The idea, Rubin says, was to raise money by having the funds (operated by EIF Fund Management Ltd., a separate company run by Solomon) buy “investment advice” from the Energy Probe Research Foundation.

Not enough money was attracted, however, and this business was eventually sold to Investors Group Inc., a major mutual fund with its own so-called ethical portfolio.

In 1991, Energy Probe’s formidable direct-mail campaign was put in the hands of something called Preserve the Environment Matters Association, or PEMA, a non-share, non-profit firm controlled by Solomon, Turner and Rubin.

Throughout, while Energy Probe would boast that almost none of its donations came from government, it continued to receive substantial sums of public money – primarily so-called intervener funding that permitted it to challenge Hydro before various boards and agencies.

In 1993, for instance, intervener funding brought $1.3 million to Energy Probe. Donations brought in $514,000.

However, with governments cutting back and hearings becoming less frequent, public money began to dry up. Last year, Energy Probe received only $146,000 in intervener funds.

Fortunately for the organization, the private sector came to the rescue.

By 1994, the Donner Canadian Foundation was looking for new, robust, pro-market organizations to fund. Based on the legacy of a wealthy U.S. steel magnate and controlled by his decidedly right-of-centre American heirs, the Donner Foundation had just made a decision to channel its charitable donations to what it saw as worthy conservative causes.

That year, Solomon persuaded the Donner Foundation to give Energy Probe $225,000 to set up the Consumer Policy Institute.

A year later, Solomon sold Donner on an even bigger project – a $1.4 million grant to set up the Next City.

If the world was unsure of what the organization stood for, it had no excuse once this magazine hit the stands.

Lauded by critics, including the Star‘s, the Next City was well-produced, glossy and often interesting – a magazine with a definite, anarcho-conservative point of view.

In the most recent issue, for example, the prolific Solomon gives his solution to the unemployment problem: cut taxes for the poor and eliminate the minimum wage. The cover story, by Brubaker, calls for privatization of water and sewage à la Margaret Thatcher, as well as a new environmental regulatory regime that is “arm’s length” from government.

While not every article in the Next City can be classified as conservative, the magazine has rankled some – including, Rubin says, members of the Energy Probe Research Foundation’s usually quiescent board of directors.

In particular, he says, an Andrew Coyne piece calling for an end to government subsidization of culture enraged foundation chair Pitman.

The result was that Energy Probe Research Foundation is no longer listed as co-publisher of the Next City. Instead, the magazine’s owner of record is given as PEMA, Energy Probe’s direct-mail arm.

In practical terms, this makes no difference. The money to publish still comes from the Donner Foundation and is still channelled through the Energy Probe Research Foundation. And the magazine is still run by the same six who control all other Energy Probe operations.

But the change on the magazine’s masthead may satisfy the bruised feelings of foundation directors who, Rubin acknowledges, tend to be “as I used to be, more socialist-centralist.”

While critics may look askance at the directions the Energy Probe empire is taking, Rubin and the others are sanguine.

And why not? When, in the early ’80s, Energy Probe called for the break-up of Ontario Hydro, it was a lonely voice. Now, with even the chair of Hydro advocating privatization, it is mainstream.

Even Energy Probe’s fiercest critics in the environmental movement agree that the Hydro monopoly no longer works.

To Rubin, the Probe empire is simply moving ahead logically; its attack on the public Hydro monopoly prefigures Solomon’s critique of the public transit monopoly, the public water monopoly, the public medicare monopoly.

Its long fight against the government regulators who were supposed to rein in Hydro’s nuclear operations but, instead, covered for them, led the organization inexorably to opt for private ownership of almost everything that is now in the public domain.

“We’ve long supported consumers having the right to see the full costs and make choices,” says Rubin.

 

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