Terence Corcoran
National Post
May 7, 2002

The new Ernie Eves government in Ontario appears to be scoring big with those deep-blue Tory backers from the hinterland, organized labour. On the day Mr. Eves won a by-election last week, the Ontario government ended an eight-week strike by 45,000 members of the Ontario Public Service Employees Union, mostly by giving into union demands and expanding the union’s influence over the province’s civil servants. The union got three-year wage increases between 9% and 14%, more sway over contract workers and control over a big wad of pension cash. On with the revolution!

The post-deal congratulatory love-in between Eves’ Cabinet ministers and the union’s leader, Leah Casselman, was a little hard for even the reddest Tory to swallow. No less gag-inducing was to watch the government allow another union group, Judy Darcy’s Canadian Union of Public Employees, take control of the government’s electricity restructuring agenda. Over the last two weeks, Mr. Eves has offered not a word of support for the sale of Hydro One, the province’s power distribution grid. Not only has the government failed to defend the $5.5-billion privatization plan, it has deliberately floated an alternative scheme known as an income trust.

Even in its most creative form, the income trust solution looks more like an apparition from Ontario Hydro’s bankrupt past than a bold step into a market-driven future. The idea also may have been orchestrated onto the stage by some of Mr. Eves’s financial backers. Wherever it came from, now is not the time for Ontario to be flirting with half-baked schemes to reform the most important industry in the province and the biggest utility system in the country.

If the government won’t support privatization of Hydro One and explain the plans to the people, that leaves few people to stand up and be counted. Energy Probe‘s Tom Adams has been out there all alone for days now, trying to support the principles of market competition and privatization. Most other players, for fear of one form of retribution or another, have been under gag orders.

Today, at least some of the players are starting to come forward. In an op-ed on this page today, Peter Budd, as chairman of the Ontario Energy Association, urges the government to get back to its privatization principles. The association’s members include the province’s gas companies, many local electricity distribution operations, and Hydro One. "The time has come," writes Mr. Budd, "for the government to make the next decision and follow through on its promises and commitments."

Mr. Budd, as a member of the original 1998 market design group, was there at the beginning. He watched the plan evolve and the government’s growing commitment to a privatized, competitive power industry that would also reduce the great $21-billion wad of debt left behind by the bankruptcy of Ontario Hydro. To back down on those plans now is an abandonment of responsibility.

And now, too, we have an intervention from the Power Workers Union, the union that actually represents the workers at Hydro One rather than the scheming union bosses at Judy Darcy’s CUPE. In newspaper advertisements today, Don MacKinnon, president of the Power Workers Union, also calls on the government to get on with the Hydro One privatization as planned.

It’s about investment and its about jobs, says Mr. MacKinnon. "Unfortunately, much of the debate about the government’s plans to seek equity for Hydro One is dominated by political rhetoric. This is both dangerous and foolish," the ad says, "given that significant investment is required to ensure continuing reliability and safety of the Hydro One system." Without private investment in the utility under private ownership, no government will be able to pick up the investment burden.

It’s a sad day in Ontario when a union leader is championing privatization and the reigning Tory government is on the defensive and promoting an alternative. Instead of capitulating to the old-line government unions, OPSEU and CUPE, and the demagogic New Democrats, the government should be out front and centre defending the electricity agenda that it put in place. Mr. Eves may think it’s cool to have the unions and The Toronto Star rooting mildly in his corner, but that support is about half an inch deep. They will all turn against the Tories in the end, and the government will need all the support it can get from the people who are its true backers