Road tolls

Making somebody else pay

What is the easiest tax to sell to an electorate? A tax that benefits them, but is paid by somebody else.

In a phrase, that is why Toronto Mayor John Tory wants to tax 905 residents, and visitors to Toronto, with road tolls and a hotel tax. It is a bad idea, and I do not support it.

There is nothing wrong with the objective of building better transit. However, the people who benefit from riding transit must bear the bulk of the burden of paying for infrastructure renewal. That means Toronto residents. Were Toronto residents to pay property taxes at rates similar to what we in the 905 Belt pay (i.e. higher than Toronto), it is likely that Toronto’s housing market would not be as overheated as it is.

The City of Toronto, through the City of Toronto Act, has the ‘revenue tools,’ a euphemistic phrase which means the ability to levy taxes and fees, to do its job in raising revenue. To attempt to tax out-of-town residents is taxation without representation. You may hear some in Toronto say something like, “Yeah but you people from out-of-town come into Toronto and consume city services without paying for them, and then go home to your bedroom communities.”

Wrong.

The money that residents from outside Toronto spends on parking, lunch, shopping and entertainment in Toronto, while working in Toronto contributes to the upkeep, expansion and maintenence of Toronto infrastructure, from which residents from places like Mississauga will never benefit. As well, Mississauga is a ‘net-importer’ of labour. Some 50,000 more people per day now commute into Mississauga, largely from Toronto, than commute out of Mississauga. The consumption argument just doesn’t wash, because as many, or more, Toronto people cross the Etobicoke Creek to work in Mississauga than take the train to Union Station or stew in QEW and Gardiner traffic.

A Mississauga resident commuting to Toronto to work five days per week, fifty weeks per year would, if this measure is adopted, face as much as $1,000 in additional taxes to Toronto in return for no extra service.

Currently, the City of Toronto Act does not give Toronto the power to implement tolls on its roads. A regulation must be made by the Lieutenant Governor in Council under the City of Toronto Act. Additionally, the Act doesn’t currently permit the City to implement a hotel tax. Toronto is, therefore, asking another level of government to do its financial heavy lifting for it, through taxation without representation..

I oppose road tolls in general, with one proviso: show us the very improved transit that such tolls are purported to be paying for, and I am willing to talk. The City of Toronto has not proposed any way that residents of Peel, Halton, York and Durham Regions, or those coming from further out-of-town can realistically leave their cars at the edge of the city, and get where they are going in a rapid, efficient and effective public transportation network. We have to think of public transportation as a regional issue, and consider giving Metrolinx the regulatory authority to act region-wide. Until we can see and ride the transit that any proposed road tolls are supposed to pay for, I will speak against road tolls, and for the people of Mississauga, at Queen’s Park.

Ontario Fall 2016

State of the Province

oe-sometimes it is a stretch to remember that Canada in general, and Ontario in particular are still governed by sane and responsible people. As this is written in late November, Ireland may soon be the last remaining English-speaking member of the European Union, unless a newly-independent Scotland joins them should England and/or Wales invoke Article 50, and withdraw from the European Union. America? Who knows at this point. Will the leadership of the English-speaking world now rest with Canada, Australia, Ireland, the Caribbean, South Africa and Australia? One should also note that the largest-population country with English as its official language remains India. But what a world all nations will need to adapt to if Britain and the USA descend into insular isolationism.

That said, how is Ontario doing? It is  salient question because opinion surveys show that if the world is in a funk, Canadians in general, and Ontarians as well, think Ontario must be feeling tough times too. That assumption, however, is not true.

In economic terms:

  • Ontario’s unemployment rate has dropped to 6.4% and has been below the national average for 18 straight months, its lowest level in 8 years. Some 641,000 new jobs were created in Ontario since the recession, 247,000 jobs since 2013, and 25,000 jobs alone in October 2016. Those jobs are mostly full-time, high-skill and high-wage positions in growth industries like advanced manufacturing, renewable energy, professional services and similar careers;
  • Ontario posted higher real GDP growth in the first half of this year than Canada, the U.S. and almost all G7 countries;
  • According to Ontario’s independent Financial Accountability Officer, Ontario sits in the middle of the pack in energy costs among Canadian provinces. Because Ontario made its transition away from coal and into renewable energy early, Ontarians won’t see the cost increases coal-dependent provinces like Alberta and Saskatchewan will;
  • In 2015, Ontario’s average industrial electricity prices were 8.35 ¢/kWh in the South and 6.35 ¢/kWh in the North. These rates are lower than New York at 8.72 ¢/kWh, Pennsylvania at 9.59 ¢/kWh, Michigan at 9.13 ¢/kWh, and the U.S. industrial average, which is 8.71 ¢/kWh. What’s important about these comparisons is that even though these jurisdictions continue to rely heavily on dirty fossil fuels, our electricity rates are still cheaper. Ontario is in this favourable position even after doing the heavy lifting of rebuilding aging electricity infrastructure, and phasing out all of our coal generation;
  • Many companies recently decided to set up operations in Ontario thanks to the Province’s highly skilled workforce. GM is hiring 700 engineers in Oshawa and Markham; Thomson Reuters is moving their headquarters to Toronto, creating 400 jobs; and General Electric is moving a factory from Wisconsin to Welland creating 220 jobs.

See the 2016 Fall Economic Statement. It is a free download.

Flu Shot

Avoid being a seasonal flu statistic

Bob getting flu shot

The hands injecting my 2016 flu shot into my arm are those of Shoppers Drug Mart Pharmacist Nancy Huynh, at Glen Erin and Britannia. The flu shot is now available in Lisgar, Meadowvale and Streetsville. Get yours this fall and every fall.

Back when I was first elected, I had never had the annual flu shot. And in the two years before my first election, I was laid flat by a lingering seasonal flu virus. As a new MPP, the then-Minister of Health extolled the virtues of the flu shot. I figured the risk of any discomfort from getting the flu shot had to be less than the misery I had endured from the flu in the previous few years.

So, like a good community role model, I took my first flu shot. And that year, I never had the flu. Nor did I suffer from any adverse effects after getting the flu shot. Needless to say, the next year, I made a specific point to see my doctor that fall, and got the flu shot. And that year again, I never came down with the flu. Such was also the case, the year after, and the year after, and every year since. It’s not a coincidence. In twelve years I have been having an annual autumn flu shot, I never had the flu!

Now, a cold is a germ, and a flu is a virus. I have had a head cold, but never the seasonal flu with its weeks-long aches and pains, sneezing and coughing, and feeling like death warmed over week after week. When I have had a cold, its symptoms have usually been milder, and of shorter duration.

When the H1N1 virus scared people several years ago, they rushed out and lined up to get the flu shot. Deaths and hospitalizations fell sharply. Check out the data from the Public Health Agency of Canada on flu-related hospitalizations and deaths. You can plainly see from the graphs showing that both deaths and hospitalizations for flu-related causes dropped sharply in the years after the H1N1 scare, that the flu shot works. Just as soon as the H1N1 scare abated, and people shrugged off the need to be vaccinated against the seasonal flu, both deaths and hospitalizations shot right back to their historical levels.

In the Legislature: the flu shot is important

Let’s understand the facts:

  1. The flu shot is absolutely free, and easily available from your doctor or at many pharmacies and clinics;
  2. The flu shot works. If you take it, you are extremely unlikely to ever get the seasonal flu. Depending on the cold germ, most people even find colds to be milder if they have had the flu shot;
  3. Not taking the flu shot makes you much more likely to be laid out for a week or more with a flu virus that is almost completely preventable;
  4. The flu vaccine is made from eggs, and it is made in Canada. It’s safe, and it sure beats having the flu. You need it every year, and the flu virus ‘signature’ is locked down in February of each year to keep the flu viruses against which you are being vaccinated current.

Go to your pharmacist. Most offer the flu shot on the spot with scarcely any waiting. See your doctor. Get the flu shot at a work or community clinic. However you get it, don’t let another week go by without getting the flu shot. It matters.

Ontario at 150

Sesquicentennial Year

The Centennial logo that celebrated the 100th anniversary of Canadian Confederation in 1967.

The Centennial logo that celebrated the 100th anniversary of Canadian Confederation in 1967.

Okay, for those of us alive and self-aware in 1967, “Centennial Year” was a much easier phrase to remember.

However, in 2017, Canada celebrates 150 years as a country. Until the end of the year 2017, I will publish some stories on Canada, with an accent on Ontario. The stories will be organized around what the country was like at three anniversary points in its past:

  • At Confederation in 1867;
  • At 50 years old during World War I in 1917;
  • During Centennial Year in 1967.

Canadians who remember 1967 recall a joyous year in which the coolest type of person to be on the planet was a Canadian. Canada had a population younger than it does today, with the post-war baby boom then just complete, and a cohort of youth exploring a new and often uncharted nation of some 20 million for the first time.

Bobby Gimby’s 1967 Canada Centennial Song

Retrospect memory can be deceptive and selective, but I think most radio stations must have played this song about twice an hour for the entire year in 1967. Heard seldom since, its youthful and energetic beat sang about exactly who we were as Canadians in 1967. The star of Canada’s 1967 show was Montreal’s Expo 67, depicted in the video above. Blowing away all world attendance records for a world exposition, Expo 67’s final attendance figures topped 50 million!

The Canada 150 Logo to commemorate the 150th anniversary of Canadian Confederation.

The Canada 150 Logo to commemorate the 150th anniversary of Canadian Confederation.

Centennial projects at the family, neighbourhood, community and provincial levels were all the rage. Note how many communities have a ‘Centennial’ boulevard or parkway, a Centennial centre, square, park, arena, plaza or other place. This coming year will be a time to reflect on who we came from, how we grew up as a nation, and what proud and peaceful history our newcomers and their children are joining. We will think of where we are headed growing together while living in Canada’s third century as a nation.

Contribute your stories on these themes to our Constituency Office. If this project takes flight, I will spin it off into a unique web site on its own. The year 2017 will be a wonderful and proud year to be Canadian.

See the Canada | Ontario 150 Page on this web site.

GO Transit Improvements

More GO parking, another new train

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In mid-August, Metrolinx announced that a welcome addition of more than 250 new parking spots will be constructed at the Streetsville GO station by 2018, bringing parking capacity to about 1,700 spots. The new parking space will be located between the existing tracks and the west parking lot.

During the past three years, 100 new parking spaces have been added at Streetsville, on the east side of the tracks. These new spots, accessible through Streetsville at Station Road, are now in service. These east-of-the-tracks parking spaces expanded an existing lot using local land bought by GO Transit for the purpose of parking expansion. As well, Streetsville now features free, designated carpool spaces.

Most importantly for weekday commuters, one new eastbound and one new westbound train will begin service after Labour Day. The new eastbound train will be an early morning run, leaving Milton at 5:59 a.m. Estimated local arrival times for the new train would be about 6:10 at Lisgar, 6:15 at Meadowvale and 6:20 at Streetsville. The new westbound train will leave Union Station at 5:55 p.m. each weekday.

Instead of trains pulling out of Streetsville at full capacity, the new train’s 1,600 seats will enable more riders who get on at Erindale, Cooksville and Dixie to get a seat on the morning GO train.

It is similar in the evening, where the extra train will enable more commuters to have a seat on the way home if they arrive on the platform at Union Station within five or six minutes of the westbound Milton train’s departure. Those westbound trains between 4:50 p.m. and 6:20 p.m. are often standing room only when they get in motion at Union Station. It can be a half-hour stand until seats become available as the train begins to significantly empty at Cooksville.

For commuters using the Square One Bus Terminal, construction will begin this fall on an additional new 130 parking spaces, bringing the total parking space at Square One to more than 330. The Square One terminal now includes a new station building to better protect passengers from weather, three GO service windows, and accessible public washrooms.

Ontario’s transit contributions to Mississauga

Since 2003, the Province has provided $307 million to the City of Mississauga to improve and expand public transit, including:

  • $167 million through the Gas Tax Program;
  • $65 million for the implementation of the Mississauga Transitway, as well as an additional $48 million to the project through GO Transit;
  • $26.5 million toward the development of transit along the Hurontario and Dundas corridors;
  • $48 million through various vehicle funding programs to buy new transit vehicles, and other one-time funding.

In 2003, GO service on the Milton Line consisted of five eastbound trains in the morning and five westbound trains in the evening, each pulling ten passenger cars. The Milton GO Line is now served by nine eastbound trains in the morning, and nine westbound afternoon trains, each pulling 12 passenger cars. This means more than double the capacity to move commuters since 2003. As well, all the stations on the Milton Line have been upgraded. The Lisgar Station was newly built in 2006-07, completed under budget and ahead of schedule, and entered service on September 4, 2007. Parking at Meadowvale and Streetsville have both greatly expanded during the intervening years, and MiWay (i.e. Mississauga Transit) connector buses now allow many more commuters to leave their cars at home and get to the GO system entirely on transit.

The Presto Card

The advanced technology in Metrolinx’s Presto Card has made fumbling for exact change, lining up to buy multi-ride tickets, inserting $20 bills into TTC token dispensers, and ordering monthly passes things of the past. Gone are the days when the western Mississauga commuter needed to pay three different companies for transit in three different ways: exact change for the connector bus, a pass or ten-ride ticket for the GO train, and a token for the TTC subway. Today the Presto Card, used by the overwhelming majority of regular commuters, does it all.

Thinking of a gift for a senior in your life? Consider getting him, her or them a Presto Card, and linking the Autoload function to your own credit or debit card. For the lucky senior (or student) in your life, that gift of an autoload on your own credit or debit card allows them to take the bus, GO Transit trains and buses, and much of the TTC with a single tap, and no more worry about exact change, passes or tickets.

More GO Transit reading

 

Diwali 2016

Celebrating the Festival of Light

The religious festival of Diwali is celebrated by Hindus, Sikhs, Jains and by many Buddhists. Celebrants light candles, and set off fireworks signifying the triumph of light over darkness, and good over evil. The celebrations commemorate the homecoming of Ram after 14 years in exile in the forests, and his victory over Ravan. Celebrants mark Diwali with prayers, lighting of divas, fireworks and sharing of sweets and gifts.

In the Sikh community, this day is celebrated as Bandi Choor Diwas. The Sixth Guru, Guru Hargobind Sahib-Ji, was freed on this day in 1619 from imprisonment in the famous fort of Gwalior by Emperor Jahangir. Guru Sahib negotiated his release, and that of 52 kings and princes, to coincide with Diwali.

To mark Diwali in 2016, our office will again host our Diwali reception at Vic Johnston Arena. Our western Mississauga residents are invited. Click here. Our community is served by two main Mandirs (temples): the Hindu Heritage Centre, now a Streetsville landmark; and the Ram Mandir, near Hurontario and Derry. Both held celebratory dinners, which I attended. As well, I joined my Gujarati friends at the awesome BAPS Swami Narayan Mandir. And I attended Diwali Party hosted by friends at the Mississauga Senior Club.

Lights

Celebrated all over the world, Diwali is the festival of lights. Come join your neighbours for a short Diwali reception.

Diwali (or Deepavali, the “festival of lights”) is an ancient Hindu festival celebrated in autumn (in the northern hemisphere) every year. Diwali is the biggest and the brightest festival in India. The festival spiritually signifies the victory of light over darkness. Click here for more background on Diwali.

It is one of the most widely-celebrated festivals on earth, and we ought to have a community reception in our own neighbourhoods. More than 120 people attended our Diwali reception on in November at the Vic Johnston Community Center to celebrate the 2015 Festival of Light. Happy Diwali, or as they say it in Hindi, Shubh Dwali.

Fluoride

Community water fluoridation petition

In late November of 2014, the Ontario Legislature debated my Private Member’s Resolution urging the Ministry of Health to adopt a recommendation by Ontario’s Chief Medical Officer of Heath, Dr. Arlene King, to ensure that all Ontarian communities have access to optimally-fluoridated drinking water. The Legislature adopted my resolution unanimously. A strengthened version of the resolution also passed unanimously in early October of 2016.

Fluoride is a mineral that occurs naturally in water, even sea water. Where levels of fluoride in drinking water are in the range of 07. to 0.8 parts per million, it strengthens tooth enamel, and helps reduce tooth decay. Ask your dentist.

There is a vocal group of nutheads and fanatics that use junk science, myth, paranoia and downright misinformation to suggest that fluoride is harmful. They are dead wrong. Don’t believe their hysterical claims.

In Mississauga, our drinking water has been fluoridated for decades, and continues to be so. Ensure that your Mississauga city councillor knows that you support protecting our teeth through fluoridated drinking water. See my part in the debate in the Ontaio Legislature in the YouTube link below.

In every community in Canada that has discontinued the safe and effective treatment of municipal drinking water with fluoride, rates of cavities and tooth decay have shot up within two years. Calgary Alberta, Dorval Quebec and Windsor Ontario are such examples of stupidity trumping common sense and sound science.

Said Dr. Arlene King of fluoridation in a document released as her office began its study of oral health in Ontario in 2011-12, “As Chief Medical Officer of Health for Ontario, I am very concerned about the loss of fluoridated drinking water in certain communities in spite of consistent evidence that water fluoridation is safe and effective. More than 90 national and international professional health organizations, including Health Canada, the Canadian Public Health Association, the Public Health Agency of Canada, the Canadian Dental Association, the Canadian Medical Association, the U.S. Centers for Disease Control and Prevention (CDC) and the World Health Organization, have endorsed the use of fluoride at recommended levels to prevent tooth decay. In fact, the use of fluoride in drinking water has been called one of the greatest public health achievements of the 20th century by the CDC.” Read the complete document here.

Electricity rates

Rebate of HST for families and farms

One of the key points of the Ontario Speech from the Throne to begin the Second Session of Ontario’s 41st Parliament was a proposal to rebate residential electricity users the equivalent of the provincial portion of the combined GST and HST, in other words an eight percent on-bill rebate.

The measure, if passed, would take effect January 1, 2017. For a typical Ontario residential customer, that would amount to an average saving of about $130 per year.

Businesses, large and small, can deduct the sales taxes they pay from the sales taxes they collect using the flow-through of a value-added tax such as Canada’s GST and various provincial harmonized sales taxes.

Read my September 2016 speech to the International Economic Forum of the Americas about Ontario’s electricity system and the choices made by the Province.

As well, residential users may be eligible for other programs to help reduce energy costs:

The Ontario Electricity Support Program
Provides up to $50 in monthly credits directly on the bills of eligible low-income electricity consumer, and up to $75 per month for those with unique (such as medical devices) electricity requirements. Click to find out more.
Ontario Energy and Property Tax Credit
As part of the Ontario Trillium Benefit, the Energy and Property Tax Credit can provide up to $1,008 per year for low- to moderate-income individuals and families, and up to $1,148 for qualifying seniors. Click to find out more.
SaveONenergy for Home Conservation Programs
Offered by local electricity distribution companies such as Enersource, these programs provide financial incentives for electricity-saving measures such as LED lighting, EnergyStar-certified ceiling fans, baseboard programmable thermostats, clotheslines, and advanced power bars. Many households can achieve about $80 in savings by replacing incandescent light bulbs, and installing a newer and more energy-efficient air conditioner. Read more.

Other tips:

  • The least-used function on dishwasher and clothes dryers is the time delay. Stack the dish washer during the day, and set it before bed to start in the small hours of the night. The warm dishes will be ready to unpack when you wake up;
  • Back in the ‘good old days,’ Monday or Tuesday were often wash days. These days, it makes no difference what day of the week you pick, but it does what hour of the day you pick. Run the washing machine and dryer after 7:00 p.m. while you are home, and when electricity costs about a third of what it costs during the morning or afternoon;
  • The principal benefit of the air conditioner is less that it cools the air, and more that it dries the air in the house. Keep the doors and windows closed, obviously, while the air conditioner is running, and set the temperature higher in the summer. Try, for example setting your air conditioner at 24 degrees instead of 20 or 22 degrees;
  • Home appliances don’t grow more energy-efficient with age. Replacing an appliance more than ten years old could repay you with energy savings fairly quickly.

Hydro One

How Ontarians will keep moving in urban areas

LRT vehicle

This is the proposed light rail transit vehicle, capacity about 200, that will carry passengers up and down the Hurontario Street line between Lake Ontario and Brampton City Centre.

Both on personal vacation trips, and on government business trips, I’ve been able to see and experience parts of Asia in the last dozen years. One can feel the vitality in the people, and also in Asian cities. I’m reminded a bit of the North America in which I grew up after the Second World War. North America had not been damaged by the war, but had lived through a decade (the 1930s) of depression, and then six years of war, after which millions of soldiers were returning. North America’s economy then switched from producing the tools of conflict to the products of peace. Then in North America as now in Asia, everybody needed everything almost immediately.

North American cities invented suburbia. Asia lacks the geography to spread most of the world’s population as thinly as we do outside our large cities. Asian cities – and European cities – are showing North America how to re-invent access to a city without needing to bring two tons of steel (a car) with you.

One either believes that Ontario, and especially the Greater Toronto and Hamilton Area (GTHA), has the infrastructure, especially transit, investment needs or you don’t. If you do, you’re willing to do something about the need, or you aren’t. And if you grasp the need, and want to do something about it, you’re either willing to make the choices to get the work done, or you are not.

That’s our Ontario urban quandary in a nutshell. Canada’s economic engine is approaching Asia in density, and choking on cars and trucks at the expense of getting anywhere and doing anything. Economists call this lost productivity. Most of us know what it is like to be parked at 10 km/hr on a highway that’s rated at 100 km/hr if you’re doing the legal limit. The Government of Canada’s recent transportation infrastructure spending has been nowhere near enough to maintain what we already have. That leaves the cities and the Province. So how does one pay to expand transit options to get around the region of Ontario that drives one third of Canada’s economy? What is the range of choices available if the Province accepts the need for better infrastructure and is willing to do something to address that need? Should Ontario and our cities:

  • Just do nothing at all? Just ignore the problem and hope it will either go away, or someone else will fix it?
  • Toll the roads we drive on? Or raise transit prices even more?
  • Raise taxes: income, corporate and/or consumption taxes, to pay for ways to move about in our cities?
  • Borrow more money to fund better urban movement?
  • Disassemble health care and education in order to pay for better transit? Why those two areas? Because that’s where most of the Province’s money is spent;
  • Find some capital money in other assets in which the Province already has existing capital?

Doing nothing isn’t an option! People and goods can’t move on our highways and streets. Economists can quantify the billions Ontario is leaving on the table in traffic. The economists call this the opportunity cost. Toll our roads? I tend to side with people who feel that they’ll talk toll roads when they can see and ride on the transit the tolls propose to pay for. Transit prices are subsidized everywhere in the world, and Ontario’s public subsidy is already one of the globe’s lowest. We don’t need higher fares; we need more riders and more of the money that shouldn’t go into further clogging highways moving people on transit.

Ontario has become the most competitive jurisdiction in North America for its low tax ‘burden’ on individuals and businesses. Those who say ‘just raise taxes’ risk chasing away the geese that lay the golden eggs. Those who may wonder if governments are pandering to the wealthy miss the point. Even if the wealthiest one or two percent had all their wealth simply taken away from them, it wouldn’t be enough to solve the gridlock problem. The tax load must be a broadly-shared one within Ontario’s large middle class. The prevailing wisdom is that Ontario income, business and consumption tax rates are about where they should be right now.

Ontario borrowed a lot of money to get through the recession. There was a choice, and as a member of the government caucus, I recall the discussion about the choices. We could have lost the auto industry. We could have seen perhaps a million Ontario families lose their livelihood as the Province fired police officers, nurses, teachers and cut support levels and programs to keep bankers happy and ratios of debt-to-GDP consistent. The United States went down that austerity road. Ontario had recovered all its recession job losses fully three years before our American neighbours did likewise.

The jury is in on austerity. It didn’t work in the USA, or anywhere else. Ontario’s borrowing, however, left the Province’s families able to continue their lives and careers. The cost is that there is a limit to what is healthy to borrow. The Province, which has never missed a debt reduction target, remains on schedule to return to a structural surplus and reduce net public debt by 2017-18, as it did during its three consecutive budget surpluses (2006, ’07 and ’08) prior to the recent recession. Borrowing it all to build transit is not an option.

If Ontario would be asked to take apart something to find a lot of money to build something else, it has to go to areas where it spends most of its money: public health care; primary, secondary and post-secondary education; highways and assistance to cities; administration of justice and so on. Cannibalizing what manifestly works well isn’t how to fund new urban transit that the Province also wants to work well.

This led the Province to ask itself if there is any way to keep control of assets that we have, we value, we use and we need, and to ‘unlock’ some value within them. For example, many Ontario-based pension funds note there aren’t many public assets that pension funds can buy in this province, and thus those funds invest Ontarians’ money elsewhere. In the autumn of 2015, the Canada Pension Plan Investment Board, and two prominent Ontario pension funds, acquired a portion of the Chicago Skyway, a toll road that links downtown Chicago and its southeastern suburbs. Newfoundland-based Fortis Inc. in 2016 acquired U.S. electric transmission company ITC, a similar entity to Hydro One, for US $11.3 billion. Is it a problem if Ontarians, as investors, own part of what, as taxpayers, they already own through their pension funds?

The Hydro One proposal

Background reading:

Hydro One transmission corridor

Ontarians retain effective control over electricity transmitter Hydro One with a 40 percent share, while ‘unlocking’ funds to invest in building transit.

The Ontario Budget for 2015-16 proposed a partial sale of electricity distribution company Hydro One, with the net proceeds going to assist in building transit in Ontario. At present, about 30 percent of Hydro One is now publicly-traded stock. What constitutes a ‘controlling interest’ in a publicly-traded company? Experience and court decisions suggests that ‘control’ does not mean ‘dominance[1].’ Ontario’s proposed 40 percent ownership of Hydro One, as a publicly-traded entity, represents solid, effective control of such a broadly-owned entity. The Province has veto power over the CEO, and is able to fire the entire Board, among other safeguards.

In Mississauga, we are used to dealing with a privately-owned local electricity distribution company, Enersource. Like what is proposed for Hydro One, Enersource is a publicly-traded entity. As a publicly-traded company, Hydro One is now subject to the same disclosure, transparency and audit rules, through the Ontario Securities Commission, that govern all other publicly-traded companies, including Enersource. Publicly-traded companies are regulated through the Ontario Business Corporations Act, and the Ontario Securities Act.

Though debt is not equity and a lender is not an owner, a homeowner retains ownership and control over a family home even though the mortgage lender’s loan amount may be upwards of 90 percent of the home’s value. In debate in the Legislature, I responded to an Opposition Day motion concerning Hydro One on behalf of the Government. Click to read my response.

The ‘unlocked value’ in a public asset such as Hydro One would enable Ontario to pay for additional public assets it would otherwise be unable to build. In the case of Hydro One, the Province maintains uncontested control of Hydro One itself.

Hydro One Q & A

Question: Won’t a partially-private Hydro One be able to increase rates to businesses and consumers without limit?

Answer: Absolute nonsense! This is pure fiction circulated by groups advocating for the do-nothing status-quo. The rates that Enersource, or Toronto Hydro, or Powerstream, or the dozens of other distribution charge their customers are not set by the distribution companies, but by the Ontario Energy Board. An assertion that any distribution company, including our own Enersource (which is 100 percent private) can simply raise rates is false. Hydro One has less than a quarter of the distribution business Ontario-wide. It does not make the market. It takes the rates approved by the OEB. Always has; does now; will continue to do so. Period. People who assert higher rates, ‘just like happened elsewhere,’ will never say where the ‘elsewhere’ is, because they can’t!

Question: Won’t Ontario lose billions in annual revenues that could be used for other purposes?

Answer: Only if you assume that Hydro One’s business will never change, that its revenues will never grow, and that it will never do anything that it is not doing now. The history of successful privatizations shows otherwise. Hydro One is more likely to move into other areas of business, grow its revenues and increase its profitability once its operational decisions are no longer made on the floor of the Ontario Legislature.

Question: Will a private Hydro One mean Ontario will lose control over its energy future?

Answer: Energy in Ontario is regulated by independent bodies such as the Ontario Energy Board, planned and managed by entities such as the Independent Electricity System Operator. Hydro One, with its approximately 1.1 million customers, has less than a quarter share of the electricity distribution marketplace now. Second place is the newly-merged (and publicly-traded, just like Hydro One) entity consisting of Enersource, Verizon, Powerstream, Brampton Hydro and other local distribution companies, with just less than one million customers. Toronto Hydro is third in Ontario with just less than 900,000 customers. Some 60 other local distribution companies compete for the remaining 20 percent of the market. Firm control over electricity, regardless of who generates or transmits it, remains in the hands of Ontarians.

Question: What will the funds from the successive share offerings be used for?

Answer: Funds from the sale of such assets as Hydro One do not become revenue for the Province. Instead, they go into the Ontario Trillium Trust to use in building additional infrastructure assets. For example, the Alberta Heritage Trust is a similar such entity. Such reasonable safeguards ensure that the entity continues to focus on the public good for which it was created, and how the entity operates to benefit its shareholders, including the citizens of Ontario.

[1]An article by Liz Hoffmann in a 2015 issue of the U.S. legal newsletter Law 360 states: “The definition of controlling party always has been something of a moving target, said Bernard Black, a finance and law professor at Northwestern University. Back in 1988, the Chancery Court held that a 39 percent stake in Macmillan Inc. was enough to give a hostile buyer effective control. Seven years later, in a heavily litigated battle for Unitrin Inc., the court said 28 percent was not. So when it comes to stock ownership, somewhere between 28 and 39 percent is a fuzzy line that denotes control, moving with the facts specific to each case, Black said.