By Gerry Barker
Posted October 1, 2015
Guelph, Ontario – There are two developments that have occurred under the Wynne watch at Queen’s Park. Both are self-inflicted by a premier who doesn’t seem to grasp that you cannot continue to spend tax dollars that you don’t have. For the seventh year in a row, the Ontario Liberals have held the reins of power and have spent more money than it had taken in from the taxpayers.
Today, Ontario is carrying a $10 billion plus deficit. That does not include the most recent example of spending $61 million on a Northeast Ontario telecommunications system called Ontara. Bell Aliant purchased the system for $6.3 million.
In its wisdom, the Liberals hired consultants, lawyers and “other advisors” to expedite the deal with Bell Aliant that cost taxpayers $6.5 million.
It’s the latest in a series of bungled fiscal management issues that have plagued Premier Kathleen Wynne, who succeeded Dalton McGuinty in the eight-year plundering of the Ontario treasury.
The gas plant demolitions are still around
Let’s start with the demolition of the two natural gas-fired power plants under construction in Mississauga and Oakville. They were decommissioned just before the provincial election because there were four Liberal members of the legislature that were facing defeat if the government completed the plants. The decision by the McGuinty government worked so well that the four were elected and gave the Liberals a majority in the Legislature.
It took two years to learn that ghastly project, part of McGuinty’s plan to reduce climate change, cost Ontario taxpayers just over $1 billion to tear down and clean up and settle aborted contracts.
It was nimby-ism gone wild.
Let’s turn to the latest scam perpetrated by an elected government — the semi-privatization of Hydro One. The premier is adamant that 60 per cent of the huge public corporation will be sold. The figures are assumed, as the offering of the private sector has not yet been made public.
Undaunted, the premier says the sale will gross $9 billion to the province. When $5 million is used to reduce Hydro One’s massive debt, the premier will be left with $4 billion to invest in infrastructure, but not reducing the provincial debt of $10 billion.
For many years now, consumers have been paying a portion of their electric bill for debt reduction of the former Ontario Hydro. Yet, with millions collected, the government has never been given the figures of how much that $34, billion amassed by the former Ontario Hydro has been reduced.
Nor has there been any annual report of the debt reduction plan or when the old debt will be paid off. Or are the public utilities collecting the debt repayment charges then submitting it to the government or the agency responsible?
It is one of the deepest secrets perpetuated on the public be a provincial govertment agency.
Why is the Wynne government imposing this sale?
The polls show that the majority of Ontarians oppose selling Hydro One. Yet the premier pushes on with the advice coming from Ed Clark, former CEO of the Toronto Dominion Canada Trust bank. He is the one who recommended offering beer in supermarkets. Instead, he opted not to end the foreign beer maker’s monopoly of price fixing and exclusively distributing beer in the province.
The Hydro One sale is another Clark-driven plan to free up badly needed capital for the Kathleen Wynne Liberals. The effect of this proposal will take years to establish whether it was a good idea at the time, or not.
Another disturbing part of this sale is the salary to be paid to Mayo Schmidt, the new chief of the privatized Hydro One. He is to receive up to $4,000,000 a year. That’s four times the salary of his predecessor, Carmine Marcello. But Marcello will be staying on in the new company earning $500,000 a year to facilitate the turn over to Schmidt and the new owners.
Despite these excessive salaries and benefits, the premier insists that the province will retain operational control of the new Hydro One. When you sell off 60 per cent of the utility, perhaps the premier should explain how the government retains control?
So, deny breakfasts for those students coming to school hungary
This is the same government that cannot manage its primary and secondary education systems. The only way, it seems, is to pay off the union teachers and support staff contract increases with money the government doesn’t have.
Earlier this year, Premier Kathleen Wynne told the parties involved that the government had no money to meet their demands.
Regardless, almost all of the teacher unions agreed to accept a 2.5 per cent increase plus increased benefits. The lame explanation from Minister of Education, Liz Sandals, was the money needed would be a “net zero” change in the education budget. She failed to say which programs would be dumped to accommodate the teacher’s increases.
Just two years ago the Wynne/Sandals duo paid $463 million to the various teacher unions to stop job actions that were creating distrust and anger among students and parents.
Despite the schools being open for three weeks this September, two remaining unions are working to rule because their contracts expired more than a year ago. This job action is denying students services and complicating life for thousands of families.
Kathleen Wynne needs to seek advisors who will get her out of the financial mess that she has created without the help of former banker Ed Clark. Business, and the business of politics, are two different worlds that do not cohabitate well.
The formula is simple, Premier, cut costs. Now in your second year of the four-year term it is the right time to tighten up costs and reduce capital spending.
Otherwise, the alternative is not attractive.
Retired newspaper executive, Gerry Barker is the editor of guelphspeaks.ca, a blog commenting on community, provincial and national affairs. He may be reached at: firstname.lastname@example.org