Mayoral candidate Karen Stintz is promising to sell off a “majority” of the city’s ownership of Toronto Hydro to raise some of the cash needed to build a so-called downtown relief line.
Stintz, a long-time proponent of a relief line, said the public utility is valued at more than $1.14 billion and selling at least 51 per cent of the asset would help to pay for the first phase of a project that will ultimately cost billions to complete.
The proceeds from the sale would be used as a down payment, she said.
“We need a new approach to face the growing issues our city is facing,” said Stintz, who discussed her funding plan at a campaign event at Gerrard Street and Carlaw Avenue in Toronto’s east end Monday morning.
The councillor remains a member of the TTC’s board of commissioners after she stepped down as chair last month to focus on her mayoral bid.
Despite calling it "a new approach," the idea of selling Toronto Hydro has been suggested before. In 2010, council approved a motion agreeing the sale would not be in the city's best interests. Stintz voted against the motion.
If Stintz becomes mayor, two of the hurdles she faces are getting council members on board and convincing the province to ease a tax burden that stands in the way.
As it stands right now, the city can sell 10 per cent of the utility without tax penalties.
Stintz said she would negotiate with the province to change the existing regulations so that the city can sell more than 10 per cent without taking a huge tax hit.
“I’m confident we will get the change because the province understands how important it is to invest in this line," Stintz told reporters. "It's their priority, as well."
Stintz's proposal would leave a sizeable funding gap.
The proposed relief line has not been approved by council and the city does not have a financial agreement with the provincial or federal governments.
However, Stintz believes the city would be on the hook for one-third of the cost and she said it will be easier to get financial commitments from Queen's Park and Ottawa when Toronto is first to the table with its own money.
She said ratepayers would be protected because the Ontario Energy Board - not the owner of Toronto Hydro - sets electricity rates.
City sold Enwave stake: Stintz
To build her case for selling off part of Toronto Hydro, Stintz pointed to the city’s sale of its 43 per cent stake in Enwave Energy Corp.
In October 2012, council approved the sale with a vote of 38-6, and Brookfield agreed to pay $168 million for the city’s minority share. The money went towards the purchase of new low-floor streetcars, Stintz said.
She said the relief line has been discussed for nearly 30 years and the city can’t afford to waste more time because there is already immense pressure on existing lines.
She said she can't promise a start date for construction.
“It’s not going to be tomorrow but we need to keep working," she said, adding the city has already allocated $15 million for an environmental assessment.
Stintz's opponents respond to proposal
At least two of Stintz's chief opponents in the October election are not interested in dividing ownership of Toronto Hydro.
Olivia Chow said the city's first move should be securing a financial deal with other levels of government.
“The relief line is quite expensive. We need to bring the federal and the provincial governments together and actually map out how we can do this together," Chow told reporters. "Under the current fiscal room, Toronto needs assistance. They cannot go alone.”
When she launched her campaign earlier this month, Chow said the relief line should be built "eventually."
John Tory said he and Stintz agree the relief line is a priority but they have different views on how to pay for it.
"I don't think when it comes to something like this that sort of a fire sale that comes up in a hurry before a debate is the right way to go about this," Tory told CP24 reporter Jackie Crandles.
Tory has not explained how he would pay for the line but he is promising to release a financial plan at some point in the campaign.
Mayor Rob Ford, who is campaigning for re-election, said he supports selling 10 per cent of Toronto Hydro but he will not commit to a higher percentage unless the province agrees to change the regulations so the city can avoid a tax hit.
While touting her proposal, Stintz criticized Chow and Tory over their positions on transit projects.
Stintz accused Tory of not having a financial plan for the project and denied his suggestion that selling off part of Toronto Hydro would be a "fire sale."
She targeted Chow because the former MP is pledging to scrap the Scarborough subway extension that council has already approved. Chow wants to go back to a light rail system (LRT), which council approved and then scrapped for a subway.
“Some of my opponents, including Olivia Chow, think they can come down from Ottawa and rip off the transit plans that have already been approved," Stintz said. "We need to move forward. We cannot afford to go back. We need to keep moving on the transit lines that have been funded and approved.”
Stintz has been accused of flip-flopping on the light rail vs. subway debate. She pushed hard for LRT before switching sides and pushing for a subway extension.
Meanwhile, proposals call for the U-shaped relief line to cut through lower downtown with terminating stops somewhere around Dundas West Station in the west and somewhere around Pape Station – or as far north as Eglinton Avenue – in the east.
A TTC staff report from October 2002 pegged the cost at $8.2 billion if the city builds a line that runs from the area of Dundas and Bloor streets to Eglinton Avenue, skirting along King and Queen streets in the south.
That line would increase ridership by 11 per cent and reduce demand on the Yonge subway line by 16 per cent, according to 2002 estimates.
Building an eastern relief line from Pape Station to St. Andrew Station would cost $3.2 billion, the report said.
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