McGuinty won't rule out sale of Ontario's electricity assets to trim deficit
The Canadian Press
Published Wednesday, December 16, 2009 5:24PM EST
TORONTO - Hiring two banks to review Ontario's assets such as Hydro One and the Liquor Control Board will ensure taxpayers get maximum value and doesn't necessarily mean those agencies will be sold to trim the $24.7-billion deficit, Premier Dalton McGuinty said Wednesday.
McGuinty dismissed suggestions that just musing about selling off Ontario's electricity assets would frighten people who are afraid of seeing their basic utilities owned by for-profit corporations.
"I'm not scaring anybody, and I don't know if anybody here wants to scare anybody," he said, looking at the media.
Despite severely criticizing previous Progressive Conservative governments for trying to privatize electricity, McGuinty wouldn't rule out a sale of Hydro One, Ontario Power Generation or any other Crown corporation.
"We've got a responsibility to take a look at all of our assets to make sure we're getting the best bang for our buck," he told reporters prior to the last cabinet meeting of the year. "Especially now in the context of a global recession and a significant deficit."
McGuinty insisted he remains committed to public power, but said he would not "speculate" on the outcome of the asset review. When reminded that he used to rail against previous Conservative governments for trying to sell Hydro One and for selling Highway 407 to balance the province's books in 1999, the premier said the recession has changed things. "There has been an important, unprecedented, unforeseen, intervening event; the biggest global economic recession in 80 years," he said.
However, just like his previous trial balloon about possible unpaid days off for civil servants, which McGuinty shot down last month days after talking about the idea, the premier played coy Wednesday by noting he hasn't actually said anything is for sale.
"I haven't talked about selling off any assets," he said.
"I think what Ontarians expect of me is to do what I believe to be right in the circumstances, always informed by their values and aspirations."
Critics of selling off Crown corporations point out the government would be able to book revenue only to the extent that the sale price exceeded the book value of the asset, which could make the whole idea less attractive to government.
Asset sales were a big part of the Common Sense Revolution that helped propel Mike Harris and the Conservatives to power in 1995, with promises to sell the LCBO and to actively explore the sale of other properties including TVOntario -- sales that never happened.
Their past policy didn't stop the Tories from lashing out at McGuinty and the Liberals for considering asset sales.
"This is an unprincipled, fire sale approach to a made-in-Ontario by Dalton McGuinty $25-billion deficit," said Opposition critic Peter Shurman.
"It doesn't take into consideration anything other than the desperate need for money."
The New Democrats said "selling off public assets at fire-sale prices in the midst of a recession" is exactly the sort of policy that McGuinty used to denounce.
"The speculation around the selling off of public assets is one that I think is old and tired," said NDP Leader Andrea Horwath.
"It's very clear that when these public assets are sold off, the public gets a bad deal."
The government has asked CIBC World Markets and Goldman Sachs Group to look at the valuation of the Crown assets to make sure taxpayers are getting maximum value for their money, said Finance Minister Dwight Duncan.
"It wasn't a question about do you sell this asset or not, it was more questions about the management of capital, are their better ways to manage it, can we lever this asset for some other public good," Duncan told reporters.
"Even if you get to the point where you make the decision (to sell an asset), you may not get the deal you want, you may not get a good deal for taxpayers."
Earlier this fall, Duncan questioned the wisdom of asset sales to meet short-term budget needs, dismissing them as a "one-time opportunity" that would do little to address structural deficits.
Each Ontario cabinet minister was seen carrying a gift package of the LCBO's high-end Vintages wines as the ministers left their meeting Wednesday afternoon.