'No plans' to privatize, then and now

Progressive Conservative Leader Hugh McFadyen can't get the Manitoba Hydro privatization monkey off his back because privatization is as fundamental to the PCs as universal social programs are to the NDP.

Earlier this year, McFadyen's star candidate in Seine River, former Liberal and Winnipeg city councillor Gord Steeves, advocated selling off Manitoba Public Insurance.

"For me, this comes down to a very basic philosophical question: is auto insurance a service that government needs to provide, or could this service be provided by the private sector?" Steeves said in a TV interview. "The obvious answer to me is yes, it could."

McFadyen quickly squelched the comment. "I think we've made it clear: we're not coming in to privatize Crown corporations. Everybody has opinions. That's not party policy."

But that doesn't fix McFadyen's problem. First is his personal history. "Hugh has a strong background in advocacy," reads his official biography at Aikins, MacAulay & Thorvaldson LLP. "He served as principal secretary and senior policy advisor to premier (Gary) Filmon between 1995 and 1999, playing a central strategic role in contentious initiatives ranging from the sale of Crown corporations to health reform. He went on to become a senior consultant with Toronto strategy firm Navigator Ltd., advising clients on making their case in the court of public opinion -- covering energy restructuring..." (He advised the Mike Harris Conservatives on privatizing Ontario Hydro.)

Second is his party's history. McFadyen echoes word for word the year-long denials Filmon and his ministers uttered to assure Manitobans they wouldn't privatize the Manitoba Telephone System right up to the day they introduced the legislation in 1996.

Throughout 1995, as the Filmon government conceived, designed and executed privatization behind closed doors, it never stopped insisting it had "no plans" to sell off the venerable Crown corporation.

"I can indicate that we do not have any plans (to privatize MTS,)" Filmon said on May 24, 1995. "We are not driven ideologically or are hidebound as members are opposite. We continue, obviously, to keep an open mind on all opportunities that are presented to us, but we have no plans to do that."

"The restructuring was done for reasons that have nothing to do with privatization," MTS Minister Glen Findlay said Sept. 26, 1995, after the government broke MTS into four divisions. "Privatization, as a principle, is not driving the organization, not at all. The only person that is raising the issue of privatization is the NDP Opposition, the only people."

The denials kept coming, even after three brokerage houses were hired to assess MTS's value and advise on its future. "Madame Speaker, I have said before and I will say again that we have not entered into agreements with brokers to privatize, not we nor the telephone system," Filmon said Dec. 8, 1995. The brokerage houses were hired simply "to evaluate the new and changing circumstances in which our Crown corporations now operate."

In January 1996, Manitobans learned Mike Bessey, Filmon's close confidante and adviser, had applied to Harvard University's graduate school of design on Feb. 14, 1995 -- well before the writs were dropped for the April 25 provincial election -- to do his doctoral thesis on "The Consequence of Ownership: Benefits and Costs of Privatizing the Manitoba Telephone System."

The stonewalling continued right up to May 2, 1996, the day the government rolled out its $700 million privatization plans at a spiffy, multimedia news conference at the Winnipeg Convention Centre.

Filmon immediately began the same evasive routine he used for MTS to dismiss privatizing Hydro and MPIC: "I have absolutely no plans to do any of that. But... if their environment changes, if they were, because of deregulation, put into different circumstance... then we'd have to take a look at it."

Actually, the Hydro privatization ball had begun rolling two months earlier. Energy minister Darren Praznik stressed the government's "firmness" that Hydro not "become a drain on the taxpayers but be able to stand on its own feet. The only way you could privatize it is if you had enough competitive players to give you the competition that would result in keeping rates lower."

By 1998, one year after privatization, Manitobans owned less than 20 per cent of MTS stock, 1,350 employees had been laid off and phone rates had risen 37 per cent.

Filmon was appointed to MTS Allstream's board of directors in 2003. According to the 2011 MTS Management Proxy Circular, the market value of his shares and DCUs (deferred compensation units) is $483,435, and he received $147,200 plus expenses to attend eight board and 16 committee meetings in 2010 and 2011.

Frances Russell is a Winnipeg

author and political commentator.

Republished from the Winnipeg Free Press print edition September 28, 2011 A14