Bill 36 fear-mongering misses mark

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This article was published 18/10/2022 (1421 days ago), so information in it may no longer be current.

It is the worst kind of political theatre – the kind that plays on the anxieties of Manitobans who are already worried about the impact of rising costs on their ability to make ends meet.

For the past several months, there have been numerous reports about the Stefanson government’s Bill 36 – The Manitoba Hydro Amendment and Public Utilities Board Amendment Act – and the impact it could have on electricity rates.

Opposition NDP Leader Wab Kinew Kinew claims the legislation guarantees yearly increases of five per cent. “It’s looking like this is going to be the start of five per cent increases at Hydro year after year,” he says.

NDP Hydro critic Adrian Sala says, “The fact that they’ve capped it at five per cent is not a protection for Manitobans … That is a huge rate increase for Manitobans.” He claims Bill 36 paves the way for the privatization of Manitoba Hydro.

In an op-ed published in this newspaper last month (Bill 36 is bad for consumers – September 21, 2022) Consumers’ Association of Canada – Manitoba board member Jacquie Wasney argued Bill 36 “is a step backward for our province, and it is bad for consumers.”

She added the legislation “takes away the PUB’s authority to look at things that have been important considerations in the past, such as whether Hydro’s financial targets are appropriate for rate-setting, or whether its day-to-day capital spending is prudent.”

Last week, several people opposed to Bill 36 appeared before the standing committee on social and economic development. Dale Friesen, a senior consultant for the Manitoba Industrial Power Users Group, argued “Manitoba’s much-touted energy advantage is rapidly eroding after a decade of rate increases that have exceeded the historic rate of inflation.”

CUPE Local 998 president Michelle Bergen echoed Sala’s claim that the legislation would open up Manitoba Hydro to privatization.

Based on that rhetoric, Manitoba Hydro customers would have every reason to fear massive rate increases in their electricity bills for years into the future. But here’s the problem: the only thing massive here is the factual divide between the rhetoric and the actual facts.

Contrary to the claims by Kinew and Friesen, Bill 36 does not guarantee huge rate increases in future years. To the contrary, it would cap any increases at five per cent or the rate of inflation, whichever is lower. In other words, the increase couldn’t be more than five per cent in any year, even if the inflation rate is higher than five per cent (as it is right now).

More importantly, that is the maximum rate increase. There is nothing in Bill 36 that prevents the increase from being lower.

Similarly, there is nothing in Bill 36 that positions Manitoba Hydro for privatization. If anything, a legislated cap on rate increases would make the utility less attractive to a prospective purchaser.

As to the argument that Bill 36 limits the powers of the PUB, the reality is that the legislation would still require PUB rate application hearings every three years. Such a multi-year rate-setting mechanism is consistent with the approach taken in other provinces, and provides Hydro customers with greater cost certainty over that period of time.

Beyond that, the legislation would actually give the PUB new powers to review and make recommendations about any Hydro proposal to develop a major new power generating or transmission facility, or enter into a new major long-term power purchase or export contract.

None of this is spin; it’s fact. Bill 36 and an explanatory note are available online at https://web2.gov.mb.ca/bills/42-4/b036e.php. Read it for yourself.

Having said all of that, there is an even clearer reason why the noise about Bill 36 is really much ado about nothing — because the portion of the bill regarding electricity rates would not take effect until March 31, 2025, which is almost 19 months after the scheduled date for the next provincial election.

With polls indicating the Opposition NDP are headed toward a decisive win, that likelihood means a Kinew government could easily rescind the legislation before it takes effect.

With inflation making everything more expensive and a cold winter on the horizon, Manitobans already have a long list of things to worry about. Bill 36 should not be on that list.

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