Hydro needs a visionary jolt

Opinion

Hey there, time traveller!
This article was published 05/12/2023 (680 days ago), so information in it may no longer be current.

The recent announcement of joint federal-provincial investments in Manitoba Hydro infrastructure hopefully signals a turning of the page on a dark era for the utility. In a forthcoming book, we document how the privatization and austerity agenda of the Progressive Conservative government tarnished the crown jewel of the province’s treasured suite of publicly owned corporations.

Like the broader public sector, Manitoba Hydro was subjected to forced privatization, wage freeze directives, and multiple rounds of 15 per cent management cuts. This left a lasting legacy of understaffing, low employee morale and a reliance on costly, often out-of-province contractors for service that was previously efficiently delivered by Manitoba Hydro staff. In addition to these cuts, the government-installed leadership at Manitoba Hydro, instead of prioritizing the future energy needs of Manitoba, obsessed over reducing Manitoba Hydro’s debt and imposing benchmarks inappropriate to a government-owned utility with a monopoly on electricity provision.

As the federal government was launching new climate change, green energy programs and partnerships for an expanded pan-Canadian energy grid, the conservative approach to hydro development took a pass on profitable opportunities to expand generation and transmission in the province at a time of record low borrowing rates available to finance such opportunities.

The misguided nature of this austerity approach became crystal clear in the final week of the recent election campaign, with a leaked Manitoba Hydro briefing note suggesting the lack of electrical generating capacity for major economic development projects (remarkable, given the highly-publicized inquiry in 2020 by Brad Wall that claimed Manitoba Hydro was supply heavy as a consequence of building the Keeyask Generating Station). Increased Manitoba Hydro generating capacity is needed to transition away from fossil fuels and meet emissions reduction commitments, a strategy that will not only save Manitobans money but also boost economic growth, attract investment, and create good jobs.

Expanding energy production through Manitoba Hydro is fundamentally important for another reason: it is one of the key economic development levers available to the new NDP government after making fiscally conservative election commitments, including keeping massive PC tax cuts for high income earners and the wealthy, committing to balancing the budget in its first term, and cutting the gas tax. These commitments, along with NDP health-care promises, the need to reinvest in the public sector workforce to address vacancy and retention challenges, and a softening economy, risk leaving the NDP without fiscal room to support meaningful economic development and social inclusion in the North.

An ambitious vision for Hydro is needed now.

The Manitoba government can look to Quebec’s recently announced investment and renewal strategy as an example, with up to $185 billion of new investment in generating and transmission capacity, including increased hydro generation and alternative energy projects, with an emphasis on partnerships with Indigenous communities.

While Manitoba Hydro has a mixed legacy of supporting economic development while also causing harm to Indigenous communities in Manitoba, there are opportunities for Manitoba Hydro and the government to right these wrongs in Hydro-impacted communities, as well as bringing in new First Nation partners who are increasingly interested in power infrastructure and options such as solar and geothermal.

Many Indigenous communities are looking to advance training, jobs, revenue sharing, equity, and joint venture partnerships to advance economic reconciliation. Manitoba Hydro has opened the door to partnerships on new generating capacity, and Indigenous communities deserve further engagement on what these opportunities could look like through a new Manitoba Hydro mandate.

Given the broad-ranging economic impacts, it is important to ensure Manitoba Hydro is in a position to invest in hydro and alternative energy infrastructure to meet growing demand, including greater storage capacity to manage the increased frequency of droughts and floods. Meeting Manitoba’s energy needs, while continuing to keep rates among the lowest in North America, requires a vision for growth and development and a strong commitment to public ownership and delivery, done through partnerships with First Nations, Inuit and Métis stakeholders.

Manitoba Hydro’s future leadership will need the mandate, leadership, and disposition to embrace the central role that our Crown corporation must play going forward, while rejecting the privatization and austerity that has put at risk the economic prosperity of our province.

Jesse Hajer is an assistant professor in economics and labour studies at the University of Manitoba.