‘Expensive advice’: Tories slam new Hydro adviser

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This article was published 16/05/2024 (863 days ago), so information in it may no longer be current.

The Tories have accused the government of “hiding something” after it appointed a special adviser for Manitoba Hydro, who has criticized the Crown corporation and provincial energy policies.

For the second time this week, the April 17 appointment of Kenneth Klassen as “special adviser for hydro and energy to the department of finance” was raised in question period by Progressive Conservative finance critic Obby Khan.

Khan said Klassen is “on the record” supporting a hike in carbon taxes, raising the Manitoba gas tax, eliminating the provincial sales tax exemption on home heating and wanting to “rapidly phase out natural gas in this province.”

The Tories pointed to a presentation Klassen made in to a legislative committee in 2018 regarding the Climate and Green Plan Implementation Act. In it, Klassen extolled the benefits of ramping up energy efficiency: “It is one of the only climate change measures that we can take that has a negative cost,” as per the official record in Hansard. “It saves more than it costs. It’s not a free lunch; it’s a lunch you’re paid to eat.”

Klassen questioned why Manitoba has a low fuel tax, saying it made no sense if the province wanted to accelerate the adoption of electric vehicles. He told the all-party committee at the time that Manitoba needed to reform how it charged for gasoline.

Klassen, who has decades of work experience with provincial and federal governments and has consulted on energy efficiency strategies, legislation and regulations, told the committee the seven per cent PST exemption on home heating fuel “has bugged me for 30 years.” Natural gas — a fossil fuel — imported from Alberta to heat a home is exempt from the seven per cent tax, while the hydro electricity required to run the fan motor in a natural gas furnace is not.

“Why are we exempting from tax non-renewable fossil fuels, but efficiency measures — if I hire somebody to put a made-in Manitoba window with Manitoba labour — get taxed? We should do the reverse =… If we do institute the PST or eliminate the PST exemption on home heating fuel, we need to have appropriate protections for lower-income households.”

Klassen urged the government of the day to get Efficiency Manitoba up and running. Then-opposition leader Wab Kinew asked him if he agreed with “putting the affordability of hydro and the broader future of hydro at a very prominent place in our fight against global warming?”

Klassen said he did.

“If we’re going to eliminate natural gas eventually as a heating fuel for homes and buildings, at least in new construction, and if we’re going to convert vehicles, Manitoba Hydro has a huge role to play,” Klassen said at the time.

After dealing with that Crown corporation for 30-plus years, Klassen told the committee he didn’t think Manitoba Hydro “has the culture to embrace that kind of change.”

“They’re very supply-side oriented; they’re not demand-side oriented. I think that’s the role for Efficiency Manitoba… they can address some of these shortcomings and they’re more neutral in this, so that Manitoba Hydro should focus on its knitting… creating an abundant, affordable supply of clean hydro. Efficiency Manitoba should deal more with the things on the demand side.”

Efficiency Manitoba, which offers programs and rebates to promote energy savings, launched as a Crown corporation in 2018 under the Pallister government.

Khan called out Klassen’s lack of confidence in Manitoba Hydro’s ability to change.

“These are things he’s willing to say on the record. What is he willing to say off the record to the minister behind closed doors?” Khan said to reporters Wednesday. “Manitobans can’t afford this NDP special adviser’s expensive advice.”

Khan questioned why Klassen’s salary wasn’t included in the order in council announcing his appointment, as is the norm. The press secretary for Adrien Sala, minister responsible for Manitoba Hydro, told the Free Press the omission was an oversight, and Klassen’s annual salary is $130,000.

In the house, Sala said his department is “bringing in the talent” it needs to meet Manitoba’s energy needs “and that’s not something we need to hide from.”

In an interview Wednesday, Sala said Klassen was hired for his “broad range of expertise in energy and decarbonization.”

“We are doing the work of developing energy policy and charting a course forward to ensure we can continue to offer Manitobans access to reliable, affordable energy,” Sala said. “Mr. Klassen is well-positioned to do that.”

He dismissed the notion Klassen’s advice would be “expensive” for Manitobans.

“We have a credible path to net zero without a carbon tax,” Sala said. “Tackling climate change should not come at the expense of the working class.”

carol.sanders@freepress.mb.ca