Public ownership means government involvement, not interference

Hey there, time traveller!
This article was published 23/02/2024 (614 days ago), so information in it may no longer be current.

When it comes to government-owned entities such as Manitoba Hydro, politicians and the public can’t have it both ways.

They can’t, on the one hand, demand that a utility such as Hydro remain in public hands — controlled by government for the benefit of society at large — and at the same time complain that politicians are “interfering” in its operations.

If an entity is owned and operated by government, the politicians in charge will necessarily make decisions on its behalf. They’re not “interfering” in the organization, they’re carrying out their duties as elected officials.

The Opposition Progressive Conservatives have been trying to make political hay over the firing of former Hydro CEO Jay Grewal, calling the dismissal “suspicious” and accusing the NDP government of interfering in Hydro’s operations. It may make for good political theatre, but government has every right to make changes at the executive level of any organization that falls under its authority, whether it’s a government department, a health-care agency or a Crown corporation.

They also have the authority, indeed the responsibility, to set broad policy goals for the organization and to demand – whether through an appointed board or otherwise – that the organization carry out the wishes of government. That’s how democracy works. We elect people to government and they make decisions on our behalf, including managing publicly owned entities.

The government of the day has to ensure that the boards and senior executives running the organizations they’re responsible for are aligned with their political goals.

Opposition Tory MLA Obby Khan says the firing was “political.” Of course it was. It’s government, which is run by politicians. The decisions they make are always political. There’s nothing wrong with that. It’s the nature of the beast. That’s what politicians do: they make political decisions on behalf of the public. If the public doesn’t like those decisions, they can vote them out in the next election.

There are pros and cons to having publicly owned entities. The most obvious benefit is that a publicly owned organization is required to serve the greater good of society, as opposed to the profit motives, or some other motive, of a privately owned entity. That doesn’t mean a privately owned entity can’t serve the greater good through profit-based operations. Most of our market-based economy works that way, including — for the most part — the production and distribution of food, clothing and housing. But at the end of the day, privately owned entities have a different master to serve than public ones.

In the case of Hydro, there are additional considerations in keeping it public. The cost and logistics of building multibillion-dollar generating stations, expensive converters and transmission lines doesn’t lend itself well to a competitive marketplace. There are no strong economic arguments in favour of privatizing the utility.

However, as long as it’s a publicly owned entity, it will be subject to the political whims of government. It has to be, for the same reason government would be criticized for not “interfering” in a Crown corporation if something amiss needed to be addressed.

The first thing opposition members and the public call for when controversy arises at a Crown corporation — or some other publicly owned entity — is what a minister or the premier is going to do to fix it. Suddenly it becomes acceptable for politicians to “interfere.”

Crown corporations — Hydro, Manitoba Public Insurance and Manitoba Liquor and Lotteries, as examples — operate, in theory, at “arm’s length” of government. Unlike departments headed by a minister and senior civil servants, Crown corporations are supposed to operate one or two steps outside of government.

But that’s just in theory, the kind you might read in a political science textbook. In the real world, Crown corporations aren’t much different than government departments. They may be run by boards of directors, but because board members are appointed by government and serve at the pleasure of the premier, government maintains ultimate control over the organization, as it should. They have the legislated authority to issue directives through the board.

That includes deciding who should run the organization.

There is no controversy or “suspicious” behaviour around the dismissal of Jay Grewal. It’s perfectly normal and acceptable decision-making by government.

tom.brodbeck@freepress.mb.ca