The minister in charge of Manitoba Hydro has denied any part of the publicly owned "crown jewel" will be privatized even though his government has directed the utility to implement measures in the Wall report, including selling non-core assets.
"Privatization is not on the table," Crown Services Minister Jeff Wharton said Friday after question period, where the NDP had asked him about a "secret" ministerial directive mentioned in a Sept. 29 Manitoba Hydro letter to the Public Utilities Board.
"They've repeated that line throughout, then they pursue partial privatization," NDP Leader Wab Kinew said, referring to Teshmont, a subsidiary that Manitoba Hydro had an interest in that was sold. "This directive turns that from being a little bit of political spin and misdirection to that being the official government policy," he said in a phone interview.
Hydro said in the letter that it had received a directive from the PC government in May "to implement the 51 recommendations in the Economic Review of Bipole III and Keeyask report" issued by former Saskatchewan premier Brad Wall in February. "The implications of this directive will be understood, including cost implications, over the next 12 months," it said.
The Wall report lambasted Manitoba's former NDP government, saying it mishandled and overspent on construction of the two massive capital projects. It recommended selling off, or shutting down, non-core hydro assets to relieve the debt burden sooner, public-private partnerships for any future capital projects, and a review of transmission tariffs "to ensure that they are not a barrier to other companies building new generation in Manitoba for export" to "foster competition."
His report also said the province shouldn't charge Hydro hundreds of millions of dollars every year for water rental when government decisions are to blame for it being so deeply in debt.
Wharton said there was nothing "secret" about the province telling Hydro to adopt the Wall report. Former premier Brian Pallister announced months ago the recommendations would be enacted and, in May, Wharton announced a three-person panel to review all 51 of them and report back by the fall of 2022.
On Friday, Wharton wouldn't say what are considered Hydro's non-core assets and potentially on the chopping block.
"We'll review and go through that process with Manitoba Hydro... but to determine core and non-core is early stages for us."
He repeated that no part of the utility — not Centra Gas, nor any customer-service functions — would be privatized. "There's not going to be privatization on anything."
When asked if the province would follow Wall's recommendation to reduce the water rental fees it collects from Hydro — $480 million this fiscal year for a surcharge on the water that flows through generating stations, debt guarantees and capital tax — to reduce the utility's debt burden, Wharton said it will be discussed.
"Manitoba Hydro's financial status is not good, especially this year, losing in excess of $300 million," he said referring to the Crown corporation's latest fiscal update that accounts for drought conditions.
"That's going to be exacerbated by the fact that now they're going to have to start to pay for the capital assets of Bipole and Keeyask. It's going to get worse before it gets better."
While the government has focused on the utility's massive debt, when pressed, Wharton acknowledged the massive producer of hydroelectric energy remains "Manitoba's crown jewel."
Manitoba Hydro, he said, has been encouraged to explore new foreign and domestic contracts.
The negative narrative from the PC government about Hydro sinking in debt sounds like a prelude to privatizing it piece by piece, Kinew said, and that would result in rising energy rates for customers and fewer good-paying jobs.
"Privatization of any form, to me, is a big concern," he said.
After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.