Pallister takes dangerous course with Hydro stance

Hey there, time traveller!
This article was published 28/03/2018 (2777 days ago), so information in it may no longer be current.

Last week, nine appointees to Manitoba Hydro’s board resigned. Every one had been appointed by Premier Brian Pallister.

The board members made it crystal clear why they were resigning: because the premier refused to meet with them to discuss critical issues of governance, finance and Indigenous relations.

Pallister deliberately has chosen to attack his own appointees and kick a hornet’s nest of racial division as a distraction from the far more serious risk to Hydro and Manitoba as a whole — his government’s ongoing looting of Hydro.

To put it in perspective: last year alone, Pallister’s government took $410 million from Hydro through taxes and fees:

• $160 million: debt-guarantee fee;

• $131 million: water-rental fees;

• $119 million: capital taxes, payroll taxes, property taxes.

These numbers will continue to increase on a yearly basis as Hydro’s debt continues to grow. If the province keeps going down this path, that number could balloon to more than $600 million by 2024 when Bipole and Keeyask come online.

It is hard to understate how irresponsible and reckless this has been.

The province owns Hydro and is responsible for its debt. If Hydro defaults, the provincial government is responsible for its debt — which is expected to increase to $25 billion over the next three to four years.

Hydro has $2 billion in revenues and has to ask the government for new investment, or for the Public Utilities Board to raise prices. The provincial government has $16 billion in revenues, gets billions from the federal government and can levy taxes in a $60-billion provincial economy.

It should go without saying that if asked to come up with $16 billion on short notice, neither Hydro nor the provincial government will be able to do so. But when it comes to the ability to handle debt, the province is able to borrow much more safely and pay it back over years in a way that is far safer.

This is the financial crisis the board of Hydro has been trying to meet with the premier to discuss, and that he has ignored. This is gross negligence.

This is why Manitoba Liberals have said addressing Hydro’s finances is the single most important thing the Pallister government must address, because unless it is addressed, it is putting the province’s finances at risk.

The reason Manitobans now are going to face multiple year-over-year rate hikes is not because of cost overruns on dams, but because Hydro is dangerously low on cash on hand.

The 7.9-per cent increases may seem affordable, but when compounded they add up to 65 per cent. Manitobans with a $100 Hydro bill will face a bill of $165 in five years.

That is the premium on electricity that Manitobans will have to pay because the PCs and NDP have been padding their books with Hydro debt. The hike is a hidden tax that is going to increase the cost of living and the cost of doing business. It will especially affect people living in northern and rural areas.

For the premier to refuse to meet with Hydro’s board is impossible to explain. For him to suggest that his own appointees were acting in anything but the best interests of Manitoba and its citizens is an insult. For him to inflame racial tensions is reckless.

For the premier to ignore warnings and allow massive rate hikes and debt that could break Hydro is irresponsible. There are some who see this as a scheme to privatize Hydro. The reality is that the situation is much worse: Hydro could go bankrupt, and it could bankrupt the province as a whole.

That is the message that the board of Hydro were trying to get across and that the premier refused to hear. If the premier and his caucus don’t understand how serious the situation is, every other Manitoban deserves to.

Dougald Lamont is the leader of the Manitoba Liberal Party.