Approximately 80% of Ontario’s multibillion-dollar electricity sector is publicly owned. Its legal structure, however, does not clearly reflect that ownership structure. Twelve years ago, Ontario’s “power at cost” crown corporations were reconstituted as “business corporations” that just happened to be publicly owned. The legislation’s logic was unambiguous: facilitate their evolution from creatures of government to fullfledged commercial enterprises, motivated by commercial objectives and, presumably, rewarding commercial shareholders.
That logical inference proved to have frail political will. So, today, the government of Ontario and some eighty municipalities are “sole shareholders” of most of the province’s electrical utilities. Operating between two paradigms has been confusing but has not paralyzed decision-making in the industry. However, conflict about the nature of these utilities is emerging and eventually will force Ontario’s political leaders to get on with privatization or formally restore the legal and business culture of authentic, not-for-profit crown corporations.
On Monday, the New Democratic leader, Andrea Horwath, revealed that numerous municipal electric utilities were buying tables at Liberal Party fundraising dinners. (Oakville Hydro gave the Liberals $8,500 in 2009 and $7,000 in 2008.) She objected to the practice, while Energy Minister Brad Duguid and Progressive Conservative leader Tim Hudak demurred.
The real issue isn’t one of fundraising transparency or customer impacts but whether public bodies, no matter their legal conceits, should in any way be in the business of funding government and opposition political parties? Can there be a safe, fair way for public bodies to make donations to political parties?
Surely, the answer is no to both. These utilities are not like commercial natural gas companies that are regulated by an independent nonpartisan regulator. Their boards, their business plans and the tenure of their CEOs are directly influenced by the Minister of Energy, who (if he’s doing his job!) is a full-time politician.
Of course, there are good governance and good economic arguments for selling these public utilities to the marketplace. However, if politicians want to continue to own them, then they should get back to treating them like public organizations.
The managers of these public institutions should not be put in the position of deciding whether or not it is in their organization’s interest to give money to a political party. Citizens should be assured that organizations under the direct influence of a minister—whether, an electrical utility, a ministry of government, or a scheduled government agency—will not be approached by or allowed to support political parties.