Hydro One sell-off runs afoul of law: Union

CUPE prepared to challenge privatization in court
|labour-reporter.com|Last Updated: 04/16/2015

The partial privatization of Hydro One in Ontario runs afoul of the law, according to the Canadian Union of Public Employees.

Today Premier Kathleen Wynne announced 60 per cent of the electricity utility will be sold off to the private sector to help fund her government’s transit infrastructure plan, much to the chagrin of CUPE, which denounced the plan as “short-sighted.”

“Hydro One is a valuable public asset — something we all own together, that provides revenue to the government, and that in public hands provides stable, secure power to millions of Ontarians,” said Fred Hahn, president of the union’s Ontario faction. “Selling it would mean a loss of public control over our electricity network and significant costs for the public.”

While the sale (one of the biggest in recent government history) is expected to raise $4 billion for transit projects, $5 billion will be earmarked for paying down Hydro One’s debt.

A new legal opinion report, prepared for the union by labour law firm Sack Goldblatt Mitchell, found reasonable grounds to challenge the selling-off of Hydro One.

According to Steven Shrybman, a partner at the firm who served as counsel back in 2002 when then-premier Ernie Eves tried and failed to sell Hydro One, the government has no lawful authority under the Electricity Act to sell the utility to fund transit infrastructure.

“The exercise of a statutory discretion to privatize Hydro One could be challenged on administrative law grounds of unreasonableness or irrationality,” Shrybman said in his report. “Regardless of whether the sale itself is lawful, if the government fails to pay the net proceeds from any such sale to the Ontario Electricity Financial Corporation, it would be in breach of the explicit requirements of the Electricity Act.”

With Ontario’s budget slated to drop April 23, CUPE is calling on the Liberals to halt the sale, saying it is prepared to take the government to court.

“We hope the Wynne government will see the danger of selling our hydro transmission and distribution systems and will agree with us that it would be a mistake. We are prepared to challenge a sale in court if necessary,” Hahn added.

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