The sun rises behind a hydro tower dotted with workers ED KAISER/Postmedia Network Files
NDP leader Wab Kinew recognizes the financial albatross hung around Hydro ratepayers’ necks. The albatross is the result of past policies of his party (first, Gary Doer, then Greg Selinger), then continued by the current Pallister PC government.
Doer and then Selinger’s Hydro gong show was aided and abetted by the then-NDP-appointed Hydro board of directors and the then- President Bob Brennan; Pallister completed the foolish misadventure with the help of his Hydro board, a new president (three so far under Pallister), and a U.S. consultant.
The albatross, a symbol of disaster ahead, is Hydro’s money-losing expansion. Both the PCs and the NDP are ignoring it, hoping the electorate does too.
Surprisingly and foolishly, Kinew has reopened the Hydro “can of worms,” making things even worse. He offers a Hydro-oriented election promise involving the federal carbon tax. Never mind that it will be gone if Scheer’s Conservatives win the federal election. Some background is needed. The Hydro expansion, the Wuskwatim and Keeyask dams and Bipole III transmission line, when fully operative, will drive Hydro’s debt up to over $25 billion while raising the province’s overall debt to $55 billion! Incredibly this is five times the debt level when the NDP started its 16-year reign as government in late 1999. Imagine the economic carnage if interest rates rise to the normal level for a 2% inflation rate.
Kinew, if elected, would use the annual proceeds of the federal government’s mandatory carbon tax to paper over the mess by calming ratepayers through refunds to offset Hydro’s monthly bills as major Hydro rate increases begin to bite. Kinew promises an annual $350 “rebate” to every Hydro “customer,” all 580,000 of them. So, when Hydro bills eventually begin the steep climb ever upward, his carbon tax rebate would mask the impact on households of the rising cost of Hydro’s bills.
Kinew’s scheme actually acknowledges the reality — so far, Pallister’s government remains in denial — that Hydro’s rates will have to soar when the construction phase of the expansion is finished.
Hydro monthly bills, a Kinew government would still cash in on the enormous and real levies on Hydro that flows (now approaching $500 million every year and poised to begin increasing even more rapidly) to the provincial government’s treasury. This is money ripped out of Hydro ratepayers’ pockets, a “gift” to the government helped by the cost of the expansion.
Kinew’s card-shuffle effort to cover rising Hydro bills by federal carbon tax revenue adds to the biggest boondoggle Manitoba has ever suffered. Neither the NDP nor the PCs should be able to escape their joint culpability for an unduly costly expansion to serve an unprofitable export market. Both parties’ fingerprints are all over it.
An independent inquiry needs to be held — like utility reviews going on in B.C. and Newfoundland Labrador. And, ahead of the review, Kinew and Pallister each should promise, if elected, to recapitalize Hydro, as suggested by former Hydro Chair Sandy Riley — both by moving billions of Hydro debt off ratepayers’ backs and by reducing government levies on Hydro.
As for Kinew’s half-baked scheme, strike three.
Graham Lane is a retired CPA, he served as PUB’s Chair from 2004 to 2012.