In her first appearance before an all-party government committee, the head of Manitoba Hydro was asked to explain why the publicly owned utility obeyed the Pallister government’s pandemic-response directive to cut wage costs, when none of the savings will go directly towards the front-line costs of the pandemic.
Every member of government was asked to step forward and do their part," Hydro president and chief executive officer Jay Grewal told the Crown Services committee Thursday. "That’s what we did.
Grewal was referring to Treasury Board documents asking all government departments to find from 10 and 30 per cent in savings to help the province fund the costs associated with the COVID-19 pandemic.
Hydro was at first told it needed to find 700 temporary layoffs — something Grewal said Thursday she never wanted to do. The government later lowered its cost-cutting target, and Hydro arrived at a deal in which some of its unions agreed workers would take three days of unpaid leave.
Other local unions — including the International Brotherhood of Electrical Workers and Unifor — declined to accept the offer. More than 200 workers are to be temporarily laid off, starting in the fall.
It was the first time officials from Manitoba Hydro had appeared before the legislative committee in two years.
Grewal was asked about the Crown corporation’s financial shape, following the October 2019 ice storm that cut service to tens of thousands, and the 2020 coronavirus pandemic, which has resulted in residential hydro use soaring (as people worked from home) and commercial sales dropping.
Grewal told the committee Hydro is still forecasting a $47-million profit this year, and the temporary layoffs will result in some projects being deferred, but service to customers won’t be affected.
We are more agile now than we’ve ever been.
Asked by NDP Leader Wab Kinew about the wage-cost reductions — after the Crown corporation had undergone substantial cuts two years ago — Grewal said although there was no government order to do so, it was doing its part.
Kinew, however, challenged the Tory government’s directive and its motives.
"Why is government weakening the Crown corporation and laying people off when it’s making money?" Kinew asked at the committee meeting.
Why is the government demanding these things during a recession of a Crown corporation that has a tremendous role to play?
Successive Progressive Conservative and NDP governments have used Manitoba Hydro as a "piggy bank" and have no business telling it what to do, said Liberal Leader Dougald Lamont.
"They’ve been bleeding Hydro dry for the last 20 years, and they’ve been taking $400 million out of it every year," Lamont said after the committee meeting.
Hydro is supposed to be independent from the government, and the utility’s board shouldn’t follow Premier Brian Pallister’s orders, Lamont said.
There’s tons of work to do," he said. "I have not heard a single justification for this. All I’ve heard is the premier say, ‘We need you to cut.’ And Hydro says, ‘How high?’
When asked why the utility imposed the COVID-19 response reductions when none of the money saved is going to the front lines of the pandemic, and Hydro is on track to make a profit of $47 million, board chairwoman Marina James said the cuts will affect Manitoba’s bottom line.
"Although there is no ‘cash’ transfer, it is in effect still a benefit by providing government with additional room to finance needed expenditures related to provincial COVID-19 response," James said in an email.
Every dollar we save provides government with additional room to borrow to fund their response to the COVID-19 pandemic.