Public transit, especially in Canada’s largest city – its economic engine – has been woefully underfunded, particularly from the Province, and this has not improved under the McGuinty or the Wynne governments. Yes, there are plans for expansion – the Crosstown Eglinton LRT is in the process of being built, and there are plans for LRT’s in the city’s North West side, and a three-stop subway in the East end. But the province has consistently refused to re-instate the 50% funding for the TTC’s operations that used to be provided before the Mike Harris debacle. This remains a key reason for the continuous rise in fares and the almost constant difficulties in bringing the existing TTC operation up to snuff. With the new LRTs and subway, the cost of operations remains a key problem that will worsen.
We have two objections to the province’s Hydro privatization plans:
- There is no need to sell off a critical resource, owned by the people of Ontario, to fund transit expansion. Public transit is a social necessity that serves everyone, but in particular, middle and lower income people. It should be funded by progressive, equitable and effective forms of revenue generation, such as raising the tax rates on corporations (rates that have been lowered over the past decades), high income earners (over $250,000) and dedicated funding from gas tax revenues. Why has the Province refused to consider such funding mechanisms? Are they afraid to tell the truth to Ontarians – that in order to build and maintain the services we need, we have to pay for them? Are they afraid of the wealthy and corporate funders? The job of leaders is to lead, not pander to the most conservative elements in our province.
- Second, selling off 60% of Hydro One intensifies the destruction of the province’s capacity to oversee, manage and control the growth and development of key infrastructure needs. Like the Wynne government’s commitment to Public-Private Partnerships (P3’s) in almost every sphere of government activity and service provision, it makes public transit growth and eventually operations subordinate to the needs of profit-making organizations that inevitably undercut service, peoples’ needs and the rights of those who build, maintain and operate the services.
As the Toronto Star columnist Martin Regg-Cohn recently noted, “The...vexing question is how private profit will prevail over public purpose. As sole owner today, the government operates Hydro One in the public interest — and pockets roughly $800 million a year in profit. By contrast, the board of the partially privatized entity will have a fiduciary obligation to seek the highest profits for its new shareholders.”
How will that affect decisions to invest in and build public transit?
We have been facing a tidal wave of P3’s and outsourcing of responsibility when it comes to all kinds of infrastructure projects, particularly transit. Selling off the commanding heights of the province’s energy generation capacity, will certainly push us all further down that road.
As Paul Kahnert, a former Toronto Hydro worker and one of the leaders in the struggle to fight Hydro privatization and deregulation with CUPE Local One has recently written:
“Bill 91 completely separates Hydro One from the broader public sector. There is a clause in Bill 91 forbidding the government from buying back Hydro One. Bill 91 also creates the conditions for further privatization by removing the 33 percent tax on selling a local municipal hydro. Cash strapped municipalities will be very tempted to sell their local utilities. This legislation gives away total control to the corporations and paves the way for a tsunami of privatization.”
We don’t want Toronto’s public transit system to be next on the sales block, either.
- Third, it will waste the kind of public resources we’ll need to seriously invest in Toronto’s transit system – to keep up the TTC operations, radically improve their reliability and availability, or their affordability. The Auditor General noted an 8 billion dollar waste through P3’s; key P3 infrastructure project have been undermined by P3’s, from hospitals to transit maintenance projects.
The sale of these shares of Hydro one would end up costing the province more than it would gain in revenues – they hurt the cause of public transit which requires massive and ongoing funding. As a recent report written for CUPE has noted:
“We believe that the sale of 60% of Hydro One could save the Province of Ontario $172.3 million in interest costs if proceeds were used to reduce long-term debt. However, it would cost the Province of Ontario $511.1 million in lost revenue from earnings of Hydro One that would go to the new investors. Thus the net loss of income to the Province of Ontario would be $338.8 million per year.”
For these reasons, TTCriders would like to make it clear that in the interest of public transit users in Toronto, we want the Hydro One sell off to stop. Fund public transit operations and funding through progressive and equitable forms of taxation.
References:
1) Martin Regg-Cohn, “Why Kathleen Wynne’s Hydro One sell-off is a sellout”, Toronto Star, May 18, 2015.
2) Paul Kahnert, “Bill 91 contradicts Premier Wynne’s Hydro One promises to protect Ontarians”, May 15, 2015, Hamilton Spectator.
3) Dr. David W. Peters and Dr. Douglas D. Peters, prepared for CUPE, “Why the Province of Ontario Should not sell part of Hydro One”, May 2015.
4) John Loxley, “Wrong Turn: is a P3 the best way to expand Edmonton’s LRT?”, Parkland Institute, October 2013.
5) Janine Booth, Plundering London Underground: New Labour, private capital and public service, 1997-2010, Merlin Press, 2013.
