Mayor John Tory is powering up a debate over the potential privatization of Toronto’s century-old electricity provider, which he says is necessary to help fund city-building projects and upgrade the electricity grid.
“We have an obligation to look at all the options including unlocking the value that already exists in Toronto Hydro, while keeping it in public hands,” Tory said in a speech to the Toronto Region Board of Trade.
Tory told the business audience there have been “too many stories” recently of power failures in some of the big new condo towers, often due to aging infrastructure. The city not only has to keep the lights on now but provide power to a rapidly growing city of the future, he said.
Council must also find new revenue streams to pay for billions of dollars in unfunded projects, including a massive transit network expansion, poverty reduction strategy, and public housing renewal plans.
“We must … identify a way to pay for large-scale projects that are urgently needed,” he said.
At a news conference following the speech, Tory held up a photo of the giant cable that burst in the hot summer weather, saying it caused power outages in a massive downtown condo complex, CityPlace.
Tory said there are only three ways to pay for upgrades needed by the utility: raise property taxes then inject the money into the utility, forgo money the city collects from the annual dividend, leaving the cash-strapped city with a fiscal gap, or tap into the value of Toronto Hydro and “use that money to do what they must do.”
Toronto Hydro paid a $56 million dividend to the city in 2015.
Tory declined to say how much of the utility might be sold, subject to a majority of Toronto’s 44 councillors going along with the plan.
Asked about polls showing a majority of Ontarians oppose the province selling Hydro One, Tory said “we’ll be obviously trying to do it in a way that maintains the public confidence.” The Liberal government is planning to eventually sell off 60 per cent of Hydro One.
The Society of Energy Professionals said in a news release that selling any part of Toronto’s electricity system is “sheer madness.” The union represents 8,000 Ontario energy sector employees, including Toronto Hydro engineers.
“Privatization is not a solution to poor fiscal policy, under investment in infrastructure or increasing hydro bills. Privatization makes all three of those problems worse,” union president Scott Travers said in the release.
The union has launched a website, FairHydro.ca, urging the public to tell the mayor and council “why hydro privatization is a dangerous idea.”
Tory noted that city council has also directed staff to look at selling parking and real estate assets, in addition to reviewing, and recommending, a number of revenue generating measures, such as imposing road tolls or a parking tax.
City staff reports on proposed asset sales, taxes and levies are expected this fall.