Friday, December 07, 2018

Doug Ford is costing Ontario businesses and taxpayers money

Hydro One's proposed take-over of Washington-based energy company Avista now seems to be well and truly dead in the water. And the reason? Doug Ford.
The Washington state regulators have ruled that Ford's actions with respect to Hydro One make any involvement with Hydro One by a Washington company inadvisable, on the grounds that it too may become subject to random political interference by a loose-cannon Ontario politician: "Provincial government interference in Hydro One's affairs, the risk of which has been shown by events to be significant, could result in direct or indirect harm to Avista".
It doesn't get much plainer than that. Ford's expensive advertising campaign to convince investors that "Ontario is open for business" has been shown to be a hollow claim.  This is just dog-whistle politics taken to a new level: Ford thought he could pick up some votes by sacrificing some well-paid executive, however non-sensical such an action actually turns out to be.
When the new board finally does get around to appointing a new CEO, they will be paying at least $4 million a year for him/her, a saving of maybe $2 million a year. With the cancellation of the Avista take-over, though, Hydro One will need to pay out $103 million in termination fees, as well as $49 million in commissions to investment banks for financing a deal that is no longer going to happen, and untold millions more in legal fees. So, potential savings of $2 million a year have resulted in costs estimated at around $185 million. Duh!
Ford and Energy Minister Greg Rockford appear today unfazed by this, and are defending their decision as a good one for the Ontario taxpayer, and are convinced that electricity rates are somehow going to be reduced because of it. Back in May of this year, I was offering opinions as to why Doug Ford's obsession with ousting Hydro One's CEO Mayo Schmidt was probably a bad idea. It seemed obvious even then. Now, Ford's tunnel vision and pigheadedness has cost a private company (and, to some extent, the Ontario taxpayer) hundreds of million of dollars. And all in the misguided interests of supposedly saving those same tax payers a miniscule, and probably immeasurable, amount on their bills.

And now debt-rating agency Standard & Poor's is threatening to lowering the company's credit rating (having already lowered it once), specifically citing governance problems after the Ontario government's interference.

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