Selling Off Crown Assets in Ontario: Any Taxpayer Benefits?

Interesting article in the Globe and Mail online (Ontario ponders sale of Crown corporations to beat down deficit by Andrew Willis and Boyd Erman; December 15, 2009).  It seems that the Ontario Government, in an attempt to tackle their multi-billion dollar deficit, is looking at various crown corporations as possible salable assets.  Logic is, if I understand correctly, that they can sell off these businesses for money which can then be used to pay down the massive debt.

One of the key assets on the table is Hydro One.  You know, that company which provides electricity and — for many Ontarians — heat; a necessity in this the Great White North.  That company to whom we all pay a “debt reduction charge” each month, above and beyond our usage rate, in order to help them with their debt load.  (Author’s note: if only I could convince province residents to help pay down MY debt load!)

So here is what I want to know.  If the Ontario government sells off Hydro One to private investors, do those private investors then take on that debt which Ontario taxpayers are currently on the hook for?  Will that charge come off of our bills immediately?  Will our hydro rates rise commensurately with the theoretical removal of the debt retirement fee?  How will rates be regulated moving forward — or will they be?

The other crown corporations concern me less, to be honest — I just don’t see the Ontario Lotto and Gaming Corporation (OLG) or the LCBO as fundamental necessities.  The fact that they do provide revenue to the Ontario Government coffers does, however, make me wonder whether a one-time sale can make up for ongoing revenue.  If these crown corporations are profitable, does it not make sense to keep them on as a long-term investment with guaranteed base revenue?  What happens if Ontario sells off these assets in a one-time bid to reduce overall debt, but then finds itself unable to respond financially the next time it finds itself in the hole?  Higher taxes yet again?

Bottom line: I’m concerned.

Read the original article in the Globe and Mail online here.

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