The cash-strapped Ontario government is taking further steps toward the selling off of assets as recommended by Premier Kathleen Wynne’s privatization czar Ed Clark.
Clark, the former TD Bank chair, leads a blue-ribbon panel examining ways to find money for an administration struggling with a $12.5 billion budget deficit.
On Friday, his advisory council on government assets announced it is “now interested in receiving written ideas related to encouraging consolidation and Hydro One Brampton and the distribution business within Hydro One Networks.”
Alan Hibben, a retired RBC Capital Markets senior investment banker, has volunteered to work with Clark’s council to ensure the utilities fetch a decent price from potential buyers.
Clark has said liquidating Hydro One Brampton and Hydro One Networks’ distribution arm, which are parts of Hydro One, the provincial transmission company, would bring in between $2 billion and $3 billion in one-time money.
That windfall would go toward Wynne’s pledge to build $29 billion of transit and transportation infrastructure over the next decade — $15 billion for the Greater Toronto and Hamilton Area and $14 billion for the rest of Ontario.
Along with selling the hydro assets, Clark’s panel urged a revamp of booze sales in Ontario.
While cautioning against selling off the Liquor Control Board of Ontario, the council said the privately owned Beer Store monopoly should be forced to pay a “franchise fee” to the province.
If the parent companies of Labatt, Molson, and Sleeman, which own the 448-outlet beer retailer, balk — or try to hike prices to cover that fee — then the government has threatened to take away the monopoly.
“Their position is that they can’t afford to absorb a tax,” Clark said last month.
“If we do decide to charge a franchise fee of some sort (and they say) they don’t have any room, they’re just right up against the wall here and they don’t have a dollar to give . . . we’re saying, ‘Well, then that means you’re really saying is that this franchise that you have is worthless. Would you then give it up?’” said Clark.
“And then they say they don’t want to, but they don’t want to pay for it. We don’t think that’s a reasonable position. If you really think this thing is valueless, then give it up and we’ll auction it off and see if people would pay something for it.”
Canada’s National Brewers, which operates the Beer Store, has argued that such a levy is unaffordable.