A billion here, a billion there, and pretty soon we’re talking real money. That’s the spirit in which Premier Kathleen Wynne’s blue-ribbon panel to squeeze more cash out of government assets has tackled its task. With commendable speed, the panel has come up with credible ideas short of pawning the family silver.
On Friday TD Bank chair Ed Clark and his Advisory Council on Government Assets unveiled its “measured, pragmatic” blueprint for leveraging between $2 billion and $3 billion back into the cash-strapped treasury.
The Liquor Control Board of Ontario, Ontario Power Generation and Hydro One should all remain in public hands, the panel says. They are all valuable revenue-generators. But Hydro One Brampton and Hydro One Networks’ distribution business should be sold, raising money that could be reinvested in transit and transportation infrastructure. That would boost Ontario’s economy and revenue without driving up the deficit or debt.
This cautious approach won’t spare Finance Minister Charles Sousa a headache as he tries to rein in a $12.5-billion deficit in the spring budget. But it gets him closer to where he needs to be without holding the fire sale that some unwisely advocate.
The panel also recommends tweaking the LCBO to bring in more revenue. It would be modernized and expanded to include big-box superstores, niche boutiques and the sale of 12-packs of beer. The LCBO would also use its purchasing power to get better prices from suppliers, and pass the expanded profits on to the government. Similarly, the panel would squeeze the Beer Store’s owners to pay more for their near-monopoly.
The Star would have liked to see Queen’s Park let corner stores sell wine and beer. But the panel worries that could lead to retailer pressure on the government to lower its tax rates, in order to maintain healthy retail margins in a more competitive market. That would hit government revenues. Modest as they are, the proposed changes would at least give the customer more convenience and choice and push the LCBO and Beer Store to be more innovative.
The panel also urged that OPG be split internally into two entities — one focusing on the Darlington nuclear station, the other on hydro/thermal power — to eke out a few more efficiencies.
In its work the panel operated under tight constraints. They included minimizing political, consumer or labour backlash. The government’s refusal to hold a fire sale. And the need to protect the dividends the assets generate that fund health care and education. Under the circumstances, a few billion would be a decent return.