Ontario Liberals have never liked public hydro.

The Ontario Liberal Party has never done a great job with the hydro file.  In fact, since Confederation, the party has mostly opposed public power in Ontario or has done its best to curtail its reach.  Premier Wynne’s present plan to privatize Hydro One is just the latest in a series of lackluster Liberal approaches to power policy.

Until the 1980’s, the Liberals in Ontario were often more conservative than the Progressive Conservatives (PC), who actually were quite progressive (they had a minority government from 1975 to 1981 that was kept alive by the New Democrats).  It was the conservatives who created Ontario Hydro in 1906.  The Liberals had governed previously and opposed the extensive plan for a provincial utility composed of member municipalities that Adam Beck and other southwestern Ontario mayors and industrialists were lobbying for.  The Liberals under Premier George Ross wanted to keep power generation at Niagara Falls.  They cared little that the ownership of the three generating stations that had been developed on the Canadian side of the falls was American and that those owners were primarily concerned with sending the power generated back across the river to the US.  The best plan the Ross Liberals would offer was a provincial commission that would supply power to member municipalities from private generation sources over privately-owned transmission lines.  It was essentially an early Twentieth Century version of today’s Liberal-created Ontario Power Authority, the provincial agency that coordinates both privately and publicly owned generation and then sources it to local utilities using publicly or privately owned lines.  The Liberals of the late 19^th and early 20^th centuries were more like today’s conservatives, government involvement in the economy was to be kept minimal to non-existent.  International trade, particularly free-trade was also a major part of Liberal policy, hence the Ross government’s tolerance for the American power companies producing electricity in Canada for use in the United States.  It was the federal Liberals under Sir Wilfrid Laurier who even introduced the first regulatory mechanism to allow for Canadian electricity to be exported to the US.  Aside from John Turner campaigning against it in 1988, the Liberals have always been a free trade party that took a continentalist approach to relations with the US.

During the 1930’s, the Ontario Liberals again botched the Hydro situation.  After taking office, Premier Mitchell “Mitch” Hepburn went after Ontario Hydro and its supply contracts with several private power companies in Quebec.  Ontario had not developed its own generation capacity enough at the time so it built transmission lines to the Quebec boundary and purchased electricity from four different power companies in the Outaouais and Montreal regions.  Hydro-Quebec did not exist yet.  Hepburn argued that the prices in the contracts were excessive and sending Ontario Hydro on a fast track to bankruptcy.  He also argued the contracts were awarded by the formerly governing Conservatives in return for campaign donations.  The ringmaster-like Hepburn and his Attorney-General Arthur Roebuck took the message to the public through the newspapers and even a series of talks broadcast on radio station CFRB in Toronto.  Legislation was passed after a 24 hour debate that voided the contracts.  Then the Liberals got caught.  The cancelling of the contracts was declared illegal and Ontario was forced to negotiate new ones with the Quebec companies.  An attempt at short-term political gain blew up in the government’s face.

The Progressive Conservatives governed Ontario from 1943 to 1985.  This was a period of tremendous economic growth and social development in the province.  As stated earlier, the PC’s were cleverly perceptive and adapted to the changing society by actually doing things that would be considered socialist by today’s Tories.  The Liberals during these years, who struggled to compose themselves as a relevant parliamentary opposition and electoral alternative, often played to the right.  Press releases and newspaper clippings from the 1970’s and early 1980’s criticize Ontario Hydro as wasteful, bureaucratic, and excessive.  A simple change to the dates on the press releases to 1996 or 1997 could have allowed Mike Harris to reuse them, but their tone indicates that the Liberals were no friends of Ontario Hydro.  Their dislike for a complete, vertically integrated public utility became more apparent once they again formed the government from 1987 to 1990.  In an embrace of the trend towards deregulation and disintegration that began in the 1980’s, the Ontario Liberals began an effort to seek power generation from non-utility, for-profit sources, neither of which was Ontario Hydro or municipal utility.

After the years of the anti-state Mike Harris wrecking crew in Ontario, the Liberals again returned to office in 2003.  Under Dalton McGuinty, they showed no respect for public utilities or the public good they serve.  Ontario Hydro had been taken apart by this time.  The Liberals could have reassembled it, but they didn’t.  Instead they made the situation worse through subsidizing the so-called “green energy” scheme.  Power rates in Ontario are awful now because customers are subsidizing big corporations with their wind turbine developments or acres of solar panels covering land that should instead be used to grow crops or pasture livestock.  If the Ontario Liberals were really supporters of publicly owned power utilities, they would have ended the Harris-enabled practice of letting big energy companies develop new natural gas generating stations.  The so-called gas plant scandal from the 2011 provincial election could have been entirely avoided if the government had backed away from the murky practice of partnering with private corporations to provide a public service.  

Now the Liberal government under Wynne is desperate for money so they plan to privatize Hydro One, the transmission and distribution chunk of the Ontario Hydro ash can.  It is another exercise in political expedience on par with Hepburn’s attack on the Quebec contracts in the 1930’s.  The sale of a crucial public asset will bring short-term financial relief for the government while shareholders of the newly private Hydro One will be the real ones who benefit.  Rates will go up to boost profits and dividends, while still subsidizing fields of solar panels and wind turbines.  Wynne says the Hydro money will go to infrastructure, which really means public transport for the Greater Toronto Area, where most of the population and the Liberal electoral base resides.  Hydro One does not even serve that region of the province.  Its service areas are primarily rural places and small villages.  These communities are going to lose ownership of a public service in order to provide more subways and streetcars for Toronto.  How fair is that?  It does however prove that the Ontario Liberals have never been committed to public power.