Hydro Won’t Be Privatized, But Maybe it Should: “Small Manitoba” model dominates policy

Commentary, Energy, Joseph Quesnel, Uncategorized

The privatization bogeyman is out scaring people again in Manitoba.

The Canadian Union of Public Employees (CUPE) is raising this issue in a slick advertising campaign, suggesting the wily Progressive Conservatives would sell Manitoba Hydro as soon as they are elected. The unions have a clear policy position on Manitoba Hydro which happens to be shared by many Manitobans, so they want to keep it that way.

This is really quite the red herring.

The complicating factor in all this is any movement on the file by the Tories is highly unlikely given the Conservative’s inconsistent record on government ownership.

The NDP and its union allies like to remind voters about the privatization of MTS during the Filmon years. However, don’t forget the same government was behind Manitoba Hydro acquiring Centra Gas — converting a private company into a Crown. So the PCs have a “nationalization” on their belt that the NDP would never have done.

Lest we also forget all the assurances Conservative Leader Hugh McFadyen made last election over this very issue. He proposed a very bad idea — bringing in legislation requiring the consent of all MLAs in Manitoba before making any changes to Hydro ownership.

Quite the overkill, but it reminds us how the PCs here know the issue is toxic at the present time and were quite willing to take it right off the table for any consideration, let alone discussion or debate.

The plain fact is Manitoba is not ready for a policy now routinely implemented by socialist governments around the world.

Propaganda and old time union folklore still pervade Manitoba’s political culture. Before people buy into speculation about “secret agendas,” it would be important to sit back, relax and think the issue over.

A 2007 Frontier Centre study examined what happened when Manitoba’s telephone company was converted into a shareholder-owned company. It was compared to SaskTel, a relatively similar company which is now the only government-owned telecom company remaining in North America.

Ten years after the sale, MTS was earning twice the revenue. It also had 20% more jobs and was paying out hundreds of millions of dollars in additional taxes (remember, Crown corporations don’t pay income tax — talk about big corporations not paying their fair share!).

All this, yet the prices for MTS services remain similar to those of SaskTel.

In fact, MTS today is larger, richer, and has more jobs because it can operate on a national scale and access equity capital.

If Manitoba Hydro were afforded the opportunity given MTS, it would also grow. It’s not hard to imagine it expanding and dominating the mid-western American market by purchasing U.S. power companies and their valuable transmission lines. It would pay taxes, create more jobs, and allow Manitoba to pay off its provincial debt.

Think of the other taxes that could be reduced or even eliminated.

Somehow this is all scary stuff to our political classes.

For now, old time Crown corporation ideology and the “small Manitoba model” rules the Keystone Province.

This debate and the political leadership needed to explore it properly has not started.