Tories claim stranded debt payment now tax grab

by ELLWOOD SHREVE,
Chatham Daily News

Ontario Progressive Conservatives are calling for a forensic audit of the stranded debt from Ontario Hydro after learning payments by taxpayers are being extended by six years.

Simcoe-Grey MPP Jim Wilson, former energy minister under the Mike Harris PC government, spoke about this issue with members of the media Thursday at the transformer station on Maple Leaf Drive in Chatham.

He said the debt repayment for ratepayers was scheduled to be finished by 2012, but the Liberal government has quietly extended the payments to 2018, at $1 billion annually for the extra six years.

Wilson said the Tories discovered in a November report from the Ontario Electricity Financial Corporation — which he said he created to manage repaying the stranded debt — showing taxpayers have already paid $7.8 billion “so there’s no reason to continue the charge.”

He said the government is claiming there is “a whole pile of interest, which they can’t justify.”

Wilson questioned the validity of that claim, noting the government is in the lowest interest rate market seen since the Second World War.

“But we think taxpayers have been paying more than $7.8 billion, but we don’t know the bottom of that,” he said.

“We think, in sneaky way, Mr. McGuinty is trying to make this into a permanent tax grab,” Wilson added.

However, Wilson’s numbers don’t jive with figures provided by Chatham-Kent Essex MPP Pat Hoy.

An e-mail from Hoy, who is travelling across Ontario as chair of a public budget consultation process, said the debt retirement charge was slapped on Ontario energy bills in 1999 under the ruling Tory government, which failed to restructure the electricity sector.

Hoy claims the stranded debt rose by $1 billion under Tory rule from 1999-2003 to $20.5 billion from $19.5 billion.

He said the stranded debt is currently $5.7 billion lower than it was in 2003.

Hoy added, to date, $7.8 billion has been collected under the debt retirement charge with $5.7 billion used to pay down the principal.

He said the balance of $2.1 billion has gone towards a number of other costs, including interest on debt and covering the cost of a rate freeze by the Tories, which he added cost more than $1 billion as a result of that government’s failed experiment with deregulation.

Wilson said when Ontario Hydro was dismantled after going bankrupt, the total $34 billion debt was shared between newly created companies Ontario Power Generation and Hydro One.
He said $7.8 billion was left over for the public to pay, noting an identifiable charge was put on hydro bills, which goes directly to paying off the stranded debt.

Wilson said the Tories believe the government wants to generate extra revenue by keeping the debt payments going to help subsidize its green energy plan, citing the lack of details surrounding a $7-billion contract with the Samsung Corporation to provide wind energy in Ontario.

Wilson said wind energy proposals were brought to him 15 years ago when he was energy minister, but he wasn’t interested.

“I didn’t see the jobs in it,” he said, adding the plan called for paying people to put up turbines “at a price we couldn’t afford and (structures) communities didn’t want.”

Wilson said the idea was popular with people in downtown Toronto who didn’t have to put up with the turbines.

“Now they’re figuring out, ‘Oh, but we do have to pay for them.’ “