Populism in action

There were many reasons for the Ontario Liberal Party's shattering defeat in last year's Provincial election, but one policy decision stands out: the partial privatization of electrical transmission utility, Hydro One.  The stage had been set for privatization more than a decade before, when Tory Premier Mike Harris broke up the venerable Ontario Hydro into its generation and transmission components.  However, it took the cash-hungry Kathleen Wynne to pull the trigger on the sale.  By the time the Liberals were booted out of office, only 47 percent of Hydro One remained in public ownership.

You might have thought that the incoming Tories under Doug Ford, with their free market bent, would have been quick to sell off the rest of the company.  Instead, Hydro One has become Ford's favourite whipping boy, even though his government no longer actually owns it.  Even before the election, Ford was railing away at Hydro One's CEO, Mayo Schmidt, dubbing him "the six-million dollar man" on account of his compensation package.

Complicating things somewhat, Mayo had been spreading himself a bit by making an offer to purchase Aventis, a power utility in the US northwest.  It's hard to imagine that Wynne had this in mind when she started selling the company off, and most of the commentary on the deal was severely negative.  In any case, as soon as Ford took office, he began the process of turfing Schmidt out.  This was accomplished quickly, though it is unlikely that the terms of his severance saved the company or the Ontario taxpayer any money.

Then things really turned nasty.  There had been plenty of opposition to the takeover on the part of US state regulators, who had to approve the deal.  Ford's impetuous sacking of Schmidt made it easy to argue that the transaction, far from being an ordinary commercial link-up, would bring power supplies in several states under foreign (Canadian) political influence.  The deal was quickly thrown out, which might have been good news from Ontario consumers' point of view, except for the small detail that it left Hydro One liable to pay Aventis a $103 million drop-dead fee.

Ford has never hinted at remorse over all this, and it's now clear that he isn't yet finished messing with Hydro One.  The company is looking for a replacement CEO, indeed has a candidate lined up, and Ford's team are interfering again.  The mooted compensation package for the new CEO is around $2.9 million, which looks like a bargain compared to Schmidt, but is way too high for Ford's liking.

The Energy Minister, Greg Rickford,  has sternly warned the company -- which, remember, the Province doesn't actually own any more -- that anything more than $1.5 million will attract the wrath of Doug.  What's more, the Province also wants to set limits on the compensation of the entire executive team and the Board of Directors.  Rickford warns solemnly that "this is not a negotiation". It seems likely that the company's senior management will walk away en masse as soon as their contracts allow, and there is little chance that the chosen candidate will take the job at half the promised salary.

A quick glance at social media reveals that this bullying of perceived fat cats is being received very positively by Ford's electoral base.  No doubt that's the whole idea.  Whether people will feel as good when the lights start to go out is a question that can be left for later.