Hydro One sell-off the ‘biggest con job I’ve ever seen’
A convicted white-collar criminal explains why Ontarians should be outraged by Queen’s Park’s proposed sale of its stake in Hydro One.
CHRIS SO / TORONTO STAR Order this photo
Hydro One’s profits have grown 6.3 per cent per year for the last 14 years.
As a convicted white-collar criminal, Queen’s Park proposed sale of a majority stake in Hydro One has sparked my interest. The proposal on the table is a con job of astronomical magnitude.
Why is this a bad deal?
Because it is a bad price.
Investment people — like the people who have agreed to help Queen’s Park unload its majority stake in Hydro One — value companies based upon a couple of different factors. Sometimes the value of a company is based on the value of its assets: land, factories, intellectual property, and brand name recognition. The thinking being that better management of those assets might generate higher profits. Sometimes the value of a company is based on its profitability. A stable stream of income is worth paying good money for. Some companies are valued on their assets, others are valued on their earnings; sometimes it’s a little of both.
Hydro One is a stable generator of profits. It has been profitable since it was created out of the breakup of Ontario Hydro. Its profits have grown 6.3 per cent per year for the last 14 years. It reported earnings of $749 million for 2014 — all of which belong to the people of Ontario. You and me.
Now, we all know that the province is in debt. $284 billion. That’s the bad news. The good news is that investors love to buy government bonds. Investors are so eager to buy Ontario bonds that they compete as to who will accept the lowest interest rate. In March, bond investors lent Ontario money for 10 years at a rate of 2.1 per cent. Our average interest rate on all our existing debt is only 3.8 per cent (and falling).
So, we have some numbers to work with: 1) Hydro One earns $749 million. 2) The province pays, on average, a 3.8-per-cent interest rate on its outstanding debt and 3) the province can borrow new money at rates as low as 2.1 per cent for 10 years. So here’s the question: how much should we, as Ontarians, receive for selling this $749-million income stream?
One way to calculate it is to say that $749 million pays all of the interest on $20 billion in existing government debt at a rate of 3.8 per cent. So, to accept anything less than $20 billion in cash is a bad deal.
Another way is to say that $749 million will pay all of the interest on $36 billion of new government debt at a rate of 2.1 per cent. So, to accept anything less than $36 billion in cash is a bad deal.
The number that doesn’t make sense is $15 billion. That’s the value that the premier has put on Hydro One. (If 60 per cent is worth $9 billion then 100 per cent is worth $15 billion). That is the number that Bay Street has convinced the Premier to accept for selling a profitable and growing business that earns $749 million with an earnings growth rate in excess of 6 per cent.
Why is she doing this?
I don’t know. But I can tell you why Bay Street is pushing this deal.
Greed. In addition to buying a blue-chip electricity monopoly at a rock-bottom price they hope to make money by “underwriting” the deal. They intend to charge us a fee for selling our Hydro One to themselves at a terrible price. And a deal of this size could be worth hundreds of millions of dollars in fees.
I have a lot of respect for investment bankers. They are the guys (mostly guys, anyway) who help companies “go public” by convincing ordinary Main Street investors to buy shares in newly public companies. That takes a lot of work and is not without some risk.
What will not take a lot of work for them and involves no risk is selling Hydro One at a ridiculous, giveaway price.
I am not an expert on whether or not Hydro One needs new management or if we would all be better served if Hydro One were not 100 per cent owned by the people of Ontario. But I do know that for $9 billion, the new shareholders should get somewhere around 30 per cent of the company, not 60 per cent.
This deal is the biggest con I’ve ever seen.
Keith M. Summers is a former hedge fund manager and was convicted of fraud in 2014. He is currently serving a three-year sentence. His book, Conned: How Wall Street Rips You Off and How to Fight Back will be published this fall.
Keep Hydro Public
Kathleen Wynne wants to sell off Hydro One with no mandate from the people who own it – The people of Ontario.
That is why, this afternoon, I put forward a bill calling for a referendum on Kathleen Wynne’s attempt to sell off Hydro One.
This is what Ontarians in all corners of this province have been telling me that they want. People want the opportunity to be heard and to tell the Liberals whether or not they want their hydro utility to be sold.
Ontarians have the right to have their say.
The Premier claims that she has been up-front and honest with the people of this province. But no matter what she says, she did not run on selling Hydro One in the last election.
In fact just a few short months ago, she stood in the Legislature and looked me – and the people of Ontario – in the eyes and said that she would not sell Hydro One.
Now she is cynically insisting that this was the plan all along.
Everywhere I’ve gone Ontarians have a clear and simple message for this Liberal government: Stop the sale of Hydro One.
But Kathleen Wynne’s arrogant and out-of-touch Liberals don’t believe that they need to listen to the people.
Ontarians are frustrated and angry that this Premier is stubbornly ignoring their voices.
Ontarians own Hydro One.
Ontarians deserve the opportunity to have their say on the sell-off of Hydro One.
New Democrats are going to give Ontarians that opportunity.
If the Premier truly believes that she has the support of the people of Ontario, then she should pass this bill, hold a referendum and let Ontarians finally be heard.
-Andrea
Andrea Horwath
Leader of Ontario’s New Democrats
Please visit http://youpaytheprice.ca/ and sign the petition.
Teachers ponder big September walkout; Provincewide school shutdown would be a first
The Globe and Mail
Thu May 28 2015
Page: A5
Section: News
Byline: SELENA ROSS, JANE TABER
Ontario’s teachers unions are increasingly synchronized, with some threatening that their individual frustrations could snowball into an unprecedented mass strike in September.
Catholic and public, elementary and secondary, English and francophone – if all the unions’ worst-case scenarios come to pass, two million students could be out of school in the fall.
“We would be looking at September as not being a normal school year,” said James Ryan, president of the Ontario English Catholic Teachers Association.
“Likely, we would …proceed to work-to-rule action in early September … and probably a full withdrawal of services before the month of September is over.”
Teachers’ contracts all expired last August and the four unions have been negotiating simultaneously. Now, each union is laying groundwork to be able to walk off the job in the next few months if talks don’t go well.
Some unions have acted earlier than others and the results have helped fuel their counterparts’ anger.
On Monday, the province moved to force striking high school teachers back to work in Durham, Sudbury and Peel. The legislation is expected to pass onThursday.
In the meantime, the Ontario Labour Relations Board ruled Tuesday that the teachers had walked out illegally, since they were striking at the local level while talking mostly about bargaining issues that their union must negotiate centrally with the province.
That ruling reopened schools on Wednesday, but the labour board’s ruling is in effect for only two weeks, prompting the province to push ahead with its backto-work legislation in order to save the final two weeks of school. Nonetheless, the Ontario Secondary School Teachers’ Federation (OSSTF) could be in position to strike provincewide before September. President Paul Elliott says a major issue is a proposal to increase class sizes, while Education Minister Liz Sandals says class sizes are not on the table.
Ms. Sandals said this week she won’t speculate about September, but she said a lot can be accomplished in three months of bargaining.
The Elementary Teachers’ Federation of Ontario (ETFO) is in a provincewide strike position now.
ETFO teachers are currently on a work-to-rule job action and are adding incremental service withdrawals, with the next level starting Monday.
“Any actions that we take from now into the fall would be a coordinated provincewide action,” union president Sam Hammond said.
Outlawing the OSSTF’s approach may have helped up the ante for future strikes, said Brendan Sweeney, who teaches in the School of Labour Studies at McMaster University.
That ruling clarified the province’s new two-tier bargaining system, perhaps discouraging unions from smaller, targeted strikes.
“I wonder if that can be perceived as a challenge: ‘If you’re going to go on strike make it a province strike, and then we’ll sort something out,’ ” he said.
“And that would be extremely disruptive, and that would be a September-October thing.”
Ontario’s teachers unions have more in common these days than ever, partly as a result of newly harmonized bargaining, Mr. Sweeney said.
“Working conditions are relatively similar compared to 20 years ago across Catholic boards, between elementary and secondary teachers,” he said.
(c) 2015 The Globe and Mail Inc. All Rights Reserved.
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CUPE Denounces Back-to-Work Legislation in Teacher Strikes
Toronto – CUPE Ontario is denouncing the provincial government’s move to introduce back-to-work legislation against striking teachers.
“Premier Wynne committed to restoring labour peace after the disaster that was Bill 115 – specifically by respecting the collective bargaining process,” said Fred Hahn, president of CUPE Ontario. “Back-to-work legislation is the antithesis of respect for the collective bargaining process. The very introduction of this legislation is a disturbing throwback to the Bill 115 way of doing things.”
CUPE leaders also called into question the validity of the back-to-work bill. “The recent Supreme Court decision on the Charter-protected right of public sector workers to strike was clear. By introducing this bill, the Wynne government is acting in opposition to that decision on fundamental, constitutional rights,” said Hahn. “The Education Minister should be directing boards to meaningfully bargain to end these strikes, instead of deploying an anti-democratic hammer, in the form of a bill that may well not survive constitutional challenge.”
CUPE represents education workers in all four of the province’s school board systems – French and English, public and separate school boards. CUPE’s education sector members are also covered under Bill 122, which created a new bargaining structure for school board negotiations.
CUPE remains committed to supporting OSSTF and ETFO in their respective job actions. In Ontario’s school board sector, CUPE represents 55, 000 early childhood educators, educational assistants, instructors, custodians, school office staff, administrative staff, library and computer technicians, trades people and more.
For more information:
Craig Saunders, CUPE Communications, (416) 576-7316
Kathleen Wynne says action to end teacher strikes possible over weekend
By: Robert Benzie Queen’s Park Bureau Chief, Louise Brown GTA, Published on Fri May 22 2015
Premier Kathleen Wynne has said she is prepared to move fast — even over the weekend — to end strikes in three school boards if she gets advice that the student year is in jeopardy.
Wynne is awaiting a report by an arm’s-length expert panel as to whether high school teacher strikes in Durham, Peel and the Sudbury district are threatening the school year for nearly 70,000 students.
The chair of the Education Relations Commission (ERC) told the Star Thursday he expected a decision “in the near future” but Chris Albertyn did not say precisely when that would be.
“I don’t know whether there will be a ruling out on the weekend (but) we would act as quickly as we can,” Wynne told reporters during a visit Friday to Baycrest Health Services — suggesting an emergency sitting of the Legislature could be held Saturday or Sunday to pass back-to-work legislation.
“The fact is, if you’ll remember, the House was brought back when there was TTC labour unrest,” she said, referring to a rare weekend sitting in April 2008 that forced 9,000 striking members of the Amalgamated Transit Union back on the job.
“We’ll act as quickly as we can once we have the advice.”
Members of the Ontario Secondary School Teachers’ Federation (OSSTF) walked off the job April 20 in Durham — halfway through the second semester — and April 27 in Sudbury and May 4 in Peel. With only weeks left before exams and the end of the year, panic is setting in among students and families that the year could be lost.
As concerns grow over the academic year, Education Minister Liz Sandals tapped the ERC May 15 to decide whether the school year is in jeopardy, and the four-member panel has been gathering information, Albertyn said.
NDP Leader Andrea Horwath said Friday her party typically opposes back-to-work legislation, and “I think that the best way to get through these kinds of situations is to actually bargain seriously at the bargaining table. I don’t think the government has been doing that. Or else we would not be in the situation we are in…
“Back-to-work legislation never solves the problem in a positive way,” she said. “The problems will still be outstanding. The only difference is that the young people will be back at school. We are going to look at what the government brings forward, but I cannot speculate.”
Horwath noted the government has a majority so it can do what it wishes.
Meanwhile, the three school boards have complained to the Ontario Labour Relations Board (OLRB) that the local strikes violate the new two-tiered bargaining process because they are not really about local issues, but rather over issues such as class size that are bargained at the province-wide “central” table. The boards say the School Boards’ Collective Bargaining Act is intended to permit local strikes over only local issues, and a central (province-wide) strike over only central issues.
However the union maintains the Act draws no such line and also that the three local strikes are over the breakdown of local talks in those boards.
OLRB Chair Bernard Fishbein heard legal arguments on both sides for more than four days and has said he hopes to rule on the legality of the strikes by the middle of next week.
Meanwhile, provincial talks between the OSSTF and the Ontario Public School Boards’ Bargaining Association were to resume this weekend.
With files from Kristin Rushowy
ETFO Job Action Targets Ministry of Education
EQAO testing change hits back at province The Cornwall Standard-Freeholder Wed May 13 2015
Byline: COLIN MACKAY
The Elementary Teachers Federation of Ontario (ETFO) announced earlier this week a partial withdrawal of services was to begin on May 11.
Teachers have been told not to do prepare students or do anything regarding EQAO, or any type of Ministry of Education initiatives. As well, report cards will simply have marks placed on them with no comments. This is a new strategy from ETFO which represents a gradual phasing of work-to-rule. ETFO has called this strategy ‘Phase 1’. Phase 1’s effectiveness has yet to be determined. It will likely be determined on how annoyed the province will be when EQAO tests are not implemented properly. In the past, the implementation of EQAO has had extremely stringent rules about who can be in the room and what can be done for students. That may change.
ETFO has decided implementing an incremental work to rule is the way to go. Phase 1 will have minimal, if not altogether, no impact on students. However, it does put enormous pressure on the province with regards to the implementation of the standardized test, known as EQAO. With potentially no EQAO testing, what would the province do with no results from this year?
Essentially, negotiations have arrived at this point because the provincial government had already decided teachers would receive a ‘net zero’ contract. In other words, to gain anything, the ETFO would have to concede something within a contract. Before the process even began, the province was not only looking for teachers to make concessions, but expecting them. The starting point was ridiculous and, in fact, was no way to begin collective bargaining.
The province’s excuse has been the $10.9 billion deficit must be reduced. Somehow that has transformed into; teachers and educational workers must become ‘The Austerity Agenda.’ But wait, other public sectors have had raises of up to eight per cent, so why insist on specifically targeting educational workers, including teachers? In essence, the province wants to highlight the fact it is a tough negotiator, not willing to bend to the ETFO’s demands, and through this austerity undertaking, they will ultimately rid themselves of their own self-created deficit.
ETFO decided enough is enough. In a unique twist or turning of the tables, the ETFO has targeted the province and their sacred cow -EQAO testing. Even if the test is somehow administered by principals and others, would the results be valid? Conditions for the test will have changed dramatically, especially when compared with other years, since no classroom or special education teachers will be present inside the testing rooms.
Fundamentally, under Premier Kathleen Wynne, education has turned into an expense, something to reign in. Instead the province’s outlook should be -Education is an investment -not part of a specifically targeted austerity agenda.
After imposing conditions via Bill 115 unilaterally there was no way the ETFO would settle for concessions in this collective agreement. Sadly, the province did have an alternative to choose by increasing corporate taxation by one or two per cent. However, it would appear, they instantly discarded that possibility, despite Ontario corporations already having a ridiculously low tax rate.
Instead of problem solving, which should be the goal of governments, the province of Ontario decided to initiate a conflict.
If the province somehow manages to implement EQAO testing, the ETFO will be forced to consider stronger measures. Simply not doing ministry initiatives only targets the government for now.
That said the government built the crisis; they should be the ones to solve it.
(c) 2015 Osprey Media Group Inc. All rights reserved.
ETFO strike action starting Monday targets education ministry, not students
TORONTO, May 8, 2015 /CNW/ – Teacher and occasional teacher (OT) members of the Elementary Teachers’ Federation of Ontario (ETFO) will begin “phase 1” work-to-rule strike action this Monday, May 11 by withdrawing from Ministry of Education initiatives, including EQAO testing. The work-to-rule will affect all 32 of Ontario’s English public school boards.
ETFO’s 73,000 teacher and OT members will remain in schools to carry out their instructional duties with students, provide extra help to students and maintain contact with parents. Teacher voluntary extra-curricular activities and scheduled field trips will continue for the duration of the phase 1 work-to-rule. The strike action is incremental in nature and will continue until bargaining issues are resolved or ETFO deems further actions are required.
“Minister Sandals and her government have been willing partners with the Ontario Public School Boards’ Association (OPSBA) in making demands that would unravel a decade of progress in creating a strong education system and strong teachers,” said ETFO President Sam Hammond. “ETFO teachers are not prepared to allow increases in class sizes, have their preparation time directed by others, or be micromanaged and have their ability to support student learning compromised.
“After eight months of bargaining, it is entirely disingenuous of Minister Sandals to plead ignorance of how these and other issues have forced us to take this strike action.
“In its first time at the central bargaining table, OPSBA has recklessly demanded numerous concessions and utterly disrespected agreements reached during the last decade of bargaining,” added Hammond.
Starting Monday, ETFO teachers and occasional teachers will cease undertaking EQAO testing with students or related activities, will not prepare report card comments other than providing a class list of marks, and will not participate in any Ministry initiatives and activities.
“The ministry needs the cooperation of our members to achieve its educational aspirations. That cooperation is now withdrawn until the government and OPSBA return to the bargaining table to address the issues that truly matter to students and teachers,” Hammond said.
The Elementary Teachers’ Federation of Ontario represents 76,000 elementary public school teachers, occasional teachers and education professionals across the province.
SOURCE Elementary Teachers’ Federation of Ontario
For further information: Valerie Dugale, ETFO Media Relations: Cell: 416-948-0195, vdugale@etfo.org
Update on Education Worker Strike Action
Ontario’s public elementary school teachers may be on strike on Monday and parents won’t know until Thursday night at the earliest.
The Elementary Teachers’ Federation of Ontario (ETFO) president Sam Hammond told CityNews that the union will decide its course of action and announce it on Thursday, maybe even Friday.
Thirty-two public school boards will be impacted by whatever job action is chosen.
Hammond confirmed that robocalls were sent to elementary teachers on Monday night, apparently saying to prepare for a ‘work-to-rule’ situation. ETFO also provided notice to the Ontario Public School Boards’ Association (OPSBA) of it’s intent to take strike action.
A letter was sent home to parents of elementary school children in Durham warning of potential job action.
The union received a ‘no board’ report from the Ministry of Labour on April 24, which will put them in legal strike position this Sunday.
“I’m not going to speculate on what may happen on Monday or what may or may not happen in the weeks to come,” said Wynne. “What I know is we need to get those central deals.”
ETFO said it could begin with incremental strikes, which would target standardized testing, and then they would step it up by expanding their work-to-rule. Eventually, teachers could walk off the job.
Peel District School Board officials said the local ETFO has informed them that work-to-rule will start in elementary schools on Monday.
“Work-to-rule means partial withdrawal of service. Once we know which services are being withdrawn, we will communicate again with families and students,” Peel said in a release.
“We are doing everything in our power to stay at the table, to bring people back to the table and to negotiate and those conversations are ongoing,” she added.
However, the board said elementary schools won’t be closed during the job action. Monday is also a P.A. Day for Peel elementary students.
Meanwhile, the president of the local teacher’s union in Durham said things will escalate, but schools likely won’t shut down next week.
“I don’t think it’s in anyone’s interest at this time to talk about walking the line right now,” Gerard O’Neill explained. “Our brothers and sisters at OSSTF are on strike and they’re putting the pressure on the government that way. We’ve decided on a different method.”
The Toronto District School Board (TDSB) sent a letter to parents of elementary school students outlining what they need to know in advance of possible strike action.
The ETFO represents 76,000 elementary public school teachers, occasional teachers and education professionals and is the largest teachers’ union in the country.
ETFO’s 3,000 designated early childhood educator, education support personnel and professional support personnel members will not be participating in the job action.
Meanwhile, Catholic elementary and secondary school teachers are also in contract talks — their union has voted 94 per cent in favour of a strike if bargaining fails; however, they are not in a legal strike position at this time.
Public high school teachers in Peel, Durham and Sudbury are already on strike.