Sunday, February 04, 2007
Why Not Privatize Hydro
Gary Doer accussed Hugh McFadyen and the Tories of planning to sell Manitoba Hydro. McFadyen couldn't have been quicker to dodge Doer's denunciation, saying "Manitoba Hydro is completely and totally different (from MTS). It would make no sense at all to sell it."
The topic deserves some debate.
The privatization of MTS was a success, and Manitobans realize that. Privatization is not a word that induces fear in the citizenry the way it used to.
The topic deserves some debate.
Another approach to ease the transition from the old model would be to recycle the community capital tied up in these organizations into an endowment fund. Manitoba Hydro and the province's hydro-generating potential might provide up to $10 billion in seed money for our own Heritage Fund, an amount that could generate over a billion dollars annually. How many Manitobans would object to selling Manitoba Hydro if it meant a yearly dividend cheque in the mail?
An added benefit would be the overnight creation of a major corporate taxpayer. Crown jewels look nice in a display cabinet, but they tend to gather a lot of dust. TransAlta, the Calgary-based power company that is roughly the same size, pays corporate taxes that are higher than Manitoba Hydro's entire profit, even after distributing healthy dividends to its shareholders.
The privatization of MTS was a success, and Manitobans realize that. Privatization is not a word that induces fear in the citizenry the way it used to.
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in order to become as profitable as it should be, hydro needs major house cleaning. The thing is that it revolves so much around environmental concerns, the government doesn't want to let that go private. But as you said, private energy concerns in alberta are operating fine, and keeping the greens happy.
government housecleaning is not an easy proposal, and privitization would of course be quicker. selling off the assets would be a nice quick shot in the arm for government coffers, and the future tax revenue would keep the provs happy without having to have the huge extra weight of hydro
government housecleaning is not an easy proposal, and privitization would of course be quicker. selling off the assets would be a nice quick shot in the arm for government coffers, and the future tax revenue would keep the provs happy without having to have the huge extra weight of hydro
There's billions more for Mantioba if we raise rates to market levels and have the profits go to funding the budget. We could cut significant taxes, while encouraging consumption cuts.
I agree that Manitobans better get used to the idea of paying market rates, but I don't think the government should run Hydro anymore. The private sector could do so much more with Hydro than the government ever will. And funding the budget with the profits of a crown corporation will simply never happen, the funds will always go to slush funds and rainy-day accounts and the such.
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