The Biggest Threat to Manitoba Hydro is Brian Pallister

November 2, 2018

Pallister has a habit of picking fights in order to divert attention from some tire fire or crisis of his own making. He just cancelled a Hydro contract with the Manitoba Metis Federation which compensated them for Hydro facilities and being on their lands.

Pallister's decisions are throwing Hydro into chaos. Since April, nine of ten board members quit, and the tenth is being removed because he disgraced himself and was kicked out of the PC caucus.

The CEO is quitting next month so he can leave on his own terms, and the new Minister has been mostly silent. By cancelling signed deals, he is opening up Hydro to lawsuits and delays when we need to get our power to market.

It's important to recall that when nine of the Premier's handpicked Hydro board members resigned in April, they said it was because the Premier had refused to meet with them to discuss what they described as looming financial crisis that threatens to take down Hydro.
It was the Premier and *no one else* who said it was about the MMF.

The two deals the Premier has ripped up average about $1.7-million/year over the next 50 years. That's less than half the $200-million the Premier used to bail out the Investor's Group Stadium.

Pallister keeps blaming the NDP for reckless decisions with Hydro, big projects and cost overruns - but there's a bigger problem and Pallister is just as responsible.

This year alone, the Pallister government will take about 200 times more out of Hydro than was on offer to the MMF.

The Capital tax, the debt fee and water rentals all add up to $380-million that goes into Manitoba's general revenue.
These fees and taxes are a "perverse incentive" - they encourage the government and party in power to do the wrong thing.

The more the government can force Hydro to overbuild, the more the government gets in capital tax. The more the government can force Hydro to borrow, the more the government gets as a debt fee.

The Pallister government, like the one before, it, is taking hundreds of millions from Hydro to make the government's books look better, or to cut taxes for the richest Manitobans - and they have been using Hydro as a credit card. All that debt is going on Hydro's books, raising rates, the cost of living and of doing business. Pallister is cutting his own taxes and putting spending on Hydro's debt - which all of us have to pay through higher rates.

The Hydro Board resigned because its existence is at risk, and the Premier wouldn't listen.

We need to understand how serious Hydro's situation is.
The province of Manitoba has about $16-billion in revenue. About a quarter comes from the federal government. Our provincial debt is over $20-billion.

Hydro's revenues are about $2-billion - and its debt is headed to the same levels as the province.

But it is all provincial debt. We own Hydro. We are all on the hook.

By picking fights and tearing up contracts, the Premier is trying to distract from his government's catastrophic mishandling of a file that poses a threat to the province's finances, because Hydro cannot sustain this debt.

 

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