#8173448 - 04/16/15 04:29 AM
Liberals will sell 60% of Hydro One to fund transit
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zaius
Post Master Sr
Registered: 04/30/05
Posts: 8626
Loc: Toronto
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https://www.thestar.com/news/queenspark/...astructure.html
it's official. she's out to destroy and bankrupt the province. there goes another source of revenue generating for the province.
Premier Kathleen Wynne’s Liberals will sell off 60 per cent of the province’s $16-billion Hydro One transmission utility to bankroll new transit infrastructure, the Star has learned. Queen’s Park will retain a 40 per cent stake and minority shareholders will be limited to a 10 per cent ownership, sources say. At the same time, Hydro One Brampton and Hydro One Networks’ distribution arm will be spun off into a separate company and sold outright for up to $3 billion. The Hydro One changes — and a plan to allow the sale of beer in about 300 supermarkets — are key recommendations in a major report to be released Thursday by Wynne’s privatization guru Ed Clark, the former TD Bank CEO. Insiders confide that Wynne will immediately accept Clark’s findings and move forward ahead of Finance Minister Charles Sousa’s April 23 budget. All proceeds will go toward a 10-year, $29 billion infrastructure plan that includes $15 billion to build public transit in the Greater Toronto and Hamilton Area. Wynne defended the Hydro One partial privatization, saying it’s a “very different process” than the full sell-off the Progressive Conservative administration had planned in 2002 because Ontario will keep the largest single ownership stake and maintain regulatory and price control. “We cannot sacrifice our future prosperity and our future economic health by not investing in infrastructure,” said the premier, noting she “ran on a review of assets” in the June 2014 election. “It’s much more difficult to imagine a future where we don’t invest in infrastructure, where we don’t build the roads and the bridges in the north that we know are needed, that we don’t build the public transit that we know is needed in the Greater Toronto and Hamilton Area,” she said. The government will also strengthen the Ontario Energy Board, the regulatory body that controls hydro prices, in a bid to better protect electricity ratepayers, sources say. Canada’s major banks, pension funds, and foreign firms like the U.S. holding company, Berkshire Hathaway have expressed interest in purchasing chunks of Hydro One. Current Hydro One chair Sandra Pupatello will soon be succeeded by David Denison, former president and CEO of the Canada Pension Plan Investment Board. It will be Denison’s job to be to get the utility primed for sale. In order to shed Hydro One’s government-owned image before going public it was decided that Pupatello, a former cabinet minister who finished second to Wynne for the Liberal leadership in 2013, should be replaced. The company, which owns 97 per cent of the province’s transmission grid, had a net income last year of $749 million on revenues of $6.5 billion, providing Queen’s Park with a $287-million dividend. While Hydro One has $22.6 billion in total assets, government insiders believe it will be worth around $16 billion on the open market. Beyond Hydro One, Clark’s panel is urging major changes to Ontario’s alcohol distribution system that has changed little since the prohibition era of the 1920s. Queen’s Park will keep its 651-store Liquor Control Board of Ontario, but the private 448-outlet Beer Store chain — owned by the foreign parent companies of Labatt, Molson, and Sleeman — faces new competition. The province will auction off beer licences to about 300 of Ontario’s 1,500 supermarkets. No one grocer will be allowed to own more than 25 per cent of them. A significant annual “franchise fee” will be levied upon the Beer Store, which will bring much-needed revenue into a provincial treasury saddled with a $10.9-billion deficit in 2014-15. As disclosed by the Star on Wednesday, an expansion of wine sales in grocery stores will be delayed as Clark takes a closer look at that issue. “The reality is, as Ed Clark and his team started this discussion with the alcohol and beverage sector, the complications around the Beer Store and the unfairness inherent in the way the Beer Store was organized became very clear,” said Wynne. “It’s taken a lot of energy and time to deal with that issue. And the fact is we do have wine that’s being sold already in some grocery stores,” she said, referring to the American-owned Wine Rack and Canadian-owned Wine Shop that operate a combined 268 supermarket kiosks and standalone stores that sell Ontario and blended foreign bulk wine. “We need to build on that and we need to have the same kind of intense conversation. But the Beer Store was the entry point into levelling the playing field, creating more convenience and more fairness,” the premier said. NDP Leader Andrea Horwath warned that selling off Hydro One is a mistake that consumers will pay for forever. “It is a one-time hit of cash for the current government that Ontarians will be paying for generations,” she said, predicting electricity rates will rise and noting a legal opinion prepared by Sack, Goldblatt Mitchell LLP for the Canadian Union of Public Employees that says “the premier’s plan might not even be legal.”
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2003 dc5 typeS. looks stock.
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#8173465 - 04/16/15 06:16 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Choco 'Nuck]
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spd-dmn
Post Master
Registered: 11/24/04
Posts: 2271
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407 all over again
hopefully the budget gets defeated
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#8173471 - 04/16/15 06:42 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: spd-dmn]
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LNXGUY
Post Master Supreme
Registered: 08/06/00
Posts: 107087
Loc: Barrie, Ont,
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They didn't learn from the 407? For fuck sakes this province.
Someone needs to get rid of this stupid cunt.
_________________________
-Bill The GN would OWN you, your children and your children's children. '09 E90 335 d
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#8173581 - 04/16/15 08:24 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: zaius]
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spd-dmn
Post Master
Registered: 11/24/04
Posts: 2271
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budget can't get defeated.
we gave the spawn of Satan a majority.
fuck.
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#8173588 - 04/16/15 08:30 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: spd-dmn]
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A2B-Lexus
Post Master Supreme
Registered: 04/19/01
Posts: 45550
Loc: Raptors Land
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#8173604 - 04/16/15 08:41 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Choco 'Nuck]
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Euphoricuck
Post Master Supreme
Registered: 11/05/03
Posts: 92703
Loc: Canadistan
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Hudak would have chopped that largesse lol thats cute.
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#8173615 - 04/16/15 08:45 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Euphoricuck]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44917
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Since we have so many strong opinions on here, can all of you against it break down the cons of this decision (without ignoring the fact that government still is the governing body overlooking pricing of hydro and will be the majority shareholder).
Thanks.
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#8173662 - 04/16/15 09:05 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Euphoricuck]
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spd-dmn
Post Master
Registered: 11/24/04
Posts: 2271
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gov may end up with the highest number of shares, yes, but they will not be a majority holder
thx?
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#8174112 - 04/16/15 12:43 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: zaius]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44917
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it's like having a goose which lays golden eggs for you.
everyday it lays 10 golden eggs (it's a slut). you're giving away 6 eggs instead of taking the profits of all 10 daily.
sure, the government can set the price for each golden egg, but the fact is that you're allowing other companies to keep 6 golden eggs daily is mindboggling.
Yessss, an analogy, i love these.
Let me throw one your way then.
Imagine you had a rental property worth a million and you were collecting 100k rent from it annually as your only source of income.
Also imagine you had a primary residence with a mortgage of 25/year, 2 kids, that cost 25/year, cars/wife/misc expenses of 50k, taxes of another 25k running an annual deficit of (25k).
Also imagine you are 2M in debt on top of that (part of the 50k in misc expenses is to pay interest on that debt) and it’s only going to get more expensive as you continue to be a slow repayer.
Wouldn’t it make sense to sell off a portion of your rental home for 600k to throw towards your high interest debt outstanding and refinance the terms with lower rates/payments (have less negative equity and essentially a higher net worth)? Or do you perpetually stay on your debt repayment schedule that would take another 100 years to drop your existing debt by 600k?
Disclaimer, I am not pro/against this, I don't know the true impact of the sell off, hence why I am asking the experts such as yourself, c2k, Euphoric, Chocolate Canuck to give me the quantifiable impacts of the sale.
I think the big take away here that people (i think) are not grasping is that there is no way the province can balance the budget without drastic measures. If we continue on the same path we will be bankrupt (theory) and assets would be auctioned off anyway (where we wouldn't even keep 40% of hydro one). So instead of getting pennies on the dollar like a real business would undergoing a liquidation process this seems like a proactive step to do something about it. It's not about giving up the golden eggs anymore, the situation is so far gone that whatever cashflow you are getting is still not enough to even cover basic expenses.
If you got laid off and couldn't find a job and keep making your mortgage payments, would you stay in the house until the cops/bank kick you out and you lose it completely or would you sell it and get whatever equity out of it to support yourself as a life line until your get your shit together? Seems pretty simple to me.
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#8174211 - 04/16/15 01:34 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Risky Business]
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Choco 'Nuck
Proud Member of BLM
Post Master Supreme
Registered: 07/10/01
Posts: 17568
Loc: Somewhere out there
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it's like having a goose which lays golden eggs for you.
everyday it lays 10 golden eggs (it's a slut). you're giving away 6 eggs instead of taking the profits of all 10 daily.
sure, the government can set the price for each golden egg, but the fact is that you're allowing other companies to keep 6 golden eggs daily is mindboggling. Yessss, an analogy, i love these. Let me throw one your way then. Imagine you had a rental property worth a million and you were collecting 100k rent from it annually as your only source of income. Also imagine you had a primary residence with a mortgage of 25/year, 2 kids, that cost 25/year, cars/wife/misc expenses of 50k, taxes of another 25k running an annual deficit of (25k). Also imagine you are 2M in debt on top of that (part of the 50k in misc expenses is to pay interest on that debt) and it’s only going to get more expensive as you continue to be a slow repayer. Wouldn’t it make sense to sell off a portion of your rental home for 600k to throw towards your high interest debt outstanding and refinance the terms with lower rates/payments (have less negative equity and essentially a higher net worth)? Or do you perpetually stay on your debt repayment schedule that would take another 100 years to drop your existing debt by 600k? Disclaimer, I am not pro/against this, I don't know the true impact of the sell off, hence why I am asking the experts such as yourself, c2k, Euphoric, Chocolate Canuck to give me the quantifiable impacts of the sale. I think the big take away here that people (i think) are not grasping is that there is no way the province can balance the budget without drastic measures. If we continue on the same path we will be bankrupt (theory) and assets would be auctioned off anyway (where we wouldn't even keep 40% of hydro one). So instead of getting pennies on the dollar like a real business would undergoing a liquidation process this seems like a proactive step to do something about it. It's not about giving up the golden eggs anymore, the situation is so far gone that whatever cashflow you are getting is still not enough to even cover basic expenses. If you got laid off and couldn't find a job and keep making your mortgage payments, would you stay in the house until the cops/bank kick you out and you lose it completely or would you sell it and get whatever equity out of it to support yourself as a life line until your get your shit together? Seems pretty simple to me. I would never expect such a shitty analogy from an accountant
This is a revenue generating corporation which essentially cannot make a loss. You have a captive audience, people have to pay for electricity, they don't have a choice, not a rental unit that generates slow income. A better analogy would be selling your company because you wanted to pay the taxes owing. Its myopic, especially when the valuation will probably be low enough for some liberal cronies to purchase large portions.
Lets not even talk about the public utility aspect of it, the gov't by nature has to have an interest in electricity generation and distribution. It cannot be outsourced where the primary motivation will be profit for a private company. It is an essential service.
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#8174241 - 04/16/15 01:46 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Choco 'Nuck]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44917
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The analogy obviously flew right over your head.
My intuition was right, you really don’t understand the issue, like Euphoric at least don’t out yourself so easily/quick and do a dance/troll/do you even corp tax cutz bro? It would take us longer to come to the conclusion that this is far over your head to comprehend.
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#8174294 - 04/16/15 02:10 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Risky Business]
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Euphoricuck
Post Master Supreme
Registered: 11/05/03
Posts: 92703
Loc: Canadistan
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Yessss, an analogy, i love these.
Let me throw one your way then.
condescending about analogies, then offers up own(obviously better) analogy.
Disclaimer, I am not pro/against this, I don't knowthe true impact of the sell off
default disclaimer "well guys I don't really know but.." priming up for layman analysis of the situation.
hence why I am asking the experts to give me the quantifiable impacts of the sale.
more condescending bs about "experts" asking for hard data, yet doesnt have any himself.
I think the big take away here that people are not grasping
after getting mad and claiming no knowledge of the situation offers expert condescending analysis provided with plenty of quantifiable data
Seems pretty simple to me.
more condescending bullshit glossing over how "easy" it is(that a cave man could do it). And though hes defaulted as not being an "expert" and wants quantifiable data. He puts forth his expert opinion (proclaiming he fully grasps the issue) and offers no quantifiable data himself while attempting to insult other posters.
This is a trollvortex of the highest order.
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#8174314 - 04/16/15 02:18 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Euphoricuck]
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Choco 'Nuck
Proud Member of BLM
Post Master Supreme
Registered: 07/10/01
Posts: 17568
Loc: Somewhere out there
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Hahahaha. I bet Risky supported leasing the 407 for 99 years to that Spanish corp too.
Hydro One’s numbers seem impressive – it claims $22.55 billion total assets and net equity of $7.93 billion – but there is a catch. Hydro One’s entire value is already spoken for. Taking into account bloated and growing taxpayer-backed electricity debt lurking at the shadowy Crown corporation called Ontario Electricity Financial Corporation (OEFC) along with Hydro One’s $3.2- billion in regulatory assets, half of which is pension liabilities not yet funded, it is likely that Hydro One is today more than 100% mortgaged. There is no value to be extracted, unless new burdens are foisted onto ratepayers and taxpayers.
oday, the book value of Hydro One is included as a financial asset in the government accounts. Any dilution of this interest would decrease the value of the investment. To avoid increasing the Province’s net debt, the proceeds of any sale would have to discharge existing debt. Only any premium over book value could be claimed as a gain, but the prospects for such a premium don’t look promising.
even if the legislation was silent on the disposition of sale of Hydro One assets or if that legislation was repealed, the taxpayers would still be on the hook for all of OEFC’s liabilities.
From some accountant who understands the issue. Tax payers still on the hook for the debt.
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#8174441 - 04/16/15 03:10 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: zaius]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44917
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So what you are saying is that you would hold on to the rental building until you go bankrupt and lose it completely once you enter receivership because you haven't met your overall debt obligations (the rental building is not even a fraction of your assets/liabilities that you have to meet daily).
I understand that hydro one is making money, but I also understand that the province is on the verge of another rate downgrade and interest rate hike that will eat up even more of that hydro one revenue that's going to go in just paying interest as there is no confidence in the province.
Can't look at this in a vacuum.
Realistically, is there even a single action item that the government can undertake that wouldn't be met with resistance from the public?
Sell a part of hydro one, nope. Sell off LCBO, nope. Raise income tax, nope. Raise sales tax, nope.
The more popular action items such as not allowing tax breaks for the rich (income splitting), getting control of public servant salaries, etc are all multi year/decade obstacles that can't be tackled when bankruptcy will hit us way before that. Pretty sure it doesn't matter what the government does, it won't be popular, but is necessary.
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#8174548 - 04/16/15 03:54 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Risky Business]
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Choco 'Nuck
Proud Member of BLM
Post Master Supreme
Registered: 07/10/01
Posts: 17568
Loc: Somewhere out there
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See, that is where having the balls comes in (and as manly as wynne looks, I doubt she has any). If you remember Ralph Klein in the 1990s, he gave them a choice, he said we need to balance the books and there will be some painful cuts (public service salaries, education, health care, income tax etc). He called an election and got a majority to implement his plan. He brought Alberta back from the brink after the oil revenues had collapsed.
Its the same thing that Prentice is doing now.
Do you think that Wynne , would ever do that. Lay out the numbers and give the public the choice. Selling off these assets only balances this budget, what about the next one and the next one? Public service salaries will keep increasing, spending on healthcare and education, as well. Myopic. The liberals need to cut spending, but they absolutely refuse to. They want to sell hydro to pay for transit? Really? Good lord, pay for transit with user fees. Implement distance based travel like the rest of the civilized world. Implement tolls on the DVP.
The liberals themselves have said in 2002 when they were in the opposition that privatizing hydro will inevitably lead to higher electricity bills.. You've already seen Toyota and GM pull production from Ontario, because of cost. How much more manufacturing and associated jobs do we have to lose before these idiots wake up.
Here's a quick blurb on Ralph Klein, read it and see what a real leader is, not a two (man) faced liar
http://news.nationalpost.com/full-comment/jesse-kline-ralph-klein-was-a-one-of-a-kind
In 1992, Mr. Klein won the leadership of Alberta’s Progressive Conservatives, besting rival Nancy Betkowski, with 60% of the vote on the second ballot. As premier, Mr. Klein faced the tough challenge of maintaining the Conservative dynasty, after public support for the party began slipping under the previous administration.
An even greater challenge, however, was fixing the fiscal mess left by the Getty government.
The province’s fiscal situation was stark: The government ran a $2.6-billion deficit in 1992, which would rise to $3.4-billion the following year. Government debt sat at $23-billion when Mr. Klein assumed office. Interest payments alone were costing the province $1.3-billion a year — about 10% of its budget.
Just one day after assuming the premiership, Mr. Klein cut the size of the cabinet from 26 to 17 ministers, and amalgamated 22 committees into four super-committees. He forced all MLAs and civil servants to take a 5% pay cut.
The 1993 budget, tabled just one month before Mr. Klein faced the electorate for the first time as premier, instituted a 20% across-the-board spending cut, and reformed MLA pensions. This caused widespread anger among teachers, students, public-sector unions, bureaucrats, seniors and artists. But Mr. Klein stood steadfast, and his party was rewarded with 51 out of the province’s 83 seats.
Throughout his first full term in office, Mr. Klein continued his quest to cut spending, reduce the size of government and reform public-sector pay, while maintaining the low-tax, business-friendly environment that created the “Alberta Advantage.” Under the mantle of getting government “out of the business of business,” the Tories privatized liquor stores, and created public-private partnerships to handle everything from vehicle registration to road construction and the maintenance of provincial parks.
His example shows that austerity policies can be effective and popular if implemented in an intelligent way: The Progressive Conservatives actually gained 12 seats in the 1997 election, and Mr. Klein would go on to win two more elections after that, becoming Alberta’s third-longest-serving premier.
King Ralph, as he came to be known, was a rare breed of politician — the kind that a province is lucky to see once in a generation. He could always be counted on to say exactly what was on his mind. Sometimes, this attribute got him in trouble, and his detractors (of whom there were many) were quick to pounce on every gaffe. But he also was admired for cutting through the spin and half-truths usually spouted by politicians.
When all was said and done, Mr. Klein had eliminated the deficit, paid off the debt and ushered in a new era of prosperity for the province. Thanks in large part to the growth of the oil industry, Alberta saw its unemployment rate drop from 8.5% in 1995 to 2.9% in 2006.
Ontario doesn't have oil, it has manufacturing which depends in large part to cheap electricity. Let the liberals fuck that up, and this place will continue its decline
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#8174563 - 04/16/15 04:16 PM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Choco 'Nuck]
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Risky Business
Provides a Great Work Environment. he/him
Post Master Supreme
Registered: 05/17/10
Posts: 44917
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Selling off these assets only balances this budget, what about the next one and the next one?
The point I am trying to make is that if the province doesn't have a life line now (cash injection of some sort to at least resemble austerity measures) there may be no "next budget" because we will be bankrupt...
I am not advocating for the sale of hydro one...
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#8175219 - 04/17/15 04:24 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Risky Business]
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zaius
Post Master Sr
Registered: 04/30/05
Posts: 8626
Loc: Toronto
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you guys realize that electricity rates will be increase drastically in the next "5" years right?
http://www.theglobeandmail.com/news/poli...rticle15717495/
The province’s long-term energy plan, released Monday, projects a 42-per-cent jump in home power bills by 2018, climbing to 68 per cent by 2032. The cost for industrial enterprises will also rise, by 33 per cent in the next five years and 55 per cent in the next 20.
this is due to the sheer brilliance of giving out 20 year contracts to wind farms and solar farms at a huge markup in price.
http://www.cbc.ca/news/canada/toronto/ontario-to-cut-rates-paid-for-wind-solar-power-1.1157717
The province will drop the guaranteed rate for small rooftop solar projects from 80.2 cents per kilowatt hour to 54.9 cents, while larger solar installations will get between 34.7 cents and 44.5 cents a kWh.
The amount guaranteed for power from industrial wind turbines will drop from 13.5 cents per kilowatt hour to 11.5 cents, regardless of the size of the wind farm.
Ontario Power Generation, the government-owned utility, is paid 5.6 cents a kWh for nuclear power and between two cents and 3.5 cents per kWh for power from its hydro-electric facilities.
the kicker is that regardless if Ontario needs the electricity generated by the wind or solar farms, we have to pay them if they're generating. that means, the cheaper electricity we get from hydro-electricity (water dams), and nuclear (which we can't shut down), we need to PAY the states or Quebec to take the electricity generated by them.
http://globalnews.ca/news/1094074/exporting-surplus-electricity-cost-ontario-1-billion-in-2013-ndp/
The government signed contracts for so much unneeded electricity that Ontario had to export the surplus, at a loss, to Manitoba, Quebec, New York, Michigan or Minnesota, adding $220 a year to the average household electricity bill, said NDP energy critic Peter Tabuns.
and now we're selling major infrastructure? what needs to happen s like what chocolate canuck says.
cut back in spending like all day kindergarten. even local taxation measures as temporary pain for a long term solution. you don't punish the whole province just to solve some GTA issue.
_________________________
2003 dc5 typeS. looks stock.
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#8175284 - 04/17/15 07:37 AM
Re: Liberals will sell 60% of Hydro One to fund transit
[Re: Euphoricuck]
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Choco 'Nuck
Proud Member of BLM
Post Master Supreme
Registered: 07/10/01
Posts: 17568
Loc: Somewhere out there
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Cough cough, conservatives told you they would chop 100,000 public service jobs.
I guess you were
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