L029b - Thu 18 Jun 1998 / Jeu 18 Jun 1998 1
ENERGY COMPETITION ACT, 1998 / LOI DE 1998 SUR LA CONCURRENCE DANS LE SECTEUR DE L'ÉNERGIE
The House met at 1832.
ORDERS OF THE DAY
ENERGY COMPETITION ACT, 1998 / LOI DE 1998 SUR LA CONCURRENCE DANS LE SECTEUR DE L'ÉNERGIE
Resuming the adjourned debate on the motion for second reading of Bill 35, An Act to create jobs and protect consumers by promoting low-cost energy through competition, to protect the environment, to provide for pensions and to make related amendments to certain Acts / Projet de loi 35, Loi visant à créer des emplois et à protéger les consommateurs en favorisant le bas prix de l'énergie au moyen de la concurrence, protégeant l'environnement, traitant de pensions et apportant des modifications connexes à certaines lois.
Mr Len Wood (Cochrane North): On a point of order, Mr Speaker: Do we have a quorum for this important -
The Speaker (Hon Chris Stockwell): Is a quorum present, please?
Clerk at the Table (Mr Todd Decker): A quorum is not present, Mr Speaker.
The Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Mr Speaker.
The Speaker: Member for Windsor-Riverside.
Mr Wayne Lessard (Windsor-Riverside): Thank you, Mr Speaker. I appreciate the opportunity to ensure there is a quorum here to listen to this most important debate about Bill 35, the bill to break up Ontario Hydro.
When I left off yesterday, I was talking about some of the problems that Ontario Hydro has experienced that have led us to the introduction of Bill 35, a bill that is this government's approach to try and deal with some of the problems Hydro has had since it was first established almost 100 years ago.
The biggest problem that Ontario Hydro has experienced and is experiencing is incredible amounts of debt. We know that tens of billions of dollars in debt now inhibit Ontario Hydro's ability to be as competitive as they really should be. We know as well how much of that debt was accumulated. It was through sloppiness, mistakes, mismanagement and political interference.
When I talk about political interference, I'm talking about the decision to build Darlington. Darlington was one of the single biggest contributors to the amount of debt that Ontario Hydro has right now, and I seem to recall that was a project that was undertaken by a Progressive Conservative government back in the 1970s. It started out as a $3-billion project and ended up as a $14-billion project, and this is a government that likes to pride itself on its ability to be good fiscal managers. They let this go completely out of control, and because of that there are a lot of us who are afraid that we're going to end up being stuck with the bill.
New Democrats have been consistent in their opposition to the nuclear power strategy. One of the things that concerns me about Bill 35 is that it still considers nuclear power to be a clean power option, something we should perhaps continue to pursue as a means of producing power here in Ontario.
This bill does nothing to address our concerns about nuclear power generation in Ontario; in fact, it enhances them. We are concerned that nuclear power plants may end up in the private sector. We're concerned about the privatization of the nuclear power industry in Ontario, and I think the public is concerned about that as well.
The stranded debt problem - "stranded debt" is a term that is defined in Bill 35 - is something that I think brings home to all of us that Sir Adam Beck's vision of power at cost has simply gone astray. Something went horribly wrong with the vision of Adam Beck that we should be able to get power at cost here in Ontario, because if we were paying the cost of the generation of hydro in Ontario, we wouldn't have that huge stranded debt problem that we have right now.
New Democrats agree that there needs to be change. We agree as well that there needs to be competition in the hydro sector. When the NDP was in government, we opened the doors to competition. We had a non-utility generator established in the city of Windsor, TransAlta. We had a power plant that provided power to the Chrysler minivan plant. The member for Cochrane North reminds us that in Spruce Falls there was a public sector-private sector partnership to engage in hydro-electric generation, a project we were very proud of because it ensured that the Spruce Falls pulp and paper mill was able to continue in business, thanks to the intervention of the New Democratic government at the time.
The problem is that we're stuck with this stranded debt right now. What we really need to know is who is going to determine what the stranded debt is, how is it going to be determined and when are we going to know what that amount is. How many billions of dollars is it? How much are we going to have to pay for the mistakes of previous Tory and Liberal governments in pursuing the construction of the Darlington nuclear plant and other nuclear plants in Ontario? We see how many billions of dollars we're being saddled with because of those previous governments' mistakes. That outlines some of the problems they've had at Ontario Hydro that this government feels it needs to bring in Bill 35 to address. This is the Progressive Conservative government's approach to dealing with the problems of Ontario Hydro and we acknowledge that there are some problems.
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What I want to say to the people who are watching - because I'm not sure the members in the government are really paying a whole lot of attention to what I have to say - is that if you like what Mike Harris did for health care in Ontario, if you like what Mike Harris did to public education in Ontario, you're going to love what Mike Harris is going to do to Ontario Hydro. I can see that there are some members of the government who obviously approve of -
Mr Joseph Spina (Brampton North): That's inflammatory.
The Speaker: It's not out of order to be inflammatory.
Mr Lessard: I'm glad we've been able to enlighten the debate with respect to Bill 35. I was afraid that when we were talking about a bill like this, as important as it is, that it may get a tad boring. But I'm glad that people are interested enough that I've been able to get the response that I had.
What I was saying, and I know the members of the government agree - they like what Mike Harris has done for health care and education in Ontario - but people in Windsor-Riverside and people in Cochrane North and people in many parts of Ontario are not really too crazy about what Mike Harris has done to health care and education. Like other parts of the Tory agenda - the Common Sense Revolution comes to mind, the phoney tax scheme comes to mind as well - the spin doctors and the whiz kids in the corner office have dressed up this Bill 35 with a whole lot of fancy packaging, fancy lines to try and sell the public on what it is that they're trying to do with respect to Ontario Hydro, trying to get the public to buy into what they're doing.
This is how they've done it. They're saying to the public that the system is broken and that it needs to be fixed. That's something that sounds pretty good. They are also promising that hydro consumers are going to get a big break on their bill. Hydro rates are going to go down. The bills are going to get lower. Who wouldn't like that? That would sound good. I happen to be a hydro consumer myself, so I'd be happy if my bills went down.
The other thing they promise - they're offering consumers more choice as well. They say to people, "Maybe you'll be able to make arrangements to buy power from the distributor of your choice and therefore you'll be able to negotiate lower rates, and that sounds pretty good too. They also hold out the promise that the stranded debt is going to be paid over a reasonable length of time, that paying off these billions of dollars of stranded debt is going to be a painless exercise. They also promise that there's going to be better environmental protection, that by opening up the hydro market we're going to have cleaner air and cleaner water.
They're also saying that Ontario Hydro won't be privatized. I know there are a lot of members of the public, a lot of consumers who really aren't too crazy about the idea of the privatization of what was traditionally a very well respected public monopoly in Ontario. They also want to lead the workers at Ontario Hydro to the belief that there are not going to be any job losses as well. That is what they say. That's what they've said. I'm sure we're going to continue to hear the rhetoric throughout this debate this evening and into next week and maybe into the summertime. If we're not able to get through this bill, we may be sitting in July. Who knows?
This is what it really says in the bill: It breaks up Ontario Hydro, it deregulates Ontario Hydro and it brings in the private sector. But there isn't any assurance in that bill that things are going to be any better here in the province by taking those steps than they have been with Ontario Hydro for all these decades. There is no guarantee in Bill 35 whatsoever for consumers that rates are going to go down.
The promise with respect to a cleaner environment is only as good as this government's commitment to the environment. You'll recall that last night I spoke extensively about this government's sorry record with respect to environmental protection, a record that has been the highlight of the Environmental Commissioner's report, one that I know this government isn't proud of.
It also doesn't say how the stranded debt is going to be dealt with. My fear is that the stranded debt is going to be socialized, that future profits are going to be privatized, that big business and big investors are going to benefit; they're going to get the gold, and it's consumers who are going to get the shaft. That is what I fear is going to happen. You know what? It doesn't need to be this way.
To talk specifically about the stranded debt, part V of the act sets up the Ontario Hydro Financial Corp. This is a non-share capital corporation, and its purpose is to manage and extinguish the existing guaranteed debt of Ontario Hydro. How are they going to do that? They're going to receive various revenue streams from different sources. There's also in part V of the bill the imposition of a competition transition charge on any person who generates or consumes electricity. So consumers are definitely going to be paying for part of the stranded debt. This charge is only going to take effect after a date that's prescribed by the Minister of Finance. The Minister of Finance has a whole lot of authority to make decisions in this legislation. The competition transition charge, if imposed, is going to be paid to the Financial Corp to reduce the stranded debt and will be terminated at a time when the stranded debt is paid off.
The stranded debt, for those who have a difficult time understanding exactly what that is, is defined in the legislation - it's actually a defined term - in section 79. "`Stranded debt' means the amount of the debts and other liabilities of the Financial Corp that, in the opinion of the Minister of Finance, cannot reasonably be serviced and retired in a competitive electricity market."
You might ask yourself what the heck that means. First of all, we have to know what is considered to be a competitive electricity market, because that isn't something we've had here in Ontario, and it's going to take a little bit of guesswork, I assume.
Last night, the Minister of Energy in his speech basically said that he is going to come out with a discussion paper next month some time that indicates how the stranded debt is going to be figured out - he's not going to tell us what it is; he's just going to tell us how he'll be able to figure it out - and that some time in 1999 - which is a bit of a coincidence, because I think the Premier has said there might be an election in 1999.
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We're being asked to pass Bill 35, a bill for which the promises that have been made by this government are solely dependent upon the determination of what the stranded debt actually is. They're asking us to accept these promises based on the assurance that their estimation of what the stranded debt is going to be some time in the future is going to result in all of these benefits being achieved. I have a difficult time swallowing that.
Part of the reason is that right now we don't know anything about how much that debt might be. There have been some estimates that it may be $15 billion. Mr Farlinger from Ontario Hydro says that it could be as much as $20 billion or $30 billion. We don't know anything about what it might be. We don't know whether it's going to take into account the decommissioning costs for nuclear power stations or disposing of the waste from nuclear power stations. These are issues that the government is going to have to deal with in determining what the stranded debt actually is.
This is something that is going to have to be estimated. Depending on how the estimate comes out, it's either people who are the consumers of hydro who are going to pay that debt or it's going to get stuck on taxpayers. Those are the two choices: that consumers pay or taxpayers pay. There's no other option out there. If the government overestimates the stranded debt, and therefore takes too much off the books of Ontario Hydro, then Ontario Hydro will have a big advantage over other competitors. That will mean that other competitors aren't going to move into the Ontario market, and because of that, consumers aren't going to benefit from lower rates either. On the other hand, if Ontario Hydro is saddled with too much debt, then they're not going to be competitive and they're likely to fail.
I hope the government members and the people who are viewing can imagine a situation where Ontario Hydro might be subject to failure, or its successor companies, based on Bill 35. It's a scary thought. If Ontario Hydro fails, they no longer have the capacity to service that outstanding debt. What happens to it? We, as taxpayers, are going to end up paying those bills. If the choice is consumers paying it, that means consumers large or small pay towards that stranded debt. So it doesn't matter how big a consumer you are, you're going to end up paying it. If you are a taxpayer, though, and get stuck with this bill, you are going to pay it whether or not you consume electricity; and it doesn't matter how much electricity you consume, if you're a taxpayer, you're going to end up paying the bill.
What I fear is that because of the way this is set up in Bill 35, there is going to be an opportunity, a loophole, for large consumers of electricity in Ontario to avoid having to pay their share of the stranded debt. You know what happens if those large consumers aren't paying their share of the stranded debt? People like you and I are going to get stuck with it. That's not a prospect that I am really looking forward to.
The other concern I have is that if Ontario Hydro turns out not to be competitive, there is going to be the serious threat that the only way to deal with that is to sell it off, to privatize it. This government says that's not their intention, they're not talking about privatization. They say, "Even if we were going to talk about it, it's not for five years down the road." But, as I've indicated, this bill does not provide any iron-clad guarantees that privatization isn't just over the horizon for this government.
One of the reasons I'm concerned about this, not only because of the guesswork that's involved in the stranded debt and what might happen if in fact they're wrong, is one of the steps that this government has taken by appointing Sir Graham Day to the Hydro board of directors. "Who is Sir Graham Day?" you might ask. He was what we like to call a serial privatizer. He was involved in Great Britain with some of the biggest privatizations that ever took place in Great Britain. He was involved in a company called PowerGen. He privatized that company and the share prices went up by 218% during the time he was there. The company's operating profit per unit of electricity doubled at the same time and the effect that had was to make a whole lot of people rich.
I think there are a lot of big investors who are salivating at the opportunities they see with respect to the breakup of Ontario Hydro, and bringing Sir Graham Day on to the board of directors at Ontario Hydro really gives us an indication of the direction this government is going.
What the privatization of PowerGen in the United Kingdom did was really take the British government to the cleaners. There were a lot of people who earned big profits from the sale of public assets. That's not something that I want to see here in Ontario. I want to be assured that Mike Harris is not going to sell Ontario Hydro assets at fire sale prices. We need to have some assurance that is not going to happen.
I've been reading a little bit about British Energy, another company from Great Britain, and they're actually involved. They're negotiating in the background somewhere, trying to move into the Ontario energy market. This is an interesting article that was in the Toronto Star on May 20 of this year. It starts out by saying, "The latest moves by British Energy PLC, the nuclear company, show that your physics teacher was right - power abhors a vacuum."
They're seeing this opening in Ontario Hydro and they want to move in and fill it. All of those who deny that British Energy is not actually negotiating for the purchase of nuclear power plants, I think they might be living in a vacuum. I have no doubt that this is actually happening, notwithstanding that denial. The fact is that British Energy's vision is out there, it's being discussed. It's not just a vision; they have 15 people who are working in an office here in Toronto. This is something they are actively working on. They of course don't think Hydro is going to be privatized lock, stock and barrel; it's not going to be sold for fire sale prices.
I know the member for Huron is quite concerned and doesn't believe that this could possibly happen. It probably is not going to just be sold out completely, but there is room for people like British Energy to move in and scoop up pieces of Ontario Hydro and I'm sure they expect they're going to get a good deal when they do it. Whether that's going to happen or not is something that only Mike Harris and the whiz kids in the corner office have any idea is going to happen.
This government has the power to define the terms of this discussion, the discussion about how companies like British Energy are going to move into the Ontario market, but they're not talking about that discussion. They're not putting in place parameters for that discussion. All they're doing is just giving us their vague denials that this isn't something they're thinking about and, if they do, they're not going to think about it for five years. But the fact is that these companies are in Ontario, they're going to continue to come here, they're going to be sending their lobbyists, they're going to be attending the committee hearings, they're going to be coming to meet with members of the Legislature and bureaucrats at the Ministry of Energy, trying to see where they can get a piece of the Ontario Hydro business.
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I believe that we as legislators have an obligation to ensure that the discussions that may be taking place about the potential privatization of Ontario Hydro have some parameters. I don't think we should be talking about the privatization of Ontario Hydro, but if that's something Mike Harris is talking about, if that's a road that he is leading us towards, then it is his responsibility to ensure that he lays that on the table and that people understand that's what he's doing, and he puts some limits on those discussions.
Last night when I was speaking, I was talking about the concerns I have for consumers in Ontario. That's really the biggest group out there that we need to be concerned about. This government likes to talk big about how "You guys only cater to special-interest groups." I have no apology for that, because the special-interest group that I'm concerned about in this case is consumers of electricity in the province. If you want to consider them to be a special-interest group, so be it. I want to look out for their interests before I want to be looking out for the interests of big money like British Energy and big investors on Wall Street and Bay Street who are salivating at the opportunities to move in and gobble up huge parts of the Ontario Hydro traditional public monopoly and benefit from it for their own shareholders.
The bill says that there may be some protection from unscrupulous gas and electricity brokers. That's something new that they're putting in this bill, that gas brokers are going to be regulated in addition to electricity brokers. They say there will be more freedom of choice, but we know what happened when the gas broker business opened up: There were all kinds of fly-by-night brokers that entered into the market, went door to door, took advantage of seniors and those who were vulnerable and said: "We're going to give you cheap gas. Just sign right here. See you later." A lot of those companies disappeared. People lost their money. A lot of people thought they were going to get lower gas rates, but hey, guess what? When the bills started to come in, they couldn't believe they were being charged a lot more than Union Gas would charge. They were being gouged, and this government was letting them do it.
We also saw recently, with the deregulation of Union Gas, that the cost to rent a hot water tank may go up by 44% for up to 875,000 gas water heater rental customers in the province. That's not bad enough, but there's up to 90,000 people, mostly in northern areas of the province, probably in Cochrane North and other places, who are not going to be able to rent a gas hot water heater at all. They're going to be cut off completely. That's what happens with the deregulation of the industry. We need to make sure that doesn't happen as a result of the passage of Bill 35. We want to make sure that there aren't fly-by-night electricity brokers out there doing the same thing.
I just want to let people who are watching tonight know that you can't buy electricity from anybody who shows up at your door yet. This isn't in effect now, and even if somebody comes and tries to sell it to you, you can't buy it.
Mrs Helen Johns (Huron): It's illegal to sell it.
Mr Lessard: The member for Huron says it's illegal to sell it, but that never stops people from trying to make a few bucks from seniors in this province if they think they can get away with it.
In section 56 of the bill it says that in order to sell in the province of Ontario you have to have a licence, and there are some conditions that have to be in that licence as well. It says in section 69 some of the conditions that may be included in a licence. Specifically, it says in clause 69(2)(i) that you may have to specify information about the emissions caused by the generation of electricity, and that gets back to how effective this government's environmental protection agenda is. The problem is that it says you "may" have to comply with these sorts of conditions. It also says that they "may" put conditions in the licence that there be minimum and maximum prices, so there's no assurance that prices are going to be regulated at all.
There is one provision that says every licence shall be deemed to contain a condition. I'll let you know what that condition is. It says, "that the licensee comply with the market rules that apply to that licensee." Market rules are defined in section 55. It says, "`market rules' means the rules made under section 30 of the Electricity Act." So you look at section 30 of the Electricity Act to see what that has to say. It says - you've got to bear with me here for a minute.
Mr Steve Gilchrist (Scarborough East): Actually, you don't have a minute.
Mr Lessard: You're right, I don't have a minute. It says that market rules may include those that are determined basically by regulation. So we don't have any idea what the market rules are.
That really outlines some of the concerns I have about this bill. I have serious concerns about protection of the environment, protection of the interests of consumers and how the stranded debt is going to be determined. I await being convinced, but I have serious reservations about supporting this bill.
The Acting Speaker (Mr Joseph N. Tascona): Questions or comments?
Mr Bart Maves (Niagara Falls): It's a pleasure to rise and speak a little bit in response to the member opposite. My riding is an interesting one because the Sir Adam Beck plants were originally built there. A long time ago, we had a lot of abrasive companies and chemical companies come to Niagara Falls because of proximity to abundant, reliable and cheap power. Over the years the two governments opposite were in office, the cost of power in this province went up so much that we lost a lot of those businesses. Ohio Brass and Treibacher are gone, Cyanamid is gone, all kinds of very good union, high-paying jobs are gone because the members opposite didn't have the backbone to take control of Ontario Hydro and keep rates down.
There was a time in this province when a monopoly was the right way to organize the hydro industry. When we were building massive power plants, when we needed to build transmission lines all across this province, it was understandable that a monopoly could be used for that. But everyone knows that the most inefficient economic system there for consumers is a monopoly. The NDP is completely out of touch with everyone on this, including the Power Workers' Union. Everyone in this province understands that we have to break up this monopoly and we have to move to a competitive system. It's the only way we're going to attract some of those industries back to my constituency, back to Niagara, back to Ontario, and bring some of those jobs back. Everyone understands this.
We've gone through all kinds of studies, we've had the Macdonald commission, we had another report after that, responses, we had a white paper, we had more responses and then we had a bill. It's time to move forward. The NDP wants to continue to move backwards. Even the Power Workers' Union doesn't want to follow their lead any more.
Mr Mike Colle (Oakwood): I think the member for Windsor-Riverside made some very salient points in terms of the potential impact this bill might have on consumers. One of the things he referred to which has been of great concern to many citizens across Ontario is what happens if you deregulate in terms of people who enter the field. We've had natural gas deregulation over the last couple years. We've had all kinds of fly-by-night brokers trying to peddle so-called contracts for natural gas. There's even a report in the London Free Press about people already going door to door, seeing if they can hustle some kind of contract for electricity. I just hope, as the member for Windsor-Riverside said, that there's some way of protecting consumers as we go through this massive transition in Hydro. There is agreement that there have to be some changes. There are some serious concerns, especially when you've got a debt of possibly $32 billion that's going to be dumped on the taxpayers, and that's got to be delineated.
The 42 years of Tory reign helped set up a lot of this debt that we have. I hope they will repent and admit their sins over those 42 years when they let Hydro become an unwieldy monster. This government loves things that are big. They love big government and they love big power brokers, so I hope they stop and protect the little consumer. The big guys don't need the protections; it's the little guys we're worried about.
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Mr Len Wood: I want to congratulate and thank our member for Windsor-Riverside, Wayne Lessard, for doing the leadoff for the NDP caucus on this massive Bill 35, which opens up far more questions than answers. You've got a bill that has 160 pages, and here we are on a Thursday night, debating second reading late into the night. I want to congratulate the member for Windsor-Riverside for explaining and for asking some of the questions we haven't got answers for: Is this privatization through the back door? It's possible that it is, because we don't have the answers.
Right now the government is saying that we don't know what the stranded debt is going to be. We're going to go out and get a busload of financial whizzes and we're going to bring them under Ernie Eves's financial department to try to figure out what the stranded debt is going to be. You bring in a bill like this and debate it late into the night and you don't answer the questions our member for Windsor-Riverside is asking. It opens up 160 pages of questions that are not answered now and maybe never will be answered. But we know that under the old Progressive Conservative Party, the debt of Ontario Hydro was allowed to get out of control.
You talk about when Bill Davis was Premier. He said, "We're going to build Darlington for $4 billion." It ended up that David Peterson said, "We'll approve it right up to $14 billion." When the NDP got elected, that was the bill, between $14 billion and $15 billion for building a nuclear power station that was not needed. Darlington was not needed. What a waste of money spent over the years. Now we're here and Mike Harris is trying to correct the record of the problems that happened over 42 years, especially during the late 1970s and 1980s under Bill Davis.
Mrs Johns: I'd like to remind the members opposite that the member who spoke was not on the select committee, but I think the people at home recognize that Hydro has been mismanaged for the last 10 or 15 years. All parties say that it has been mismanaged and no one party is at fault here. It is in some ways unfortunate that Mr Laughren isn't here, because he understands very clearly that in the time of your government-appointed chairman, Maurice Strong, what happened was that a number of people from Bruce were let go who were really needed. I think the people at home need to recognize that this company has been mismanaged and what is important is to move forward today and ensure it is managed better, and this government is moving forward to do that.
When the member talks about the stranded debt, I think it's also important for the people at home to recognize that the debt is there today. We ratepayers are paying for that debt today. Ontario Hydro pays back approximately $600 million every year, and will for the next three years, to pay that debt down. That same money will be going to pay off the stranded debt and it will be going to help reduce this burden that's hung around the taxpayers' necks.
I'd also like to say that the Liberal member should recognize that his party is in favour of this bill and he should find out from his own members why they're in favour of this bill. There are very good things about this. Consumers are going to be protected. Marketers are going to be licensed both on the electricity side and on the gas side for the first time in history. The other two parties could have done this and they didn't.
The Acting Speaker (Mr Marcel Beaubien): Response, the member for Windsor-Walkerville.
Mr Lessard: I want to thank the members for Niagara Falls, Oakwood, Cochrane North and Huron for their comments with respect to my remarks.
The member for Niagara Falls said that the price of power has gone up, and that's true, it has gone up, but the debt has continued to go up as well. So what's he saying? That the price of power should have been lower and the debt been higher? I don't understand what he's trying to say. He says previous governments didn't have the backbone to deal with Ontario Hydro, and that may be true. It starts back with Bill Davis and way before him when they decided that they were going to build the Darlington nuclear power plant and saddle us with a debt of over $14 billion. It was one of the biggest boondoggles the Tory government has ever been involved in. It's a legacy that they cannot avoid having to deal with.
The problem with this Bill 35 that they've brought here to try and deal with it is that it doesn't make any sense to break up Ontario Hydro unless we can be assured that the rates are going to go down. None of this makes any sense if that doesn't happen.
The member for Cochrane North talks about the stranded debt, and that's really the key here, how that stranded debt is going to be dealt with. The member for Huron talked about that. I'd like to know how much it's going to be. I'd like to know why it is that we are going to be expected to pass Bill 35, the success or failure of which is entirely dependent upon the stranded debt, when we don't know how much it is, when we're going to find out how much it is and why it is that we're expected to try and accept this bill without knowing that.
I am concerned about the impact that this is going to have on consumers. My fears are that rates are going to go up and the environment is going to get dirtier. Those are my concerns.
The Acting Speaker: Further debate?
Mr Joseph N. Tascona (Simcoe Centre): I'm pleased to speak on Bill 35, and I think it's important to know what the title of this bill is as we enter this debate. It's An Act to create jobs and protect consumers by promoting low-cost energy through competition, to protect the environment, to provide for pensions and to make related amendments to certain Acts.
This bill, as introduced by the Honourable Jim Wilson, Minister of Energy, Science and Technology, is a bill that is long overdue. I'm going to speak on two parts: municipal electrical utilities and the Ontario Energy Board's regulatory role.
With respect to the municipal electrical utilities, a competitive market would provide customers with greater choices and more services, and will offer some real opportunities to municipal utilities to do things in new ways. First of all, utilities will have to decide what business they want to be in. The proposed legislation spells out clear business mandates consistent with the Ontario Business Corporations Act. Utilities would be responsible for separating their competitive businesses from their monopoly wires business. Passage of the Energy Competition Act would allow utilities to operate on a commercial footing and respond to opportunities in a rapidly changing market. At present, Ontario Hydro approval is required for many operational business activities and expenditures.
I can tell you that in my riding of Simcoe Centre, we have the Barrie PUC, we have the Bradford-Gwillimbury PUC, we have Innisfil Hydro. They're all very well run municipal electrical utilities, but they're looking for ways to increase their ability to operate and become more competitive and looking at economies of scale, so they welcome this legislation.
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In an open market, electricity companies need commercial flexibility to compete. The current regulatory relationship with Hydro would be replaced with a more streamlined, efficient accountability mechanism, one that is more responsive to the needs of their shareholders, which is the customer.
Within a regulatory framework that ensures customer protection, many distribution utilities would want to have greater powers to pursue commercial activities in the unregulated part of their business. Shareholders and municipalities would also be able to oversee the utilities in the same manner as they would independent companies, which ensures a level playing field for new investment.
The act provides all municipal utilities with business flexibility and a structure that invites public-private partnerships and joint ventures. The intent of the proposed reforms is to make MEUs more businesslike and efficient in providing services to their local communities.
New commercial powers and responsibilities would mean that all municipal utilities would enjoy a greater degree of autonomy than before. At the same time, the municipal council is the shareholder of the new corporations with the flexibility to choose their own corporate governance structures and accountability relationships. This approach would best meet local needs and circumstances.
As a former municipal councillor, I welcome those changes. I think they're long overdue.
Efficiencies can be realized through the proposed reforms to the municipal distribution system. Studies undertaken suggest potential economies by as much as 20%. For example, a study by the Municipal Electrical Association and Ontario Hydro estimated potential savings in controllable distribution costs of 8.5% through savings in billing, collection and administration and adoption of best practices.
Other countries have estimated potential efficiencies of restructuring. Real distribution costs per customer in New Zealand fell by almost 20% between 1989 and 1994 as a result of restructuring. Another study estimated that Norway's distribution system could realize 25% savings.
Under the proposed legislation, municipal utilities would have more purchasing options than they have today. The smaller utilities which have limited purchasing power would have a number of options. They could get together to form a power purchasing cooperative. They could form alliances with larger utilities to purchase power for them. They could sign up with a power marketer, such as Enron, or a generator, such as Ontario Hydro's successor generation company, or they could purchase directly from the spot market administered by the Independent Electricity Market Operator, also known as IMO, assuring that they get the hourly competitive price.
Under current legislation, municipal utilities are not free to merge with other utilities outside their municipal boundaries. I've heard from my constituents in Simcoe Centre that they would like to be able to look at this option. The government's proposed legislation would remove legislated barriers to local restructuring and permit utilities to merge immediately and beyond their boundaries, if that is in the customer's best interest. That's the fundamental point: These local MEUs will be looking after the customers' interests.
Under proposed legislation, there is a default supply provision. All customers will continue to have access to electricity at market-based prices through their current supplier. Customers who leave for the market can return to their original distributor. However, the Ontario Energy Board would have the authority to exempt distributors from this obligation, provided it is satisfied there is sufficient competition among retailers and that consumers in that area would continue to have access to electricity. Distributors will still have the right to disconnect customers whose payments are in arrears, but reasonable notice to consumers would be required.
Bill 35 would continue the current rate protection for rural and remote electricity customers and would ensure that distribution companies continue to connect and serve their customers. Consumers within Ontario's electricity system would continue to contribute to this program. With the approval of this bill, the new Ontario Energy Board would be responsible for regulating the wire tariffs and could assist in limiting rate differentials. In anticipation of amalgamations at the local distribution level, the government could extend eligibility to other low-density customers or areas of the province. With the passage of this bill, the stage will be set for municipal electrical utilities to conduct business in new ways, to explore new business opportunities while ensuring safe and reliable energy supplies at the lowest possible cost to their customers.
At this time, I would like to speak about the Ontario Energy Board's regulatory role, as will be set up through the Energy Competition Act under Bill 35. Their new role is this: In a competitive electricity marketplace, it is proposed that the Ontario Energy Board, also called the OEB, would be the independent regulator for the electricity sector and continue to be the independent regulator for the natural gas sector with an expanded mandate. Bill 35 would strengthen the OEB's role in order to better protect electricity and gas consumers and to ensure that efficiencies achieved in the monopoly parts of the industry benefit all customers.
The board's role would be the following: to protect consumer's interests regarding prices, reliability and quality of electricity service; to facilitate a smooth transition to competition; to provide non-discriminatory access to Ontario's transmission and distribution systems; to facilitate energy efficiency and the use of cleaner, more environmentally benign energy sources; to promote economic efficiency in electricity generation, transmission and distribution; and finally, to facilitate the maintenance of a financially viable electricity supply industry. The new legislation proposes that the Ontario Energy Board regulate tariffs for the remaining monopoly parts of the electricity system. The transmission and distribution of wires would be regulated in a manner similar to the current regulation of natural gas.
The other component, or I should say the other role, that the Ontario Energy Board has is with regard to licensing. Under the proposed rules, all transmitters, distributors, generators, purchasers and retailers of electricity wishing to participate in the new market would require a license from the Ontario Energy Board to operate. This includes marketers selling electricity or natural gas to residential consumers. This is a significant protection to the consumers in this area. The draft legislation provides for the government to set out general or specific conditions which the Ontario Energy Board would require in licences for electricity transmitters, distributors and retailers. These could include regulations to do the following: (1) require electricity retailers to disclose information on the type and amount of emissions from the generation facility from which the electricity being sold was produced; and (2) require generators selling power in the Ontario market to meet specified environmental standards.
Licensees would be required to follow specified industry codes and technical and market rules, and to meet performance standards and targets. The new Independent Electricity Market Operator, also known as the IMO, would also require a board licence to run the electricity transmission and exchange system. The Ontario Energy Board would be able to suspend or revoke licences or stop anyone from operating without a licence. At present, there is no mandatory licensing of energy marketers in Ontario.
Licensees would be able to appeal decisions on licences. This is a fundamental change with respect to the Ontario Energy Board being given the power to suspend or revoke licences or to stop anyone from operating without a licence. That's a fundamental standard for this industry.
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Licence conditions would include provisions relating to duration of licences, duration of agreements with third parties, rate methodologies, accounting methods, default supply obligations and environmental information reporting requirements.
When necessary, the Ontario Energy Board could issue interim licences to ensure that requirements and standards are met so that customers are provided with a reliable supply of electricity.
To address the abuse or possible abuse of market power, the Ontario Energy Board could also amend a licence. So they have the power to revoke, to stop anyone from distributing electricity, to issue interim licences and also to amend a licence.
There are also serious penalty provisions which would apply to any marketer operating without a licence or for those not operating in compliance of the requirements. These are very firm standards.
The other area I'd like to speak to with respect to the Ontario Energy Board is the setting of rates. Under the proposed legislation, the Ontario Energy Board would set and approve the rates of gas utilities for the sale, distribution, transmission and storage of gas. The board would approve or fix rates for the transmission and distribution of electricity.
The Ontario Energy Board would also regulate retail rates and the provision of default supply so that if consumers do not choose an alternative supplier, they would continue to have access to electricity through their current supplier. That's very fundamental, and I'll repeat that: The board would also regulate retail rates and the provision of default supply so that if consumers do not choose an alternative supplier, they would continue to have access to electricity through their current supplier.
The Ontario Energy Board would also continue to provide rate protection for rural or remote electricity customers. Present customers would remain at current levels of protection, provided they continue to meet eligibility criteria.
The other responsibilities of the Ontario Energy Board include the following:
In addition to its licensing and rate-setting functions, the Ontario Energy Board would also review and approve proposals for the acquisition of transmission and distribution systems and for the acquisition of generation facilities by electricity transmitters and distributors to ensure that such purchases don't adversely affect market competition. That's a very fundamental change in addition to its licensing and rate-setting functions: the power to review and approve proposals for the acquisition of transmission and distribution systems and for the acquisition of generation facilities by electricity transmitters and distributors to ensure that such purchases don't adversely affect market competition - a very fundamental role for the Ontario Energy Board.
The Ontario Energy Board would also have broader powers to set and enforce codes of conduct relating to the businesses of utilities and marketers selling gas to residential consumers. Those are significant protections for residential consumers with the role of the Ontario Energy Board.
The Ontario Energy Board would ensure that the distribution companies fulfil their obligations to connect and serve their consumers.
The focus of this act is certainly to provide protection for consumers by providing and promoting low-cost energy through competition. That's the fundamental theme of this Bill 35, and it's also fundamental that it is looking to promote fairness and competitiveness. The Ontario Energy Board would also monitor electricity sector markets and report its findings to the Minister of Energy, Science and Technology.
In closing, I'm very pleased to have been able to speak on Bill 35 in two fundamental areas. I spoke about municipal electrical utilities, MEUs. This is a very fundamental change. I know from my riding that the public utility commissions were looking for these changes to ensure that they can compete, that they can expand their operations, and to operate fundamentally in a freer market, and they welcome these changes. I would also say that was after a lot of consultation with the Municipal Electrical Association through this process.
Finally, I've had the privilege of speaking about the new role with respect to the Ontario Energy Board, their regulatory role with respect to the issuing of licences, the setting of rates, but also fundamentally protecting consumers in this fundamental change with respect to dealing with energy competition.
I'm very pleased to have spoken on Bill 35 and I fully support it.
The Acting Speaker: Questions or comments?
Mr Mario Sergio (Yorkview): I am glad to comment on the presentation by the member. I have to say that he has touched on a number of places where the essential points of the bill address the main issues, and that is, how ultimately the changes will affect the consumers, the taxpayers out there. Just a few comments, because the bill is long and it's very complex as well.
The member has been addressing the regulation tariffs, the licensing, the safety, the environmental aspects and also the open door to privatization, which I have to say has not been touched. It is one of the concerns we have expressed in this House - and I think the members of the government know that as well - and that some of the outside agencies, individuals or groups as well have expressed with respect to privatization once Hydro is totally divided. The two major portions of this division include the commercialization, the selling, the retailer and the supply of the power itself. So there are those concerns in the bill and, as the member correctly didn't mention those issues, we see them as being unaddressed in the bill, especially when it comes to the environmental issue.
I don't have to tell you the record of this government when it comes to environmental issues. If the government cannot take care of environmental issues now that it's a government, how will a private enterprise, without any control, without any direction or legislation from this government, address that very important environmental aspect? So this is one of the areas where we do have a concern.
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Mr Tony Martin (Sault Ste Marie): No matter how you cut it or how you present it or how you say it, this bill, for all intents and purposes, is the beginning of that slippery slope - I know the folks across the way don't like us to use that term; they figure we use it too often, but you've got to call it what it is - towards the privatization of Ontario Hydro.
I think anybody who knows the history of Ontario Hydro knows why Ontario Hydro was developed in the first place, although it has developed some significant difficulties along the way, not the least among them a decision by a previous Conservative government, supported by a Liberal government, to build a huge nuclear energy plant that has cost us mega-dollars over the last number of years and now has us in a place where we're up to our eyeballs in debt.
The only solution the government of today can come to in order to resolve that very difficult problem is to hive off those parts of this corporation that will generate profit and eventually put them out there to the private sector so that the friends and benefactors of the Tory government can make all the dollars that come with that kind of activity, and to socialize the debt, turn the debt back on to the shoulders of the taxpayers, the energy consumers of Ontario.
I just have to tell you that unless you come up with something better, something more substantial, this just isn't going to cut it with our caucus, and at the end of the day, although we're going to listen to the debate in this House and hopefully hear something beyond what we've just heard as to why we should be willing to support this bill, we're probably not going to be able to find it in us to support it.
Mr Maves: I want to congratulate the member for Simcoe Centre on his very wise remarks. He always does a very good job when speaking to bills in the Legislature, and tonight is no exception. One of the things he talked about was rates. I want to quote from a Hansard from this place on September 23, 1991, from Dalton McGuinty, currently Liberal leader: "There is a direct correlation between Hydro's rates and our rate of unemployment in Ontario. As the rates go up, so will the rate of unemployment."
I tend to agree with him. If we look at the Ontario Hydro rate increases over the years, we can see that in the years under the Liberals and NDP we had substantial increases under the Liberals but massive increases under the NDP - 8.5%, 12%, 8%. Then you come along and you see someone with the backbone of a Mike Harris, who has the courage to run on a commitment to freeze Hydro rates, and sure enough, with the commitment, in 1995, 0%; in 1996, 0%. That will continue.
There's another way to reduce Hydro rates. I spoke earlier about how important that is to jobs. Mr McGuinty understood that it was important to jobs. The other way to reduce Hydro rates is to break up this monopoly and move to a competitive system. A competitive system is a system that's based on many generators and many distributors competing with one another to safely and reliably provide energy to many consumers at the most competitive market price. Lo and behold, as we take this step, not only are we talking about 0% now, but here we have an article, "T.O. Hydro Bills May Drop 20%." James Wallace says, "Toronto consumers should be the first to benefit from plans to deregulate Ontario Hydro."
Mr Sean G. Conway (Renfrew North): I want to commend the member for Simcoe Centre. I thought he made a very good speech. His references to the opportunities for efficiencies and savings in the distribution end, a point to which the last speaker, the member for Niagara Falls, made reference, is a good one. I do believe there is going to be an opportunity, particularly in places like Metropolitan Toronto, that is, the greater Toronto area, to make significant savings on the distribution account. That has to be recognized. It's not going to be easy, it's going to be some of the most difficult political turf war that we will see in this very complicated business, but it's a good point.
On the other hand I have to ask, what is really going to happen to Ontario Hydro retail? There is that vast expanse, the old Huron-Ottawa tract, that belt of mid-northern Ontario. Who's going to want to be the supplier and the distributor out in the most rural reaches of Muskoka, north Hastings, north Addington, southwest Renfrew, southeast Nipissing? There's a lot of moose pasture and there's not a great population density. I don't expect the market is going to line up to offer us a lot of people who are going to want to get into that business. It's going to be a challenge, I think it's one we can probably meet, but there are one million people served by Ontario Hydro retail, many of them in very rural environments.
Yes, there will be economies of scale in the greater Toronto area and even in northern areas in and around Thunder Bay and Timmins, but I don't know when you last drove from Calabogie to Kaladar, but there's a lot of territory, and being in the electricity distribution business is not going to give you a very big return on your investment.
I want to say to the member for Sault Ste Marie that he might want to read a speech by the sainted Maurice F. Strong, then chair of Ontario Hydro, to the Canadian Electrical Association, July 4, 1995, before this debate is over, because the sainted Mr Strong, no enemy of the former government, certainly had some very radical things to suggest about new possibilities.
The Acting Speaker: The.Chair recognizes the member for Simcoe Centre.
Mr Tascona: I'd like to thank the members for Yorkview, Sault Ste Marie, Niagara Falls and Renfrew North for their comments.
With respect to the member for Yorkview, he focuses on the environmental impact that he perceives, or I would say imagines, could result from Bill 35 and provides no evidence in support of his perceptions. But I would point out that the Ontario Energy Board has a very significant role with respect to protecting the environment. Their role would facilitate energy efficiency and the use of cleaner, more environmentally benign energy sources. Also, the regulations in the statute require electricity retailers to disclose information on the type and amount of emissions from the generation facility from which the electricity being sold was produced and, of more importance, require generators selling power in the Ontario market to meet specified environmental standards. That should satisfy the member for Yorkview once he reads the bill.
The member for Sault Ste Marie focuses on consumer protection. It's very clear that the Ontario Energy Board's regulatory role would strengthen their role in fact to better protect electricity and gas consumers and to ensure that efficiencies achieved in the monopoly parts of the industry benefit all customers. Their role would be to protect consumer interests regarding prices, reliability and quality of electricity service. Also, they would have broader powers to enforce codes of conduct relating to the businesses of utilities and marketers selling gas to residential consumers. So there are significant protections for consumers in this bill.
In closing, I'd just like to say that the members for Niagara Falls and Renfrew North certainly have hit it on the nail in that there will be decreased energy costs as a result of the bill.
The Acting Speaker: Further debate?
Mr Colle: I will share my time with the member for Downsview.
Bill 35 raises some intriguing questions. Our party is more than willing to look at and examine it. We're looking forward to the committee hearings going across the province in examination of Bill 35. It is a real watershed bill in terms of one of the most important things that affects the economy and the social wellbeing of this province. Everybody, big and small, in this province is going to be affected by Bill 35. I hope the public will join in the scrutiny of this bill, which I think will make it a much better bill.
As we've gone through a form of deregulation, for instance, in the telephone business, some of that is very trying on the consumer. A lot of consumers really don't know who to go to in terms of a more affordable, better service in telephone rates, and a lot of the ads, a lot of the come-ons, the promos on TV, are quite confusing and perplexing.
If you also look at what happened in recent years over the deregulation of natural gas, with the fly-by-night, door-to-door scammers which this government didn't do anything about, it's critical that, as we go through this massive transition on Hydro, there be a significant part of government that protects consumers as we go through this change, because the changes are enormous; I think they're the most significant we've had in the 90-odd years we've had Hydro in this province. That's the commitment that should hopefully come out of these hearings and the screening that takes place, that there is a body that protects the consumers as we go through this transition, because we can rest assured, as we know from the US experience, that the big players will be taken care of.
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As you know, in Connecticut and New York state the one thing that's very apparent is that this whole field of deregulation of and competition with public utilities is a gold mine for lobbyists. In fact, I'll read from the New York Times earlier this year where they said, on April 19, "The idea of ending electrical utility monopolies and opening the $200-billion" - and that's a lot of money even in Sarnia - "power market to competition is a national policy craze". It's one of the flavours of the month, we know. "And while no one is quite sure how it will work, one thing is certain: It's a gold mine for lobbyists."
You know that every electrical lobbyist in North America is lined up at the door of the whiz kids. They're trying to find out how they can be part of the action. That's why I say these lobbyists are going to make sure the big guys on Bay Street are going to be well protected as we go through this transition. What our party is worried about is, who is going to be looking after the interests of the ordinary person who is worried about paying that hydro bill? Who will be lobbying for them? It certainly won't be the high-priced, Bay Street lobbyists that sometimes charge you 5,000 bucks an hour. They won't be lobbying for Mrs Jones on Main Street, but they'll be lobbying for the big guys on Bay Street.
That is one thing I hope people will be able to bring some scrutiny to. What is the role of these lobbyists? This government, two or three years ago, promised the registration of lobbyists and the control of these lobbyists. We haven't seen any of that yet. Maybe they should bring in that control of those Bay Street lobbyists before this bill becomes law, to see who are the lobbyists behind this huge undertaking we're about to enter into. I certainly would like to know who they are so we'll see who is influencing the government on this.
As it says here in the New York Times, "What makes the bill such a magnet for lobbyists is that it touches so many moneyed interests." In other words, they know that this kind of legislation could have a huge impact on financial markets and on our major corporations. So the major corporations and the banks will be hiring the best lobbyists money can buy to protect their interests. That's why it's critical that the government recognize that the public interest has to be protected and that the ordinary consumer has to be protected as we go through this massive change we're about to embark on. This change will only be beneficial to the public if it's a transparent change and an understandable one.
The big concern is that the massive changes that sometimes take place become very convoluted as far as the public is concerned. They're not able to be protected when there is too much change without public protection. The public should be protected as we go through this change, because Ontario Hydro, this public utility, belongs to the people. It doesn't belong to government, it doesn't belong to big business; it belongs to the people of Ontario. It's one of our historical heritages that we have, and I think it is incumbent upon this government to remember this at all times. The benefits of this change as we go through it should always go back to the people first, ordinary people, and not to the moneyed interests who will be there lined up. God love the people with big dollars for all their successes, but there will take care of themselves, and I think the government's got to realize that you also have to put in infrastructures so that the consumer will be protected.
That's been certainly the case in point in the United States because money is going to be here, big money. We're talking about, in the United States, $200 billion. Here we're talking, we throw around, $30 billion in stranded debt as if it's something on the Visa bill. We're talking about the future of the province here, and that's why I think it can't be business as usual. There have got to be steps whereby the consumer will be protected.
Because in the long run, as you know, the mistakes we've made in the past - and I know people like to talk about the mistakes made in recent years, but I say the 42 years of Tory rule in Ontario certainly weren't perfect. Some of the critical mistakes that they made in those 42 years are what we're paying for today. It's critical that we look upon this as a shared responsibility whereby we do the right thing and we do it in a transparent way where the consumer is protected.
I'll read you another quote from the New York Times where they talk about the American experience. As you know, this government and we as Canadians always try to find out from the mistakes they make in the Unites States, and maybe in England, to improve upon them and hopefully we can learn by their mistakes. One other comment from another New York Times article says:
"They call it `a convulsion of huge importance' and say that it `will cost the public upwards of $500 billion.' That is the amount, they say, that utilities have tied up in debt on their nuclear power plants and that they would like to pass along to ratepayers and taxpayers."
That's why I come back to the so-called stranded debt. The Minister of Finance is going to be charged with dealing with that stranded debt, whether it goes to Servco or Genco and how long and for how many years and at what rate that has to be paid down. That mechanism is a critical component of this legislation and what happens in terms of the regulations that come out of this bill, that we ensure that the user of the utility isn't charged higher rates because of this massive transition we're going through.
I would hope there would be benchmarks; there have to be guideposts and there has to be continual monitoring of this change as this goes through. Without that, there will no doubt be repercussions as far as the ordinary consumer is concerned, and that is what we have to think about.
A lot of people say, "It's just another bill," but that hydro bill or even something simple like a water bill, can mean the difference between someone on a fixed income making it for that month or not. That's what we forget sometimes, when we see the rosy pictures painted on the financial pages and on these money shows on television. You never see that pensioner on one of those money shows; you never see one of those Bay Street lobbyists visit Widow Jones in the small town of Petrolia or something. Find out what he or she has to do to make ends meet on paying these bills. The bills come in fast and furious, whether it be the cable bill, the hydro bill, the water bill, the property tax bill. As you know, the property tax bills are even delayed for four or five months because this government has messed that all up. A lot of seniors have come to me and say: "Where is my bill? What's happening?" I say: "Phone up Mr Leach. Phone up the Premier. They are in charge now."
That's what we're coming to here. This government is embarking on a precarious adventure. I hope this adventure is not one whereby the consumer is left to fend for himself or herself, because there's so much at stake here. The dollars, the equity, the ethics of this whole adventure have to be closely monitored in every aspect. The critical thing, as we saw from the Niagara casino scandal, is that there be a process put in place first, before all these mistakes are made about conflict of interest, that you don't do the investigation after the fact.
Mr William Saunderson (Eglinton): On a point of order, Mr Speaker: I don't think the member should be referring to the Niagara casino scandal. "Scandal" is not an allowed word.
The Acting Speaker: I will rule that it's in order.
Mr Colle: I know the members of the government don't like the opposition talking freely. They want to restrict our speech. Basically, we've had problems with the bid for the new Niagara casino. They've been reported; they've been investigated twice now. Call it what you want, but there's a problem in Niagara Falls because you rushed into the thing. You rushed into the gambling. Don't rush into people's hydro. This is not your hydro company; it's the people's. Do it deliberately, do it fairly, do it aboveboard, do it transparently. Don't rush into this. You're playing with something that is very important to every Ontarian. Be cautious; be concerned.
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Ms Annamarie Castrilli (Downsview): I'm happy to rise to speak to this legislation. I think we all agree that there is a great need for change in the area of electricity and the electricity marketplace in Ontario. For too long we've been saddled with at least the perception if not the fact of a Hydro enterprise that seems to be out of control, so we support Bill 35 in principle. Any legislation that seeks to bring clarity to the issue, that seeks to make the marketplace a more competitive one in the interests of the consumer is one that bears looking at with great scrutiny. It's with that in mind that I want to place my comments here today.
Although we may agree in principle on (1) the need for this legislation and (2) the need for transparency and fairness, the bill leaves much unsaid, and that is really the crux of the matter for many of us today as we speak to this piece of legislation.
It's obvious that safe and affordable energy is vital not only to the consumer but certainly to the benefit of our economy in Ontario. I would hope that the government at the very least, recognizing that there is an important public interest in this legislation, will allow significant public input through hearings throughout the province to gain the best advice we can possibly get, to make this the best bill possible in this very critical area.
The concerns, however, are these, and they need to be addressed and they will have to be faced by the government.
First, we know that Hydro will be split into two separate arm's-length corporations fully owned by the province. When that happens, there will be an issue of Hydro's debt of some $32 billion. The question, of course, is who is going to bear that debt. Is it going to be the ordinary consumer, will it be the retail and farm electricity? These are questions that are certainly not addressed by the legislation.
Second, it's not clear who will pay for Hydro's $8-billion plan to bring its nuclear plants up to par, something which we understand is necessary and again is not addressed in this particular legislation.
Third, will industry regulators be able to be tough watchdogs, with the power to make sure that the plan that is to be in place does not result in windfall profits for companies and higher costs for consumers? Again the legislation is very silent. There is no mechanism to deal with that.
Finally, I think the biggest question of all for average consumers and taxpayers is, what are the actual benefits for residential and farm customers? It comes down to a very simple issue: Will the ordinary consumer, the senior citizen on a fixed income in this province, who has to contend with payments of all kinds, be asked to pay a higher rate, a rate that he or she may not be able to afford, and will it be phased in, if that's the case, or will it be all at once? These are quite substantial issues for ordinary people.
The reason we're concerned is because so much of the effective practice of this legislation will be left to regulation - regulation that will not be brought before this House, that will not be debated, that will not have the scrutiny of the members of this House, that will not be put to public hearings; in short, that remains the purview of the government and the government alone, and has no significant public input. That's a very serious situation and that's why the question needs to be asked now, so that we can have some assurances from the government.
It's obvious that these are serious concerns. We've seen some of these enunciated in various correspondence, in editorials, in articles. I'd like to focus on some of the ones that make just that point. I read from the Standard of St Catharines-Niagara of Monday of this week, which clearly says: "Where the power will come from and how much it will cost are among the factors still very much up in the air as the energy industry in Ontario grapples with deregulation.... No one is able to say for certain what impact Hydro's so-called stranded debt will have on the cost of flipping a light switch." Then it goes on to quote Tom Connell, managing director of Canadian ratings at Standard and Poor's in Toronto, who said, "In the near term, in the next three to five years, prices are highly unpredictable."
I think that's what consumers are worried about: What does "unpredictable" mean? Will it mean that the extra taxes that will have to be paid by successor corporations to Hydro will be saddled on to the ordinary consumer's bill, and does that mean that in the next three or five years their rates could skyrocket? I think we would agree that that would be an undesirable effect of this legislation and one the government certainly needs to turn its mind to.
The Toronto Star earlier this week also dealt with the issue that there are questions that need to be answered: "Hydro's staggering debt will be apportioned," it says.
There's also debate over whether anyone is looking after the interests of homeowners and whether the government is simply getting ready for privatization. That is again a concern of ordinary people: Is the agenda really to make the marketplace more competitive and to benefit the consumer, or is it simply a question of selling off Hydro to the highest builder at the lowest possible price, with ensuing results for ordinary people?
What price will Ontarians pay for electricity? That's a central question. When this legislation is effected, what price will Ontarians pay? It isn't at all clear what that will be.
In the end, it's not just the ordinary individual who is concerned about this. We know there is no guarantee that rates will be lower. In fact, Bill Farlinger, who heads up Hydro at the moment, has said very clearly that he does not expect that rates will be lower. I think that's a pretty high authority on the subject of cost.
As I conclude, I'd like to quote Mr Farlinger, who says: "Nobody really knows what the price of power is going to be when competition comes in. History tells us the price goes down, but that's a leap of faith." I think consumers require more than just a leap of faith from this government in these economic times.
Finally, I'd simply like to quote the chair of the Municipal Electric Association, who, while supportive, says, "Our members who serve on the front lines of the industry continue to be concerned that our customers may end up paying a lot more for their electricity because the generation sector must be made competitive."
These are real worries. They're worries of ordinary people. They're worries of some of the industry participants. There are issues there that the government must address, and we hope they will do that through public hearings.
The Speaker: Questions and comments?
Mr Len Wood: I want to comment on the member for Oakwood and the member for Downsview's remarks. They have raised a lot of issues, a lot of questions that have been unanswered: What are hydro rates going to be after this new bill becomes law? What is the debt going to be? People out there want to know what the debt is going to be and who's going to be paying for the debt after the company is split up into a number of different companies.
We've had a company, Ontario Hydro, in existence for I believe 92 years, and there's no doubt that the company has to be fixed. There are problems with it, and there have been ever since the Conservative government of the day decided to bring in nuclear power and as a result ran up a debt of $30 billion or $35 billion under Bill Davis in the 1970s.
That could have been stopped the minute the government found out that Darlington was out of control. They were going to spend $4 billion, and then the estimate went up to $7 billion and $9 billion, and then finally up to more than $14 billion. At the point where it was discovered it was going to be more than $4 billion, the Conservative government at that time should have shut that construction down and should have got out of the nuclear business altogether.
When we became the government, we decided that it was very important that we put a freeze on nuclear power construction in Ontario. We felt that for 20 years nuclear power plants had been built, and they were supposed to be cost-efficient and were supposed to produce the cleanest power right across this province, but it did not happen. The minute they get into a little bit of trouble, the debt goes sky-high, and here we are now trying to fix problems of the Conservative government for 40 years.
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Mrs Johns: I think it's important for the NDP to have a look at the select committee hearings and I think at that point they'll recognize that they have two outstanding issues they need to look at very carefully. The first, of course, is the dichotomy they talk about: They don't want nuclear power but they want clean, environmentally friendly electricity. Nuclear power is one of those kinds of powers that can give us that clean, environmentally friendly electricity. That's a big issue they have to look at it.
The second is that although there were some costs certainly and there were cost overrides in all the nuclear plants - there have been throughout the world - what's important to recognize is that Hydro has been out of control for a very long time. It was out of control in the 1990s. We saw the huge rate increases; my colleague showed the rate increases. They have to recognize that people in Ontario, businesses and residential people, cannot continue to pay escalating rates. Mike Harris and the Premier of the province controlled those rates for these last four or five years, but that cannot continue indefinitely. We have to make substantial changes.
To the member for Oakwood I would like to say that I appreciated his talk. One of the things I think is important for him to have a good look at is the Ontario Energy Board Act section within Bill 35. We have provided increased consumer protection by giving more and more responsibilities to the Ontario Energy Board. We have tried to strengthen the energy board so that they're more than just a regulator with a lack of teeth, as they have been in the past. They're going to be licensing market operators. They're going to be putting forward a code of conduct that people who are going to sell gas and electricity within the province will have to live within. There are going to be serious penalties if people do not follow that code of conduct.
Mr Conway: I want to commend my colleagues for their remarks. I think they're both quite right in putting the emphasis on what this is going to mean to Main Street, what it's going to mean to the average residential and/or farm customer, because at the end of the day that's going to be the critical test. I'm hopeful there's a way to develop this policy so that test can be positively met, but the experience in other jurisdictions gives me some pause.
Ms Castrilli from Downsview asked a question, what is the likely cost of recovering the stranded debt going to be on the household charge? At a conference sponsored by Scotiabank on this very subject in New York City on April 16, 1998, at which Jim Wilson, Minister of Energy for Ontario, was the keynote speaker, one of the panellists that day, Ms Patricia Mohr, vice-president of global energy industry analysis with the Bank of Nova Scotia, estimated, quoting from the notes of someone who was there, "Ms Mohr said that the recovery of stranded debt could boost electricity rates by 1.6 cents per kilowatt-hour once the rate freeze is lifted in the year 2000." That's one estimate of the cost of that stranded debt on one's bill.
A while ago, I think it was the member for Niagara Falls who was going on about costs over the last 10 or 15 years. A big part of that had to do with the way in which we budgeted for the nuclear projects. You couldn't put the capital costs on rates until the plant started to actually produce power. One can be very disingenuous with those data. I simply remember - listen, I'm not interested in the politics of it, because we've all been there. In retrospect, we made some mistakes with Darlington when we inherited it half built. The point I'd make now, though, is that everybody says the only way to go is combined cycle natural gas - everybody. I wonder what happens if something surprising happens in that market.
Mr Martin: Thank you, Speaker, for allowing me this opportunity to comment on the remarks of the members for Downsview and Oakwood. They both spoke to an issue that we over here have some real, great concern about, and that's this whole question: Are we heading down the road to privatization, and if we are, which I suspect we are, who is out there waiting to eat up this very lucrative business that's possible, particularly that part of it that is more competitive than others?
Mr Conway: The Power Workers are out there with a pile of money.
Mr Martin: Well, we did that in Sault Ste Marie with Algoma Steel and we came up with something rather interesting and successful.
My concern, though, is when you move into this private sector, privatization of energy, a resource that is so important to all of us who live and work in Ontario, and throw it out there to an industry or to people in an industry that really aren't that interested in whether we get hydro or energy in a timely fashion and at a price that's affordable.
Those who suggest that this isn't putting us on the road to privatization only need to look at some of the more recent history around Ontario Hydro. This government put privatization right in the contract of the new president, then they opened the doors to British Energy to negotiate with Hydro behind closed doors. Then early this month they appointed a British serial privatizer, Sir Graham Day, someone who has led three privatizations in Britain, to the Hydro board. We only have to look at what happened in Britain when Margaret Thatcher took that country down the road to the privatization of almost everything. It was out of that that we moved away from a whole lot of the very important regulations that were in place and we ended up with some parts of Britain not having water and with mad cow disease. That's what you get.
The Speaker: Thank you. Questions and comments? Response. Member for Oakwood.
Mr Colle: I thank my colleagues for their interesting comments and questions. I certainly want to commend the member for Renfrew North for his insightful and historical and, I think, very, very thorough look at this issue. We're going to need his insight to keep the government true as they go through this. Hopefully, he'll be able to keep them in line before they are too reckless as they usually are.
I remember I got a letter this week from a constituent of mine who said: "I have this thing that my wife signed seven years ago with this door-to-door gas broker and I'm trying to get out of it. She phoned up Consumers Gas," and I saw the letter back from Consumers Gas that said, "Sorry, your wife signed this contract back in 1991 and then that fly-by-night scam artist sold your rights to some other company and they have you for another eight years."
This is the type of garbage that's been going on in this province for the last number of years in the field of natural gas brokers. I know there's a piece of this legislation which hopefully will control that, but I think that's the tip of the iceberg which can happen when you see the moneyed interests that are going to be looking at this whole field of deregulation.
There's just one final comment from Richard Foot from the Ottawa Citizen in June of this year to see who we're following on this road:
"More than half a dozen countries have blazed a similar trail in the last two decades. It was General Augusto Pinochet who started the trend, exposing Chile's power system to market forces. Now Premier Mike Harris is leading Ontario in much the same direction."
I don't know. When we're following the likes of Pinochet, I really worry about that person and their gas bill and their hydro bill and who their rights are going to be sold to. So beware.
The Speaker: Further debate? The member for Cochrane North.
Mr Len Wood: Thanks for the opportunity to enter the debate on Bill 35. For the people who are out there listening tonight, Bill 35 is a bill that has 160 pages of different rules and regulations and it's called An Act to create jobs and protect consumers by promoting low-cost energy through competition, to protect the environment, to provide for pensions and to make related amendments to certain Acts.
There's a lot of material in this bill and there's a very fancy title out there, "An Act to create jobs." It seems like this government puts that name on almost every bill that they come in with and yet they haven't created any jobs. We still have high unemployment in parts of northern Ontario.
The competition in this part of the bill - there's no doubt we, as the NDP caucus, feel that some competition brought into Ontario Hydro needed to be done. We also feel that Ontario Hydro had to be fixed but not at any price. What is the price for fixing Ontario Hydro? Does it mean that the residential users, the farmers, the small businesses out there are going to have an increase in prices of hydro rates as rates for large corporations and industrial users throughout this province go down?
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We still haven't got answers and we've been asking what the stranded debt is out there. We have all different kinds of estimates. Now the information we're getting is that the Ministry of Finance under Ernie Eves is going to go out and get a busload of financial whizzes and they're going to bring them into the Ministry of Finance and they're going to decide who's going to pay for the stranded debt that's out there and how much it is. Is it $15 billion, is it $30 billion or is it $35 billion?
We have a bill that's brought in, as I said before, with 160 pages of changes that are being made and yet it has created probably 200, 300 or 400 pages of questions that we're not able to get answers for. Is this privatization by the back door? I personally believe it is. The former Minister of Health, who has now become the Minister of Energy because Mike Harris had to make a switch, has said that he's not looking for privatization for probably five years, but we know for a fact that some of the people they've brought in to talk about privatization and the splitting up of Ontario Hydro into different sectors were involved with Margaret Thatcher in England. As a result, the taxpayers in England were ripped off by all the privatization that took place there. Now Mike Harris has brought in these same privatizers. Sir Graham Day is one of the people they've brought in, and he led three privatizations in Britain before and it's a mess. It's a serious mess in England and it's not the type of mess we want here.
Our NDP caucus, under the leadership of Howard Hampton, has taken a position on nuclear power. It was not needed in Ontario, it was not called for, but the Conservative government of the day decided that nuclear power was going to be the answer to cheap power or clean power in Ontario and now we find out that it has become a real disaster. If you look back into the 1970s, nobody in the world is building nuclear power plants, unless, as one of my colleagues told me today, a government buys it for them and builds it for them and says: "Here, we've done everything for you. Now you can start up your nuclear power plant." Nobody in the world is building nuclear power plants.
There are ways of resolving the problems that Hydro got itself into with the support of Bill Davis. As I said earlier, back in the early 1980s some of that debt could have been stopped when Darlington was out of control as far as construction was concerned, when it was estimated at $4 billion and it went to $7 billion. It could have been stopped at that time, but at that time there was a change of government. The Conservatives were put in the penalty box after 42 years of messing up the province of Ontario and the Liberals came in. They decided that they were going to continue with building Darlington and, as a result, we ended up with the debt that we had. The NDP decided that nuclear power was not the right way to go and to ban any more nuclear power. I don't believe that the nuclear generators that are out there that could not be operated safely should be rebuilt. I think they should be put into mothballs and there should be decommissioning done. There are other ways of producing good power.
The bill and some of the briefings that we've had leave the door wide open as far as privatization is concerned. It's pretty clear that the government who campaigned in 1995 on privatization - they were going to privatize everything. They were going to privatize Ontario Hydro. They were going to privatize the liquor stores. They were going to privatize TVOntario. Now they've decided that the liquor stores are generating a lot of money; casinos are generating a lot of money.
Mike Harris was not going to close hospitals in the province and we saw 35 hospitals closed. We saw announcements out there that there are probably close to 100 schools that are going to be closed in southern Ontario, northern Ontario as we're - is this what you want to see happen to Ontario Hydro? When you have promises that are made in the 1995 election campaign, they're not kept. It's strictly a broken promise. Mike Harris was saying, "I'm not going to close hospitals." He closed 35. He was saying, "I'm going to privatize Ontario. Now I'm not going to privatize Ontario Hydro, but I might somewhere down the line."
We have to look deep into the minds of the Conservative government, the backbenchers, and the whiz kids that are following the exact notes - I notice that they're doing the script now as far as Ontario Hydro is concerned. The bill is tabled in here and we're debating second reading of Bill 35. But there are more questions out there than there are answers. Day after day, we're looking for the government to give us answers on what's going to happen to hydro rates and who's going to pay for the debts. Are residential users going to -
Mr Lessard: On a point of order, Mr Speaker: I believe the member for Cochrane North is making some very interesting points and we should have a quorum here to listen to what he has to say.
The Speaker: Is there a quorum present?
Clerk at the Table: A quorum is not present.
The Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present.
The Speaker: The member for Cochrane North.
Mr Len Wood: As I was pointing out, there are ways of producing clean energy, and northern Ontario is a good example of that. The consumers are happy when you can produce electricity from hydraulic generating plants. We have all kinds of hydraulic generating plants that have been operating for years and they have never run into the maintenance problems and the health problems that nuclear power plants give. We have Northland Power and a number of other companies that, as we're speaking today, are building generating plants. Some are using gas from natural gas. Others are using a combination of natural gas and sawdust or bark waste from sawmills and paper mills. There are at least half a dozen that were built under the NDP government that are a new type of hydraulic generating plant and they produce a lot of electricity. Under the old rules, the only way they can sell is, they have to negotiate an agreement with Ontario Hydro and sell at those rates to Ontario Hydro. There's no doubt about it that by making some of the changes here, that's going to be good for them.
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I just want to touch a little bit on the Power Workers out there. They were concerned for the last two or three years that privatization might mean an end to their jobs. They've managed to negotiate some agreements that they feel half comfortable with, splitting up the company into smaller units, but I'm sure that when the Minister of Energy and the Premier get recommendations back from the group they've brought in from England as far as privatization, they will be up in arms as well.
We've got to look at the environment. What type of coal is going to be brought in? Is it going to be dirty coal that is going to be brought in to fire up the plants that we need during the peak seasons? Where is the coal going to come from? Is it the dirty coal that is going to come in from the States or is it going to be other types that are low in sulphur?
There are a lot of questions out there. I don't believe that two weeks of public hearings in August is going to answer any of those questions. Probably we're still going to have a lot of serious, unanswered questions when we finish the public hearings in August. We might have needed five or six weeks or a couple of months of travelling around the province to get the answers. We've been trying to get answers. The Municipal Electrical Association is still trying to get answers as to what their future is going to be.
As I mentioned at the beginning, one of the aspects of this government's deciding how they're going to deal with debt is, when they can't get answers from the board of directors of Ontario Hydro, they put it into the hands of the Minister of Finance to come up with what they feel is debt, because nobody seems to know whether it's $14 billion, $15 billion, $30 billion or what it is. In any event, all these billions of dollars of debt were generated by a former Conservative government when they decided to build the nuclear power plants which we've now seen are a disaster.
I'm well aware of the all-party committee that travelled around the province last year to get feedback from the public on what they should do with the future of Ontario Hydro. I'm well aware of those meetings that took place and the recommendations that are coming through. But to dismantle Hydro at any price I feel is not the solution to the problems that have been built up over the 1960s and 1970s and during the 1990s were being brought under control with some of the reductions in staff and getting things back in line. But it's very hard to deal with a situation that's been allowed to get out of control by previous governments in the 1970s and 1980s.
What are the rates going to be for the residential consumers and the small businesses? Are they going to have to share the burden of this debt, or is it going to be split evenly among the large industrial users and the corporate sector, or are the corporate and industrial rates going to go down, which we suspect they will. They will be substantially reduced by the Mike Harris government under this bill and under any regulations they might bring in in the future. But what are the municipal consumers going to have to pay for hydro in order to help pay down that debt and help reconstruct any problems that might be out there?
The Minister of Energy is telling us, "I've been assured the rates are going to go down." I have not been given any guarantee that the rates are going to go down until such time as the Minister of Finance or the Premier could come into the House and clarify the situation and say, "We've studied what the debt is; this is how we're going to deal with it and this is exactly what the rates are going to be for the next number of years," rather than leaving everything up in the air.
As I said at the beginning, we know that there were problems and that Hydro had to be fixed. There were serious problems with nuclear power. Nuclear power was something that should never have been brought into Ontario, because it's not clean and cheap power as people led other people to believe back in the early 1960s, 1970s and 1980s. It's a power that is very expensive to build and very expensive to maintain and now we're seeing the problems we're faced with.
The decision to bring in the British serial privatizer, Sir Graham Day, who led privatizations in Britain, I don't believe was the right answer. We know what happened in Britain when they decided to privatize hydro, privatize water, privatize sewers. It's a mess out there. People are paying more. The companies that managed to get a hand on through the privatization are making big profits, but they're making profits at the expense of the taxpayers. It's taxpayers who built that, as they did Ontario Hydro. For the last 90 years or more, I believe it's 92 years since Ontario Hydro was started, it was responsible to the people of Ontario and the operating costs and the debt were being paid through hydro rates and hydro was supposed to be produced at cost. What is the cost now because of the mess that we've been put into by the Bill Davis government in the 1970s? Then the Liberals could have made a decision back in the early 1980s, but they decided to go the other way and continued.
In the 1990s, the decision was made that nuclear power was not safe, that it was not healthy, and the NDP government decided they would freeze it. There were no more nuclear plants being built in Ontario because they were expensive, they were unhealthy and they did not do the job that people said they were going to do. We really believe we made the right decision.
When we are re-elected in 1999, we will continue to make sure that nuclear power is put on the back burner, because it's been a failure around the world. It does not work. It does not produce cheap rates for consumers and it's not doing the job that they thought it would. On the other hand, if this is the end result of Bill 35 in two or three or four years down the road, privatization and hydro rates are going to go through the roof for the residential users and be lower for industrial users. That is not the answer either. There has to be a better way of dealing with Ontario Hydro. We cannot fix Ontario Hydro at all costs through the consumers of this province. That would be a real mistake if that would happen. That is my fear, because we know what is happening to education and health care under Mike Harris. Is that what you want to happen under Ontario Hydro - the mess they've created under education and health care?
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The Speaker: Questions and comments?
Mrs Johns: I'd like to comment on the member for Cochrane South's presentation. I'd like to say that his remembrance of history is certainly somewhat different than mine. For the people at home I would like to suggest that 70% of the power we have in Ontario comes from nuclear power. So if this government was going to shut down nuclear power in the five years they were in government, God help us all. We would turn on the switch and there would be no power. There would be no light, there would be no refrigerator, there would be no business. It's not logical to even think about closing down nuclear power. Governments in the past made decisions about nuclear power and we have to live with them.
I'm still optimistic that I'm going to be able to convince the NDP that this is a good bill and it's good for Ontario. So I'd like to make a couple of comments about the environment. We have some quotes from some people here and I think it's important that we hear them.
We have a quote from Greenpeace. They say that this legislation is an opportunity for "the significant chunk of the public that wants to buy green power." For the first time in history, these people who want to buy green power are going to be able to buy it.
Tom Adams of Energy Probe is not probably a friend of the government, but he says about this bill:
"Customers are going to get to see where their power comes from and what emissions are associated with it. So it's a consumer empowerment that should really help the clean power industries promote themselves as an alternative to polluting ones."
What we're doing is allowing the people of Ontario to make decisions to buy green power if they want to, and I'm sure that the member for Cochrane South will be very pleased with that, because he'll be able to buy green power in his home in Cochrane South. This is a good thing.
Mr Sergio: The member for Cochrane North addressed a couple of very important points from a -
Mr Colle: A good speech.
Mr Sergio: Yes, a good speech on a very complex and voluminous bill. Especially too the important thing is that, yes, we are trying to privatize Ontario Hydro by going through the back door here. Also he mentioned the accountability of the system, if you will, how we'll be serving the taxpayers and the customers in the future. As well, who is going to be paying for what and how much; we have seen it with the various gas brokers as to who is going to pay and how much they are paying.
I'd like to mention as well the $6 billion to $8 billion the government will have to shell out to bring the system up to par and then probably even sell it. I mean, do we charge them the cost, spend taxpayers' money, to bring it up to par and then sell it to the private sector?
The other important aspect that the member was so valiantly bringing to our attention is the fact that it lack regulations. There are absolutely no regulations in this particular piece of legislation when it comes to the other new corporations. There is absolutely no control whatsoever. There is no way of knowing how they are going to be delivering the power supply to the customers and if the residential customers indeed will be having to pay more than farmers or less than the industrial-commercial customers. That is something that is not spelled out anywhere in the legislation and we would like to know, the people of Ontario would like to know, should know, prior to the approval of this legislation.
Mr Martin: I want to commend the member for Cochrane North for his comments this evening. He again speaks to that major concern that we over here have with this bill, that is, the fear that this is taking us down the road to privatization, which in our view will not be in the best interests of the consumers out there to whom the government says this bill is targeted by way of cost savings and reduced costs for energy.
Our fear is that, like everything else that's turned over to the private sector, eventually the big corporations, usually offshore, are poised, ready to move in and take over. When they take over, there is no competition any more. We've seen that in many different industrial sectors in the province. I've done some work myself in the area of franchising and small business. There was a time in this province when it was possible for the small entrepreneur to actually get into business and make a profit and do well. That's becoming less and less the case any more because the big operator controls everything, and when he controls everything he sets the prices, and when he sets the prices he never brings them down, they always go up.
In any instance in my experience or in what I've read, where the private sector has come in and taken over an area of activity in a jurisdiction with the stated purpose of bringing the price down, and they've made all the arguments, in fact the price has never gone down, no matter what government does, it seems. Industry has a way of making an argument for at least holding the line or increasing prices. The day that you show me an instance of where that in fact happens might be the day that I will accept some of the arguments that you're making re this piece of legislation -
The Speaker: Questions and comments? Member for Niagara Falls.
Mr Maves: You sounded so disappointed there, Speaker.
The Speaker: Member for Niagara Falls.
Mr Maves: Thank you very much, Speaker.
It's my pleasure to rise and speak to the comments from the member for Cochrane North. It's always interesting to hear his meanderings.
One of the things he talked about was a fear of British Energy. The NDP has always had, and still has, this bizarre 1960s fear of foreign investment that might come into Ontario. I notice there's an article in the Ottawa Citizen about British Energy. It's nice to see that the Liberals on the opposite side don't share that view of the NDP any more. They seem to be happy that there's some outside private interests for Ontario Hydro.
"British Energy has turned around the battered British nuclear industry since it was privatized in the late 1980s and it could offer a breath of fresh air, new management and new approaches in Ontario."
This article goes on to quote Sean Conway, who co-chaired last year's Ontario legislative committee on Hydro's nuclear affairs. "Mr Conway also welcomed the interests of private bidders willing to enter a partnership with Hydro. He said: `British Energy is highly regarded by independent experts. They had a better record in the last 10 years than Ontario Hydro. It may very well be time for Ontario Hydro to partner with companies who have a much more positive record in recent times.'"
We on this side of the House like to see the Liberals getting away from that strange fear of foreign investment and embracing the idea of Ontario Hydro maybe taking on partners, embracing the idea of having an injection of equity into Hydro that will improve the hydro sector and lead to lower rates for everyone in Ontario in the future.
The Speaker: Response?
Mr Len Wood: To the members for Niagara Falls, Sault Ste Marie, Yorkview and Huron: The member for Huron brought up the point that the NDP government was going to shut down nuclear power. That was not what the NDP government was doing. The NDP government said wet were going to put a freeze on rates, make sure that they were not excessive, and we were not going to build any more new nuclear power plants in Ontario. The reason for that was that you have to find replacement power if you are to shut down that area. Nuclear power produces probably - right now I understand it's not 70%, it's about 40% or 50% of the power in Ontario. But there are a lot of other ways that power can be produced.
One of the comments I was looking at was when Bill Farlinger told reporters after the announcement of this particular bill that he was going to be looking for private investment in nuclear power. Talk about being out of control. If the private sector is going to take over nuclear power, we're all in trouble because even with Ontario Hydro operating them there were a lot of concerns out there.
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I'll go back to what I said before. We knew there was a problem with Ontario Hydro. It had to be fixed. But are we going to fix it the same way as we're making a mess with shutting down hospitals, health care in Ontario; closing schools without any replacement for them; and the mess that has happened in northern Ontario, everything that Mike Harris has touched has since he moved to Toronto from North Bay? He goes back to visit North Bay and stands there and turns his back to the north. He's forgotten all about the north. It's one mess after another. Is this another mess, Ontario Hydro now, that the Conservatives have gotten us into?
The Speaker: Further debate?
Mr Gilchrist: It's a pleasure to rise to speak to this very important bill. Indeed, if I may, as each of the members has focused on different aspects of the bill, I'd like to concentrate on one rationale behind bringing forward this bill that I'm sure is unassailable from any quarter in this chamber. That of course is the impact it will have on stimulating the creation of new jobs and stimulating investment in Ontario.
There's no doubt that Ontario depends tremendously on our exports and the competitiveness of the industry that locates in this province. The cost of electricity is a major factor in determining whether or not to build a plant in this jurisdiction or any other. Over the last decade, unfortunately, the cost advantage that traditionally had been enjoyed by Ontario Hydro in comparison to almost all other jurisdictions in North America has been lost. Ontario electricity rates rose by 30% in the early 1990s and are now among the highest - in fact, they're the third highest - of all the hydro rates across Canada.
Electricity rates in Ontario have grown a staggering 54% faster than the consumer price index just since 1986. Now we have a situation where Ontario industries pay a far higher rate for their electricity than most of their other competitors, particularly their competitors on the other side of the border.
Add to that the future prospects when we compare the jurisdictions in the United States to ourselves and recognize that most of them have already crossed the philosophical hurdle and have decided to deregulate their energy industry. They understand that -
Mr Martin: On a point of order, Mr Speaker: I don't think we have a quorum to listen to the eloquent gentlemen regaling us here this evening.
The Speaker: Is there a quorum present?
Clerk at the Table: A quorum is not present, Speaker.
The Speaker ordered the bells rung.
Clerk at the Table: A quorum is now present, Speaker.
The Speaker: Member for Scarborough East.
Mr Gilchrist: I appreciate the interest the member for Sault Ste Marie has taken in the comments from the government side.
As I was saying, not only is the status quo providing increasingly desperate prospects for the industry located in Ontario, but the decision made by almost every American state to deregulate has left the prospect that, particularly in the northeastern United States, they expect to see their rates falling tremendously over the next few years.
Electricity costs for many of the heavy industries which have located in our province can sometimes amount to 5% of their total operating costs - a staggering percentage. It is particularly important in areas such as pulp and paper, primary metals and transportation. In fact, and perhaps it will come as news to the members in this chamber, the largest consumer of electricity in Ontario is the Kidd Creek mine, just outside Timmins in northern Ontario.
So there's no doubt that in recognition of the need to be competitive, lower electricity prices would help to ensure that we not only attract but retain the important jobs we need to continue to rebuild the economy of the province.
It would be very easy for us to rest on our laurels. As I'm sure you've heard, and as unfortunately perhaps the newspapers don't recognize often enough, 376,000 net new jobs have been created in this province since the election in 1995, but we can't stop there. This bill is another important step forward in ensuring that we attract even more jobs - good, high-paying jobs.
It's not just our opinion that will be the consequence. I can quote from two other very respected individuals. When we introduced the bill, Mr Guido Bachmann, who is the chairman of the IPPSA, said: "It's a step in the right direction. This will present an opportunity for independent power producers all across North America to participate in an open market."
Mr Fred Brown, the executive VP of Northland Power, in a letter to the minister said:
"In expectation of opportunities resulting from this new environment, Northland Power Inc has committed substantial resources and investment in Ontario. Your actions reinforce our decision to continue investing in Ontario. Ultimately, hundreds of millions of dollars in new investment and significant job creation could materialize from our initiatives alone. In total, we expect this restructuring," meaning the restructuring of the electricity industry, "will generate billions of dollars in new investment in the province."
What exciting news. What an exciting prospect for all Ontarians who are keenly concerned about unemployment rates, particularly in the north, which are still far higher than this government finds acceptable.
Supporting job creation and investment are two of the significant underpinnings of why this bill was brought forward and why we believe it's important to restructure the electricity market in Ontario.
A competitive market, as we envision it in this bill, would put greater price and cost discipline in place on all electricity providers, encouraging savings, new ideas and technological innovation.
The proposed legislation would, as you know, end Ontario Hydro's monopoly and reorganize the company into two new commercial ventures: the Ontario Electricity Generation Corp and the Ontario Electric Services Corp, and a non-profit crown corporation, the Independent Electricity Market Operator, which would act as an impartial manager, ensuring reliable electricity supplies and fair access to the $10-billion consumer market.
The estimated investment potential for power generation in this province is huge. Over the next 15 to 20 years it's estimated to be at least $10 billion. This is money that will be spent on creating new generation capacity to serve new demand, as well as replacing older equipment.
It's also expected that in that same time period our transmission system, the wires that carry the electricity to all corners of the province, would require similar new capital investment in the order of $250 million a year. Similar investments in the distribution system could require up to $500 million a year - again, an incredibly important stimulus to job creation in Ontario.
We would obviously see operational and service gains in a new, restructured market. Newer, smaller and more efficient power plants, with many of them using renewable energy sources, would help us meet our energy-related environmental targets.
Under the legislation, the electricity generation business would be open to power producers who meet the province's environmental standards and receive a licence to generate electricity. The transmission grid - the wires of the local distribution systems - would become common carriers, allowing power companies to market and sell electricity to consumers anywhere in the province.
Giving power producers access to Hydro's transmission grid would open up new investment opportunities for new generators, cogeneration and renewable forms of energy production.
Companies wishing to participate in the new energy market would require a licence from the Ontario Energy Board to operate and, if selling energy to residential customers, adhere to a very strict code of conduct.
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A competitive market would give individuals and business greater choice. We would go from a monopoly to a situation far closer to that enjoyed by retailers of almost every other product you could name. Imagine what would happen to prices on any other product, on any other commodity, if you had only one choice, if there was only supplier. Obviously, if there was only one place to repair cars, the market would charge a far higher price than is the case today.
That's the unfortunate circumstance of having a provincial monopoly such as Ontario Hydro. There has been nobody holding their feet to the fire. There has been nobody guaranteeing the most innovative use of technology, no one guaranteeing the most efficient allocation of their human and other resources, no one guaranteeing that the money being spent - man, did they spend a lot of money - was being spent as wisely as it possibly could be. The result is a stranded debt; we've heard estimates of up to $30 billion. That's the legacy of having only one provider of electricity in Ontario. No competition in any sector means no efficiency, and we hope that this bill sets a very different course.
Of course, having a competitive market does guarantee consumers greater choice. Consumers could choose their own electricity provider either directly or through agents or brokers, as is done now in the natural gas area. This would encourage greater product and service innovation on the part of electricity providers.
There is no doubt, we have demonstrated consistently over the last three years that the primary focus of our government is job creation. The proposed legislation gives us an opportunity to both create jobs and stimulate economic development. Competition and lower electricity rates would have a direct impact on job creation, as well as the increased investment opportunities I have already spoken of.
The potential for employment in an emerging restructured electricity industry would be significant. Let me just give you an example. In the last four years alone, employment in the United States in this sector has doubled - doubled in just four years in what had obviously already been a very mature market; people have been using electricity for 100 years - and some companies have actually seen a tripling of their workforce in four short years.
In addition, close to 400 power marketers, new companies, have been certified since 1989 in the United States, and there is absolutely no reason to believe that we wouldn't see similar growth, similar expansion in the marketplace here in Ontario.
Obviously new generating capacity will be required to meet the growth in our economy. Those 376,000 jobs we have already seen created mean far more workplaces, and far more workplaces with more employees, which means a higher demand for all commodities but particularly for electricity. The construction of new, smaller, more decentralized generation will spread employment across the province and certainly help avoid the boom-and-bust cycle for local communities where energy megaprojects have been built in the past.
Jobs will be created in new areas, including the aggregation, brokering and marketing of electricity. Convergence opportunities will increase across industries such as electricity, natural gas and telecommunications, including such opportunities as share marketing, billing, trading and infrastructure. Ontario Hydro is already exploring such opportunities through joint ventures with natural gas companies. Other opportunities may exist with cable TV companies, long- and local-distance phone systems and Internet service providers. Convergence will create numerous jobs, many of them highly skilled.
The natural gas industry, as a comparison, is something else in which we're keen to see a continued expansion and increase in jobs and investment. Those statutes have not been updated for over 30 years. The need to recognize the natural gas deregulation that has taken place has forced certain barriers that existed in the market to come down. They had resulted in an efficient market and added costs for all Ontario gas consumers. With the changes being introduced to the legislation, these added costs should be eliminated, lowering prices again.
With the passage of this bill, Ontario gas producers would no longer be burdened with the extra costs created by an inefficient marketplace. Producers would have greater opportunities to be more competitive in the sale of gas in the Ontario market. Obviously as companies become more competitive, there would be greater opportunities there as well for investment and growth. There too you will see new jobs in aggregation, brokering and marketing of natural gas. The legislation modernizes the regulation of natural gas and removes market barriers so that that industry can evolve, creating jobs and investment.
What's particularly encouraging is that this is not a bill that has seen a lot of partisan assaults from any quarter. In fact, we're very pleased with the largely supportive comments that have come throughout the hearings held by the select committee and the comments by the opposition members here in this chamber.
Maybe even more exciting than that is the knowledge that even the Power Workers' Union, which five or 10 years ago might have been seen as the biggest enemy to change, have proven those naysayers wrong. They have proven the sceptics wrong. In fact John Murphy, the president of the Power Workers' Union, who was with us here in the chamber on the day the bill was brought forward, has said they're not going to worry about losing their jobs or their successor rights or their pension plans. In fact, as you are no doubt aware, the union itself has proposed an investment in one of the nuclear plants. They want to be a partner with Ontario Hydro. They want to be one of those new providers of electricity.
What could be of greater comfort to the people watching, to the people looking at the impact of this bill and wondering which direction pricing and job creation will take than to know that the union members working for Hydro themselves really believe that this is a step forward. They have expressed a commitment to work with Hydro, to work with the government and to find new ways of investing pension money to achieve not only job security but a greater financial reward for their own members.
I think that's very exciting, and I think it's long overdue that we put in place an environment where the workers can step forward, where the monopoly, once broken, will allow access to anyone who wants to come up with a new idea, implement new technology, provide new financial resources. The competition is going to be marvellous, and the results will be equally significant, because the projections we have heard in the last few weeks range from 5% to as high as 20% reduction in the price of electricity that can be expected once the competition takes hold.
The other important aspect to be remembered is that there is a very steady pace to the implementation of the changes we're proposing in this bill. Over the next year, we'll continue to debate this issue, we'll move to create the two new companies which will take control of Ontario Hydro's existing assets and we'll give the local municipal electrical utilities time to analyse their place in the market and determine what role they want to play. Some will get larger, some will merge; all of them will meet the test of what is best for their local market and for their local customers.
By the year 2000, having had that slow and measured pace, but a very sure pace, we'll be in a position to reap the incredible benefits, the significant rewards that come from competition. In every other area that the government has broken up monopolies and has encouraged the involved of the private sector or other investors, we have seen an increase in jobs, we have seen a lowering of prices. Natural gas is already well into that cycle; in fact, we have members in this chamber who have a background in that industry who could speak far more eloquently than I on that topic, but there is no doubt that across Ontario consumers have saved tens, indeed hundreds of millions of dollars since the first steps towards natural gas deregulation were taken.
Imagine, then, a product far more prevalent in the households across Ontario. Almost every home, save perhaps for a few cottages and hunting camps, every single resident, every single business in Ontario is an electricity customer. The bottom line is that if the savings in natural gas are in the tens and hundreds of millions, looking out over the next decade, taxpayers in Ontario could expect to save hundreds of millions to billions in reduced costs of a commodity we all have to buy, to rely on our modern accoutrements and survive in an increasingly high-tech world.
This bill is merely the next step forward in an agenda of the last three years, a commitment to honour our election promises, to create jobs, and not just any jobs but top-quality jobs, jobs that this government will be very proud to recognize in years to come as having rebuilt the foundation of what was once the strongest economy in Canada and, I believe we can say, has become again.
We're not there yet, but this bill takes us an important step closer to our goal of making sure that everyone in this province who wants a job will find a job, and that every business that invests in this province will have the lowest cost of operation when compared to any other province, any other jurisdiction in North America.
They won't just have the lowest income tax rates; their staff won't just pay the lowest personal income tax rates; they won't just see relief in things like the employment health tax and other job-killing taxes like that - they're going to enjoy far lower electricity rates.
Many of us remember the days not that long ago when Ontario could boast having the cheapest electricity rates in North America. That day will come again, I have every confidence, and this bill is a guarantee of that.
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The Speaker: Questions and comments?
Mr Tony Ruprecht (Parkdale): Normally I like to listen to the member for Scarborough East because I learn something from him, but today I've got some questions. He's saying he's got exciting news. He's excited about Hydro being split up. Nirvana is around the corner -
Mr Gilchrist: It is.
Mr Ruprecht: He says it is. Nirvana's around the corner with this bill, 160 pages of questions. He's echoing the Minister of Energy of course who says, "We know it's a recipe for lower prices in every jurisdiction."
Let's listen to the chair of Ontario Hydro. What does the chair, Mr Farlinger, say about this? Let me quote something from the Toronto Star. Do you know what the chair says about lowering prices, and you have to address yourself to that fact: "Nobody really knows what the price of power is going to be when competition comes in. History will tell you that the price comes down, but that's a leap of faith." In short, he says, "We don't know." Is it going to go up? Is it going to go down? We don't know. Nirvana is not around the corner.
Furthermore, you've heard some members discussing this before, but you have not addressed that fact. Bob Lake, who is the president of the Municipal Electric Association, representing 276 non-profit electric utilities, says, "There will not be true competition, my friends, in the short term because the new generating company will only supply 93% of the province's power." In short, it is clear that prices may not come down. I don't know where he gets the idea from that it is Nirvana and that he's got some exciting news.
Furthermore, the second question you don't address yourself to is the whole idea of the provincial debt, the debt to Hydro. If you want some quotes here, you can find very quickly that the debt is at least, according to some statistics or to some of those who study this issue, $35 billion. There will be more -
The Speaker: Thank you. Questions and comments?
Mr Len Wood: In response to the Conservative member who spoke for the last 20 minutes, this is privatization by the back door. We don't know if it's going to happen in a year, two years or three years down the road, but it's privatization by the back door.
We don't have any assurances other than a bill that is brought in here, 160 pages, and there are going to be a few days of public hearings in August. I'm sure that even by that time we're not going to have the answers from the Minister of Finance who has been designated as the person who's going to have to be responsible for figuring out how much debt there is out there on Ontario Hydro and how it's going to be paid. Is it going to be put on the tax bill of the residences and small businesses that are paying hydro rates or are there going to be other ways of doing it?
We've asked all these questions and we continue to ask the questions. Is it a matter of Mike Harris trying to get another one of his election promises behind him before he calls a snap election? We're not sure about that either. Are we headed for an election in September before we see the disastrous results in health care and education? I'm sure you realize yourself, Mr Speaker, that when you're shutting down 35 or 40 hospitals in Ontario and closing schools all over the province, a mess is being created in health care and education. Is this another mess that is being created and is it a way of going into privatization through the back door so that the residential consumers out there are going to pay through the nose for higher hydro rates as a result of privatization?
Mr John Hastings (Etobicoke-Rexdale): It's interesting to listen to the various reactions to the member for Scarborough East, but I think both members opposite probably missed the key point and the key point here is, what are the prospects coming out of the Energy Competition Act and what will be the positive impacts of that legislation in succeeding years?
It's not long ago, about two years ago, that I think we heard from members opposite the refrain: "Where are the jobs? Where are the jobs?" Now that the jobs are coming because of many of the structural improvements we've made, that's part of the answer that is going to respond to the question the members opposite asked two years ago or a year ago on that refrain.
There is no doubt that if you keep the same structure of an Ontario Hydro monopoly that you have today, you are going to face severe critical problems in the new millennium because all you've got to do is open your mind and look around you, members opposite, in terms of what's happening in the electrical business in the rest of North America.
What is happening there? There's competition. How it's coming about is different in different states of the US. It's different in other parts of the world, but the key fact is that you have to open up your markets and this piece of legislation will do that. Out of that particular application, you will end up with more jobs, not only directly in the electrical industry but on the supply side of the industry. What I mean by that is in things like georelational information systems, tons of jobs coming about in computerization. Members opposite should be welcoming that, not scorning it.
The Speaker: Questions and comments?
Mr Sergio: I am allowed to speak? I can make more comments? It's already had two minutes.
The Speaker: I know, but there are four questions and comments that you can make.
Mr Sergio: I'll make the two minutes then, Mr Speaker, and then I'll make my five minutes. Is that okay?
The Speaker: What do you mean your five minutes?
Interjections.
Mr Sergio: That's what I'm saying.
The Speaker: Yes, you can't do two.
Mr Sergio: No.
The Speaker: Questions and comments? Response.
Mr Gilchrist: To the members for Parkdale, Cochrane North and Etobicoke-Rexdale, thank you very much for your responses. I don't think there's any doubt, to the member for Parkdale, that we certainly do have to wrestle with the issue of the debt, but it exists today and I don't think it's appropriate for anyone in this chamber to play any kind of a shell game with people.
The reality is that the taxpayers in Ontario have guaranteed that debt. We're on the hook, you, me and 11 million other people. The issue before us now is, how do we prevent the system from ever adding more debt, bundling even more debt on to the backs of existing Ontarians and future generations? You have every right to be concerned about the future of that debt, but I will guarantee you that the prospect of greater competition, the prospect of a more efficient Ontario Hydro, once it's separated into two new components, will guarantee a far greater likelihood of a profitable operation.
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You also talked about the percentage savings. I recall, back in my previous lifetime, that a certain national hardware, tire and sporting goods chain, when they moved into British Columbia for the first time, back in the late 1970s, did a survey in communities such as Kelowna and Penticton of the price of a representative basket of goods before and after their stores opened. The impact, even in a marketplace that already had some suppliers, was a net reduction of 12%. That was the impact of one company being added to the competition. As I mentioned in my comments, in the United States we've seen 400 new energy providers open up shop.
The reality is, the last word probably should go again to John Murphy: "There's no reason we shouldn't see the benefits of a competitive environment." Mr Murphy believes there'll be lower prices. The government believes there'll be lower prices. Everyone in the industry believes that. You're going to see it.
The Speaker: Further debate?
Mr Sergio: I am going to split the remaining nine minutes with the member for Parkdale. Whatever is left of the time, 10 minutes -
The Speaker: That's fine.
Mr Ruprecht: Make it 10.
Mr Sergio: Make it 10. We'll take whatever is left.
The Ontario Hydro monopoly as we now know it may end by the year 2000, but the question everyone must be asking nowadays is if the customer will be served better when that happens.
As we have said, we did give some approval in principle, because we don't fear competition. I think we are open to competition. We are open to healthy competition. We have no problem when private enterprises make a profit, provided they deliver good service at a fair price to the customers, to the citizens of Ontario.
What the bill says in its heading, always under the pretence of "to create jobs and protect consumers" and stuff like that, well, it couldn't be anything more - if I were to say misleading, I would be out of place, but it's something that doesn't really relate to the fact, because when you go into private companies, you are eliminating jobs. When private people take over, they do not have the control that we now have. Therefore the jobs may be gone and may even be less. So the heading is something on its own here.
Let's address, very quickly, a couple of points in the bill itself. It's all done in glory to split the corporation, divide it, and hopefully offer it to the highest bidder. What bothers me, and I think what bothers a lot of other people, is that before the government does that, we have to spend some $6 to $8 billion to put it in a very healthy condition and then we are going to sell it. The fact remains, and this has been addressed by previous speakers, we have some $30 billion to $40 billion of debt in Ontario Hydro. Yes, we have it now, but we're going to pass it along. So this will have to be dealt with. How is it going to be dealt with? Eventually somebody will have to pay it, and evidently it's going to be the Ontario taxpayer. That is something that is not anywhere in the legislation we are debating now.
Actually, there is nothing in the legislation with respect to this transition. The only thing that is in this particular piece of legislation is the creation of this new authority called the Ontario Hydro Financial Corp, which is in the hands of, and is controlled by, the provincial government, and that's where the money is being paid.
Other than that, there is absolutely nothing whatsoever that would control the private corporations, which will have total power. They will have massive powers to regulate themselves, to create rates, to issue licences. Under what conditions? There are no conditions, because there is legislation missing. There is no legislation which directs those corporations later on in the future about the conditions under which they would issue those licences and stuff like that. So I think there is a justified concern for the consumers of Ontario.
I would say that, as we have seen in the past, bills are provided and introduced in this House incomplete. Then we have a bundle of amendments coming later on with not enough input. Now we have at least five minutes to address this particular piece of legislation. Come Monday, the government may say, "We're going to curtail it; we're going to close it," introduce closure, and there we go again. As we have seen in the last two or three weeks, they have introduced closure on two or three bills and now I hear they're introducing closure to cut debate on the new election bill as well.
Mr Len Wood: They're trying to muzzle everybody.
Mr Sergio: Absolutely.
We have seen what's happening with the gas brokers. There are a lot of people out there being taken for a ride. We have seniors, we have all kinds of people who are being abused by these individual companies, and I don't want to see the same thing happening with Ontario Hydro. Let's not forget one thing: It belongs to the people of Ontario. We owe it to them to see that whatever is done here today is done with them in mind, and if and when Ontario Hydro is split, we will offer enough protection that they will continue to have delivery, they will continue to have service and they will continue to have provision of affordable, quality power from their Ontario Hydro.
Having said that, I'm already over the limit and I want to give my colleague the remaining few minutes.
Mr Ruprecht: I just wanted to remind you, do you know what happened in the 1960s? Do you remember that Hydro tried to push hydro and power use into every home in Ontario? They had a little jingle and the jingle went, "Electrically heated homes into every place," or something like that. I can't emulate it too well. The point was, "Use hydro as much as you possibly can, heat with hydro, because it is cheapest." Do you know what happened? Thousands upon thousands of residents of Ontario changed their water heaters from gas to hydro because hydro was cheaper.
Mr Frank Klees (York-Mackenzie): From oil to hydro, not gas.
Mr Ruprecht: That as well; some from oil and also from gas, because it was cheaper than gas and certainly cheaper than oil.
The fact is, and it goes beyond a shadow of a doubt, that now you again have another change. You again have thousands upon thousands of Ontario residents changing their water heaters from electricity to gas. Why is that? Because the power rates and the price of hydro have gone up tremendously.
You will remember that every time a person changes their water heater, it costs a lot of money. You know who's going to pay that? That is being paid by the taxpayer of Ontario. It's non-productive to change from one source of energy to another source of energy. Nobody wins.
Today we have another situation here with Bill 35. Too soon, too quick, too fast and ill-considered. Have a look at the 160 pages. I agree with some previous speakers when they say, "We can write 300 pages of questions to this bill's 160 pages, which are trying to tell the people of Ontario, `This is a good deal.'" How can this be a good deal?
You know something? I'm looking at a little cartoon here in the Hamilton Spectator. The cartoon has a woman making a phone call to the police while the hydro meter man is reading the hydro meter. She says: "Hello, police? I wish to report a robbery in progress." To some of us, especially to seniors, this has indeed happened. Many of them feel that hydro rates have gone so high as to become unaffordable.
I say to you, when you have these kinds of very funny little jingles going on in the Spectator and other newspapers, we know that something is amiss. What's amiss today is that one real fact emerges loud and clear, and that fact is that hydro rates are not going to go down. That is a leap of faith, as Farlinger has indicated.
Let me simply say, in closing, will there be lower rates? Here's the answer by an expert, Mr Andrew Frame. Let's see what he says.
"There's no guarantee electric rates will be lower. The price you will pay for electricity...will depend on a number of factors." What are those?
"(1) The cost of generation from supplier.
"(2) The taxes and charges that must be paid to the government.
"(3) The cost of energy your local distributor, public or private, pays the generator.
"(4) The charges for transmission.
"(5) The taxes the local distributor pays" -
The Speaker: Thank you. It now being 9:30 of the clock, this House stands adjourned until 1:30 of the clock Monday.
The House adjourned at 2130.