Scott Thompson: FAO says Wynne’s Hydro One sale will cost us $1.8 billion long-term
The Province of Ontario’s Financial Accountability Office (FAO) said the Premier Kathleen Wynne Liberal government will cost taxpayers $1.8 billion by selling off shares of Hydro One instead of using a low-interest loan to pay for infrastructure projects.
Another nail in the Liberal coffin for failing to do their fiscal due diligence and cost analysis, or simply refusing in an attempt to balance a re-election budget.
The FAO ran the numbers for both scenarios — selling Hydro One and keeping it — and in the long run, the sale will cost us $1.8 billion more because we can’t receive revenue from something we no longer own.
It would have been cheaper to borrow the money for infrastructure updates instead of selling an asset that generates revenue.
“Over the long term, the FAO estimates that the province’s net debt will be higher as a result of the partial sale of Hydro One when compared to an alternative of borrowing to finance an equivalent amount of infrastructure investment,” said Jeffrey Novak, chief financial analyst for the FAO.
Initially, the FAO analysis saw a profit with the sale of Hydro One shares, but by 2018-19, the overseeing body calculates a loss of $1.1 billion.
It seems odd that the Liberals will not take the FAO’s advice and get a loan for infrastructure, yet Wynne doesn’t think twice about a costly refinance of her Green Energy Act “mistake,” passing billions of dollars in growing debt to the next generation.
Clearly, in either instance, Wynne refuses to listen to the sound fiscal advice of experts and protect the taxpayer. That will be her downfall.
Scott Thompson hosts The Scott Thompson Show! on 900 CHML and is a commentator for Global News.
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