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Manitoba considers more private sector work with Crown-owned energy utility

Manitoba Finance Minister Cameron Friesen delivers the 2022 budget in Winnipeg on April 12, 2022 at the Manitoba Legislative Building. The government says it will not privatize core functions of Crown-owned Manitoba Hydro. THE CANADIAN PRESS/David Lipnowski

The Manitoba government says it has no plans to privatize or shut down core functions of its Crown energy utility.

However, it is opening the door to more private-sector involvement in response to an outside report on Manitoba Hydro, and that has the Opposition worried some areas of the corporation will end up in private hands.

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“I imagine in the day-to-day operations, the (Manitoba Hydro) board will continue to ask that question — what is the core mandate of Hydro,” Finance Minister Cameron Friesen, the minister responsible for the corporation, said Wednesday.

Friesen tabled in the legislature Wednesday a 62-page response to a report last year by former Saskatchewan premier Brad Wall, who had been commissioned by the Progressive Conservative government to look at the utility’s past and future.

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Wall’s report said lax oversight by the former NDP government allowed costs to skyrocket on the Keeyask generating station and Bipole Three transmission line, which ended up a combined $3.7 billion over budget.

The spending was a key factor in tripling the utility’s debt over 15 years, and the corporation’s president says the utility is now spending roughly 40 cents of every dollar to service the total debt.

Wall made several recommendations, including selling off or shutting down non-core functions. He also called on the province to consider using private-sector partners for major capital projects to keep costs under control.

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The response tabled in the legislature, written by a three-member expert panel, said the government should look at “various subsidiary elements,” and if they are deemed to not be core to the utility’s mission, they should be sold or closed.

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Friesen said no part of generating, transmitting or selling electricity or gas is on the table.

As an example of a non-core function, he pointed to a recent deal with Xplornet to bring high-speed internet service to remote communities using Hydro’s fibre-optic network. There’s no reason for Hydro to offer that service, he said.

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“Manitoba Hydro is not for sale. Our government’s plan has always been to strengthen and stabilize Hydro,” he said.

The Opposition New Democrats said the statement leaves the door open to privatizing services such as customer call centres.

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“I want to know that when my power goes out, that I can pick up the phone and make a phone call and have somebody at Manitoba Hydro … make sure that my energy is restored,” NDP hydro critic Adrien Sala said.

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Friesen was willing to commit to Wall’s recommendation for more private-sector partnerships, known as P-3s, for major construction projects.

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“I think that P-3 approaches are considered in every single Canadian jurisdiction,” Friesen said.

“I would say, probably, P-3 approaches have been under-considered in this jurisdiction.”

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The government is still working through most of Wall’s report. It expects to have a new energy framework and new mandate for Manitoba Hydro sometime next spring.

That in turn will lead to more details on the utility’s future moves, Friesen said.

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