One of the most enjoyable aspects of following politics is checking in with politicians once they’ve left office. It’s only then that you find out what they really think about the issues, when they’re free from the constraints of caucus solidarity and being a team player.
So it was with considerable interest that I moderated a discussion in Toronto last week featuring three former Ontario finance ministers: the NDP’s Floyd Laughren (1990-95), the Progressive Conservatives’ Ernie Eves (1995-2001), and the Liberals’ Dwight Duncan (2007-13).
Like all cabinet ministers, they had to be good soldiers in their day, toeing the party line and backing up their respective premiers (Bob Rae, Mike Harris, and Dalton McGuinty), leaving not a shred of daylight between their position and their bosses’.
But having left public life, they are far freer to tell us what they truly think about the issues of the day — and, boy, were they full of surprises at this particular gathering of the Ontario Energy Association’s Speaker Series.
“None of our political parties is telling the truth about the electricity situation in Ontario,” said Duncan.
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“We’ve never had an open, transparent discussion about the cost of electricity,” echoed Eves, who was also Ontario’s 23rd premier.
These two should know. Both of them threw market thinking out the window and, bowing to political pressure, used the public purse to subsidize electricity prices. And in both cases, the solutions brought immediate political relief — but they also kicked the financial can down the road for future generations of taxpayers to pick up.
But even Laughren, Eves, and Duncan have been astonished by the current Liberal government’s solution to tamping down public outrage over high hydro prices.
“We’re going to borrow $19 billion today and pay back $45 billion decades down the road so we can have cheaper prices now,” Eves said, shaking his head. All three ministers lamented that the government seems to be more focused on coming up with temporary fixes than on having adult conversations about the extent to which the public purse should be used to subsidize electricity prices, and whether manufacturers should get special rates in the interest of making Ontario more competitive.
On the subject of the current government’s partial privatization of Hydro One, all three ministers veered from their former parties’ positions.
The current NDP wants to put the electricity-distribution company back in public hands. But, Laughren readily admitted, “I don’t think there’s enough cash in the bank to do that.”
Eves was finance minister when the PC government of the 1990s first tried to deregulate and privatize Ontario Hydro. But during last week’s discussion he said that, in selling off the majority of Hydro One, the current government has made a big mistake.
“Hydro One has a crucial public-policy mission,” Eves said. He argued that only a minority of the shares should have been sold. (The Liberals have privatized 60 per cent of Hydro One.) “What’s next? Do we sell off our health-care system? Our social-assistance system?”
But perhaps the most surprising answer came from Duncan, the former Liberal minister, who not only approved of selling off Hydro One, but also said, “I’d sell off the LCBO, OLG, and OPG, too!” — referring to the provincially owned liquor store, the lottery and gaming corporation, and the huge player in electricity generation. “I think they should all be privatized.”
Eves’s position was no doubt influenced by the fact that Mike Harris’s PC government sold Highway 407, which became the first privately built and operated toll highway in the province. “I sold it for $3.5 billion, and I’m still getting hell for it,” he said. “I should have sold less than 50 per cent of it, and the province would still be making money from it.”
When Duncan asked whether Eves had ever had responsibility for Hydro One, the former premier answered, “Oh, yeah — I fired the whole board.” But Duncan pointed out if the government is still the majority shareholder of these Crown corporations, political realities will inevitably come into play, “and the government will continue to order them what to do” — in which case, market discipline will never happen.
All three men brought in controversial budgets in their day. Laughren famously promised to fight the recession of the early 1990s rather than the deficit. But interest rates were higher then, and Ontarians quickly soured on the province’s scary-looking bottom line.
It was Duncan, now a senior strategic adviser for McMillan LLP, who brought in the province’s highest-ever deficit — $19 billion, during the worst of the Great Recession. But with fears of economic catastrophe then at a generational high, those Liberals weren’t punished for Duncan’s spending. In fact, they were re-elected in 2011.
While all three ministers were downright horrified by the size of the debt the current government is prepared to run, they were also highly skeptical of PC leader Doug Ford’s promise to “drive efficiencies” to find four cents of savings in every dollar the government spends.
“That is a laughable statement to make,” said Laughren, former chair of Laurentian University and chair-elect of Sudbury’s Health Sciences North. “He should be called out on that. It’s a scam.”
Even Ford’s fellow Tory sounded skeptical. “Two cents on every dollar is relatively easy to find,” insisted Eves, who now fills a variety of board and consulting roles in the private sector. “Thirty-five hundred to 8,000 public servants retire every year. Just don’t replace them. But four cents? That’s hard.”
Duncan said that whoever forms the next government (and, for the record, he thinks the Liberals can be re-elected) will get two phone calls at 9 a.m. on June 8, the day after the election.
“Those calls will be from [bond-rating agencies] Fitch and Standard & Poor’s, and they’ll be wondering how the heck the government intends to bring its budget back into balance.” Duncan fears Wall Street money-spinners may soon fear buying Ontario’s debt, and in his last speech as finance minister, back in 2013, he referred to that massive $325 billion obligation as a “ticking time bomb.”
There’s an old saying in politics: where you stand depends on where you sit. And with Laughren, Eves, and Duncan sitting outside the Ontario legislature, their responses to the province’s problems have become a whole lot more interesting.