March 6, 2012 - No. 26
Oppose Government's Ultimatum to Teachers
• This Week
in the Legislature
Discussion of the
• What It Means to Be in "Everyone's
Interests" - Dan Cerri
• Hospitals Under Attack in Every Which Way
- Doug Allan, Ontario
Council of Hospital Unions/CUPE
Unprecedented Government Attack on Teachers
• "Bankruptcy Expert" James Farley
to Head Government Negotiating Team
• Oppose False Choices to Justify Wrecking
Public Education - Laura Chesnik
• Teachers and School Support Staff Oppose
Attempts to Tear Up Collective Agreements - Christine Nugent
Privatization of Hydro
• Toronto Hydro Workers Say No to Job Cuts
• McGuinty Opens Space for Brookfield Vultures
- Jim Nugent
• Example of Northern Ontario Confirms
Anti-Social Impact of Privatization
This Week in the Legislature
This past week in the legislature included debates on
Bill 11, An Act respecting the
continuation and establishment of
development funds in order to promote regional economic development in
eastern and southwestern Ontario. It is an integral part of the
Liberal's plan to attract and support business in different
areas of the province.
Debates about the bill included discussion on the
handout of money to
the monopolies without guarantees. On Thursday, March 1, Taras
MPP for Essex, said:
"What we're saying is, give us some job guarantees.
Provide the mechanisms, within the context of this bill, to have the
checks and balances so that we don't get into another scenario such as
the one that played out in Chatham, with Navistar, where they left that
region, that community -- 1,100 jobs -- bags of money
in hand, and the community at a tremendous loss."
MPP Theresa Armstrong (London-Fanshawe) spoke of the
concerns in her riding with the shutdown of the Caterpillar plant.
"When I look at Bill 11,
the Attracting Investment and
Creating Jobs Act, it really makes me think that I don't want
example I have in my riding to happen again. This government needs to
learn that when we give funds to companies, there have to be strings
attached to those jobs."
Other debate about the bill expressed concern over the
relatively small amount ($20 million) and that the program is
being funded with a reallocation of funds, not with any new money.
The debates in the legislature demonstrate that the
political system itself comes under the dictate of monopoly right. The
discourse is that there is no alternative, that Ontario must invest in
the monopolies to attract businesses and jobs, and that the job of the
legislature is to simply debate the details of these investments.
In this situation, it is not realistic to try to hold politicians' feet
to the fire. The issue is sovereignty and the right to decision-making.
Workers and people in Ontario have the right to determine for
themselves, in coordination with the political system, how the economy
should be organized. This requires a renewal
of the economic and political systems.
Discussion of the Drummond Report
What It Means to Be in "Everyone's Interests"
The more the Drummond Report is analyzed, the more it
reveals how the rich and their political representatives are
trying to convince the working class in Ontario that their interests
are the same. It is part of the attempt of the rich and their political
representatives to resolve the crises in the economic and
political systems in their favour.
In his message to the
Government of Ontario, Drummond
writes: "A wide-ranging reform effort will reinforce the notion that we
are all in this together, that all Ontarians can support the reforms
because they will benefit in the end from these changes." Drummond's
message is a particular example of the rich
trying to resolve their crisis by presenting the interests of the rich
as being the same as workers' interests. It is typical of ruling class
thinking to present society as if it were free from class interests.
McGuinty is presenting his own brand of "everyone's
interests" by playing the pragmatist. He says that the recommendations
of the Drummond Report need to be chosen and implemented wisely through
pre-budget consultations in the legislature and with the people of
Ontario. He portrays himself as being
different from PC Leader Tim Hudak who wants all of the
recommendations implemented immediately. In this way, McGuinty presents
himself as looking out for the interests of all Ontarians, not just
Despite all of the
rhetoric, the reality is that
at the same time, McGuinty is trying to implement the main purpose of
Report, which is to carry on the anti-social offensive, while
attempting to preserve the appearance of legitimacy of the system, in
general, and of his
power, in particular. If McGuinty is successful, he will be seen
by the electorate to be looking out for the greater good by not giving
into all of the recommendations, but at the same time he will deliver
agenda of the rich.
Workers and their allies must pay attention to how
McGuinty will implement the Drummond Report. It must not pass! The
workers and people of Ontario do not share the same interests as the
rich and their political representatives. They must look at ways of
resolving the crises in the economic and political systems
in their favour.
Hospitals Under Attack in Every Which Way
The implications of the Drummond Commission
public health care system in Ontario are discussed in an article by
Doug Allan of the Ontario Council of Hospital Unions/CUPE, entitled
"Hospitals Under Attack in Every Which Way." It was published on the
Ontario Council of Hospital Unions/CUPE blog "Leftwords: Defending
Public Healthcare." Posted below are
The Drummond Commission into the reform of public
Ontario has proposed the province shrink and privatize hospital
Funding: Drummond has recommended that health
care funding be
limited to 2.5 per cent until 2017-18. This is considerably less than
the 3.6 per cent increase proposed by the Liberals not long before the
election, a drastic reduction in health care funding increases, which
have averaged 7 per cent
since the Liberals came to power eight years ago. [prior to the election the Auditor General
estimated that for McGuinty
to realize his election promise to limit health care spending would
amount to $1 billion and require extending the hospital wage freeze an
additional two years -- OPF Editor's Note.]
Hospitals: The main target for Drummond cuts in
spending is hospitals. Diverting patients from hospitals is central.
[...T]he funding the Drummond Commission proposes is not adequate to
strengthen non-hospital services -- quite the contrary. Replacing
hospital services by home and community
care is not a new policy -- it has been government policy for decades
[resulting in] thousands of hospital bed cuts, dangerously high
hospital bed occupancy levels, cancelled surgeries, backed up emergency
rooms, EMS "code zeroes" (which occur when no ambulances are available
for emergency 911 due to delays
at overcrowded ERs), and a privatized home care system which has been
in crisis for years. There are now 24,000 people on waiting lists for
long term care services and 10,000 people on waiting lists for home
Restructuring: Drummond suggests more
amalgamations and more
specialization by hospitals. In effect, hospital services would be
moved from local communities to more distant, centralized locations.
[P]art of the rationale is to introduce fee-for-service funding for
and force hospitals to compete to provide services. Services will be
moved out of local hospitals into those that provide larger volumes for
lower prices. Hospitals will specialize so they would no longer provide
such a range of services and patients would have to travel to different
hospitals or private clinics to get
Hospitals as acute care
providers only: ...The
recommends: "Divert all patients not requiring acute care from
hospitals and into a more appropriate form of care that will be less
expensive ..." There are thousands of hospital beds that are not
care -- providing rehabilitation services, complex
continuing care, mental health care, restorative care, and long term
care. There are also millions of hospital procedures provided to
non-acute patients in outpatient clinics. Removing these services from
hospitals would have a very serious impact on hospital services and
Privatization: Drummond recommends health care
[and] also proposes the introduction of contracting for hospitals
services. Home care compulsory contracting has led to low wages, high
staff turnover, and breaks in the continuity of patient care.
Private, for profit clinics providing surgeries and
services through fee for service funding is one privatization
initiative Drummond especially prefers.
Arbitration: The Commission attacks the
system used to settle collective bargain disputes in essential service
industries (such as hospitals). ... For the interest arbitration
work, arbitrators must be acceptable to both parties, which is why
arbitration has traditionally rested
on a consensual basis, with the arbitrator chosen by the parties
themselves in the majority of cases.
[...] The Commission would replace this system with one
"independent tribunal or commission" would establish and manage a
roster or a panel of arbitrators who would be assigned to cases without
any input by the parties affected.
Other Commission recommendations:
- Where feasible, services should be shifted to
- Increase the use of personal support workers
- Plans that extend out-of-hospital services such as those for
outpatients should not be entertained
- Resist the natural temptation to build many more long-term care
- Establish incentives to discourage Family Health Teams from referring
patients to acute care
- Put to tender more service delivery
- Reduce Ontario Drug Benefits for seniors
- Do not let concerns about successor rights stop
make sense and are critical to successful reform. Successor rights as
currently defined do not necessarily limit the right of the government
[...] Inherited agreements do not live forever; provisions can be
accepted initially and bargained differently
when they come up. [...]
Unprecedented Government Attack on
"Bankruptcy Expert" James Farley to Head
Government Negotiating Team
Banner from the time of
Stelco's bankruptcy fraud, denouncing then-Justice Farley's treacherous
role in the affair.
The provincial government has appointed former Justice
to spearhead the implementation of its agenda of forcing concessions
from teachers in their upcoming contract negotiations. The current
collective agreements between teachers and school boards across the
province expire on August 31.
James Farley is Senior Counsel with McCarthy
Tétrault, a law firm
that specializes in providing legal advice to corporate clients in
bankruptcy and restructuring cases. Before joining McCarthy
2006, James Farley was an Ontario Superior Court Justice. It was
Justice Farley who presided over the
Stelco bankruptcy proceedings which, amongst other things, were used to
try and force Local 1005 USW
in Hamilton to open its contract and make concessions to Stelco.
Local 1005 refused to make concessions and fought to
Stelco was up to. Stelco was far from broke -- steel prices were up and
its order books were full throughout the bankruptcy restructuring. Yet
Steclo's suppliers, unsecured creditors and common shareholders were
shafted. Secured creditors came out okay and a few hucksters made the
score. Because of Local 1005's resistance to these schemes, Stelco's
CCAA bankruptcy protection was thoroughly exposed as a fraud and
Justice Farley earned notoriety for his role in overseeing and giving
his judicial seal of approval to the
whole sordid affair.
The provincial government recruited this "expert" in
"bankruptcy restructuring" to try and overwhelm teachers in these
The government has also
unleashed a media
offensive to paint teachers' remuneration as over the top,
and a drain on society. Finance Minister Dwight
Duncan for example said the government has "no choice" but to bring
down teachers wages and working conditions. "You simply cannot get at
this deficit without significant savings achieved in the wages and
benefits... in the public and broader public sectors."
Teachers should not accept that there is "no choice" but
to embrace concessions
and cuts to government funding of necessary social programs
in order to create a favourable "investment climate" in the hope that
at some undetermined point in the future it will lead to prosperity.
This is not an option! What will be
the outcome for education in Ontario if teaching conditions are driven
down? Teachers working conditions are the learning conditions for the
youth of our society. By fighting for their rights and for the
education our youth deserve, Ontario teachers will show that far from
there being "no choice," human-centred solutions
to this crisis are both necessary and possible.
Oppose False Choices to Justify
Wrecking Public Education
Providing a high-quality
public education system goes hand in hand
with building a modern, innovative and forward-looking society. This is
why teachers, support staff, administrators, trustees, parents and
students across Ontario are concerned about what the McGuinty
government is up to. The recommendations
in the Drummond Report, as well as the appointment of retired Justice
James Farley to lead negotiations with education workers indicate that
the McGuinty government is setting the stage for an assault on the
public education system.
Many are rightfully angered by these developments.
Ontario election, McGuinty tried to paint Hudak as a disciple of Mike
Harris, while he himself represented a "kinder, gentler" Ontario. Now,
we can see that McGuinty is following the same direction as Harris:
attack the wages and working conditions
of those in the public sector by claiming that this is necessary to
make the system "sustainable."
The millions McGuinty hopes to remove from public
negotiations and new legislation will not go to benefit the students of
Ontario, their families nor their communities. It will go into the
nests of the international financial vultures represented by Don
Drummond who hold Ontario's debt and
deficit. A debt and deficit that was incurred by the McGuinty
government and the Harris/Eves government before it, through
pay-the-rich schemes. These schemes have handed billions of Ontario's
product to international monopolies operating in Ontario through
"incentives," tax cuts, and various bailout schemes.
These monopolies also hope that more underfunding of the public
education system can be used to present privatization as a solution and
thereby syphon more money out of the public treasury. This is already
being done in the day care sector in various communities in Ontario for
Education workers are being bullied by the province and
media outlets in order to try to get them to accept false choices to
cover up what is really taking place. The bullying goes like this:
accept bigger class sizes, fewer supports and cuts to your pensions,
wages and benefits in order to help save the province
from economic ruin. In this way we are being told to choose between:
our well-being and that of our students; our communities; and the
province. This is a false choice. Firstly, our well-being is
inseparable from that of our students and our communities. Secondly,
how can harming the well-being of the people of
Ontario benefit the province? The condition for the well-being of the
province is the well-being of its people, especially its youth. We in
the education sector are at the forefront of proposing reforms to
improve the quality and effectiveness of the education system; however,
we won't accept false choices in order
to impose an agenda that will harm our interests and those of our
students and the communities in which we live.
Education workers do not accept that the public
should be undermined so the economy can be used to keep paying the
rich. Our experience with the McGuinty government shows that we should
be our own saviours, rather than hoping this or that political party in
the legislature will protect the
education system everyone relies on. It is up to us, alongside the
other workers in Ontario and everyone else who can be won over, to do
Teachers and School Support Staff Oppose
Tear Up Collective Agreements
The Ontario government has
launched an outrageous attack
entire public education system, taken measures to deny the education
workers their rights to have a say in their livelihoods and have
dictated a reduction in their real wages and benefits.
The government of Ontario
has outlined a timetable for
elementary and secondary teachers and support staff for a Provincial
Discussion Table (PDT). The aim is to provide a framework for the
settlement of collective agreements for this round of bargaining. The
opposite is taking place.
At a February 21 teleconference between Premier
McGuinty, Education Minister Laurel Broten and the teachers'
organizations, it was made clear that communications would be one-way
with no opportunity for the teachers to even ask questions.
On February 22 the government's
parameters for the
2012 PDT were released and as identified on the ETFO
website they included
1. A two-year term for the next collective agreement
with a zero per cent salary increase in each year.
2. Retirement gratuities to be frozen as of August 31,
both a sick leave bank and salary perspective. All accumulated sick
leave not used to calculate this frozen gratuity would be forfeited. No
more sick leave banks. Each teacher to receive six days per year at 100
salary and 24 weeks at two-thirds salary,
not accumulated or carried forward.
3. A 2012 valuation of the pension plan with a view to
increasing the government's level of contribution. The result of this
would be that the benefits of the pension would have to absorb all
necessary funding top-up obligations.
4. All teachers currently working their way either up or
salary grid to be frozen in place for two years with no future
adjustments to recognize the missed steps.
5. Restructure salary grids.
To date, two of the
teachers' organizations have responded.
The Ontario Secondary School Teachers' Federation
"This is an unprecedented attack on both collective
the collective bargaining process. During the one hour, time-limited
meeting, the government representatives could not provide answers to
questions about process, timing and impact of the proposals tabled...
OSSTF/FEESO may be required to
take action to defend our collective agreement provisions and our
collective bargaining rights."
The Elementary Teachers' Federation of Ontario (ETFO)
"We were told that the government was interested in
matters before mid-March. To say we were insulted is an understatement.
We posed several questions about process that the government team was
unable or unwilling to answer. ETFO was invited back to discuss this
document on March 5 and
6. We find the tone and, most significantly, the content of the
government's parameters to be offensive to all ETFO members and cannot
be a party to what amounts to deep and mean-spirited strips to our
collective agreements that would negatively affect every member at
every stage of their career. The PDT is not
part of the Ontario Labour Relations Act to negotiate a
collective agreement with each school board."
Privatization of Hydro Infrastructure
Toronto Hydro Workers Say No to Job Cuts
On February 27, hundreds of Toronto Hydro workers
demonstrated against job cuts at the headquarters of Toronto Hydro.
Toronto Hydro is the City of Toronto-owned electrical power
distribution company. Workers were protesting against the electrical
utility's plan to cut its 1,700 person workforce by 20 per
cent. The electrical utility workers' demand is: No Downsizing of
Toronto Hydro has already cut 60 non-union jobs. Four
hundred and fifty unionized workers were offered early retirement and
buyout packages, which were accepted by 130 workers. There are still
about 170 unionized workers under threat of layoff. Hydro workers have
rejected the need for any job reductions
since the utility has more work than it can handle. Cuts, the workers
say, will overload the remaining workers and put maintaining the
electrical service in jeopardy.
Toronto Hydro workers are represented by CUPE Local 1.
The local president John Camilleri said at the rally, "There should be
absolutely no downsizing of workers. There's no shortage of work. In
fact, there's a growing backlog of maintenance work to be done. If
layoffs occur, they will not only hurt the
workers but would seriously damage Toronto's publicly-owned utility."
If there was a layoff, it
would affect younger workers
the most, including some clerical workers, call centre workers, system
support workers and 100 power line technician apprentices recently
hired for the capital and maintenances projects currently underway. The
current round of job cutting at Toronto Hydro
follows its decision in early February to end the contracts of trades
contractors working on capital and maintenance projects. It is
estimated that terminating these contract will eliminate 700-1,000 jobs.
Toronto Hydro says that the job cuts are necessary
because the Ontario Energy Board (OEB) turned down a request for an
increase in the rates Toronto Hydro can charge residents and businesses
in Toronto. Rates charged by local distribution utilities are regulated
by the OEB. The utility had requested rate increases
to cover capital and capital maintenance costs previously approved by
the OEB. The OEB told the utility to look for internal "efficiencies"
before any increase would be considered.
In a statement released after the OEB decision on
January 5, Toronto Hydro said, "Toronto Hydro's capital spending in
2011 totalled $378 million. Today, the OEB has cut the capital budget
by approximately 65 per cent. This has far reaching ramifications that
will impact not only customer service, safety and
reliability, but employees within the utility and other industries and
suppliers. Further, with this decision, the asset replacement cycle has
been changed to approximately 97 years from the previously OEB-approved
In response to the OEB's advice about finding internal
efficiencies, the Toronto Hydro said it "has made
significant productivity improvements. The utility currently operates
with 35 per cent fewer employees than were in place prior to the
amalgamation of the former metropolitan Toronto
Although Toronto Hydro's only shareholder is the City of
Toronto, it is set up as a corporate entity, with a highly paid CEO and
the holders of its $1.2 billion debt enjoying interest payments of $75
million a year. As such, it has the capital-centred approach to any
problem: squeeze workers and squeeze service
rate payers. But several other powerful interests with the same
approach are in play in connection with Toronto's electrical service.
They have competing claims on the immense value added to the electrical
service every year by Toronto Hydro workers and on the $2.6 billion a
year revenue stream extracted from
The construction and real estate industries, for
demand both electrical servicing for $14 billion a year in new
construction and super service maintenance levels on high rent areas
like the downtown core. Other interests are pushing for further
privatization, as in 2008 when Toronto Hydro's profitable
telecommunications unit was chipped off and sold to Cogeco. Rob Ford's
gang is pushing for selling off the city's shares in Toronto Hydro as
his campaign to "sell everything not nailed down."
The biggest claim
though is made by the Ontario government. The OEB directs $2.06 billion
of the revenue Toronto
Hydro collects from ratepayers into the warren of highly privatized
power generation, distribution, marketing and financing enterprises set
up by the Harris government when it busted up Ontario Hydro. This
practice has continued to the present McGuinty government. The OEB also
Toronto Hydro ratepayers pay their "fair share" of the McGuinty
government's green energy fraud. An outrageous example is McGuinty's
$6.5 billion handout to Samsung. This secret deal was never approved by
any regulating body, but the OEB dutifully passes it on to local
Other special levies and taxes are imposed directly on
the utility by the province, such as the annual "payment in lieu of
taxes" Toronto Hydro is forced to pay into the Ontario Hydro stranded
debt fund. In 2010 Toronto Hydro was forced to pay $25.6 million of its
net revenue to this fund, in addition to the stranded
debt charges it collected from ratepayers. The OEB pretended to be
protecting ratepayers when it denied Toronto Hydro's recent rate
increase request. But with one-fifth of Ontario's energy revenue coming
from Toronto utility ratepayers, the OEB was just making sure there is
more available for McGuinty to squeeze
from Toronto electricity users.
It is difficult to sort out
the issues at Toronto Hydro
with so much spin coming from the different powerful players and their
respective media supporters, which marginalizes utility workers and
utility ratepayers as if pawns on a chessboard. It is
suggested, for example, that Toronto Hydro management
is using job cuts and cancellation of trades contracts as a gambit to
put pressure on OEB. But there can't be any doubt about the justness
and veracity of the stand that the electrical utility workers have
taken against the job cuts and in defence of the services they deliver.
The information workers are providing about the threat
to the viability of the system if the work is not done is entirely
reliable. It is confirmed by the high frequency of service disruptions
and the number of utility vault fires and other major dangerous
incidents. The backlog of maintenance and equipment renewal
is also a matter of record. The depreciation of distribution line
assets, for example, has reached the point where a dollar spent on
distribution line assets results in only a forty cent net increase in
assets -- assets are depreciating faster than they can be replaced.
Utility workers have a right
to a livelihood at Canadian
standards for the work they do. There is necessary work for them to do
and there should be no job cuts. Electrical utility rates are a heavy
and growing burden on the backs of other working people, but electrical
utility workers earning standard Canadian
wages and having job security are not the cause of this burden. The
claim by the OEB that Toronto Hydro has an "efficiency" problem is just
a self-serving attempt by the provincial government to inflame service
users against workers providing electrical services.
There are egregious examples of Toronto Hydro's
management using their executive privilege to siphon a few millions of
dollars out of the utility every year and scores need to be settled for
this arrogant use of privilege. But the cause of job insecurity, high
electrical rates and system viability at Toronto Hydro
is on a completely different scale. Billions of dollars are siphoned
out of Toronto Hydro and other municipal electrical utilities every
year by the McGuinty government to fund its privatization and
other pay-the-rich schemes in the electrical sector.
Finding the political means to hold McGuinty and
other bankrupt politicians to account for this is the task facing
working people, including those who make their livelihoods
providing electrical services and those who rely on and pay for these
services. Support by all of Toronto's working people for the
resistance of Toronto Hydro workers to job cuts is a starting point to
finding a way forward.
McGuinty Opens Space for Brookfield Vultures
The Ontario Energy Board (OEB) is currently considering
proposals submitted in response to a call from the Minister of Energy
and Infrastructure for the construction of a 230kV double circuit power
transmission line from Thunder Bay to Wawa (near Sault Ste. Marie) with
continuous carrying capacity of 466
MVA. The project is known as the East-West Tie (EWT). The proposals
being considered are for development, construction, ownership,
operation and maintenance of the EWT.
The privatization rules established by the Harris
government's Electricity Act, 1998
and kept in place by the McGuinty
government require the OEB to consider contract proposals from private
sector companies competing with Hydro One, which owns and operates 98
per cent of Ontario's grid. Seven international
consortiums are scrambling to get their hands on this lucrative
contract. They are competing not only for the sake of the guaranteed
profits from this deal, but also to be dominant players in the game for
the multi-billion dollar deals available across Ontario's electricity
The estimated cost of the EWT project is $600 million,
part of the McGuinty government's $9 billion plan for increasing and
refurbishing the power distribution system up to 2030. These costs will
be paid by electricity ratepayers throughout Ontario as distribution
fees added to their electric bill. The OEB sets
these fees and guarantees the return on investment to the transmission
line financiers, designers, builders and operators.
The EWT will join the electrical grid in north western
Ontario to the grid in the north east. The EWT will also provide
increased grid capacity for power generated in the region to be
inputted to the grid. Since the grid is currently operating at
capacity, increasing transmission capacity and connectivity will
bringing on line new hydro and other renewable energy projects planned
for the region. It will also facilitate the schemes of international
monopolies that capture hydro power plants by purchasing paper mills,
saw mills, and other enterprises for the purpose of selling the hydro
Throughout Canada monopolies frequently purchase mills
and smelters having their own hydro power plants with the intention of
shutting down production and selling the hydro power to the grid. These
moves usually also involve bankruptcy frauds to loot pension/benefit
plans of the mill or smelter workers
and often destroy one-industry towns. High prices for electricity are
the incentive for this and in Ontario, the premium prices paid for
selling renewable energy (including hydro) to the grid are added
incentive for wrecking mills and smelters.
According to press from Thunder Bay, the likely winner
of the EWT contract will be a consortium with three partners, known as
East-West Limited Partners (EWT LP). One of the partners is a company
owned by six First Nations on whose land the project will be built.
The other two are Hydro One, which
will build and operate the project and Brookfield Asset Management
which will provide financing.
retirees protest outside Brookfield's offices in Gatineau, Quebec,
January 15, 2010.
Brookfield is an aggressive international monopoly based
in Toronto and New York. It is notorious amongst Canadian workers for
wrecking of productive enterprises, causing job losses and looting
workers' pension plans. Brookfield was instrumental in wrecking Stelco
and handing this national treasure over to U.S. Steel. It has
specialized in shuttering paper mills and saw mills in
the Maritimes, in Quebec and across the country to steal the power from
the hydro plants connected to the mills and helping finance their big
scores by looting pension plans of the workers they throw on the street.
Now Brookfield is expanding rapidly into the Ontario
public hydro sector to occupy the private sector space created by
Harris and McGuinty. Linking up with Hydro One on the EWT power
distribution project will serve Brookfield's strategy of becoming a
dominant global force in renewable power generation.
A week before the bid for the EWT project was submitted, Brookfield
consolidated all of its electricity holdings into one company,
Brookfield Renewable Energy Partners, to prepare for competing in
Canadian and global markets.
The consolidated company will have assets of $13
billion. Eighty-six per cent of those assets are in hydro power, with
197 hydro power facilities in Canada, the U.S. and Brazil. Press
on the consolidation quote Brookfield as saying that now it would not
be limited to buying a hydro dam here or there,
but can use this pool of assets to leverage enough financing to buy
whole electrical systems.
The prospectus Brookfield issued to the financial
oligarchy on its recent consolidation describes what a great deal the
guaranteed profits from privatized hydro power is:
"Brookfield Renewable Energy Partners (BREP) will have
highly stable, predictable cash flow sourced from a diversified
portfolio of low operating cost, long-life hydroelectric and wind power
assets that sell electricity under long-term, fixed price contracts
with creditworthy counterparties. Virtually all of BREP's
generation output will be sold pursuant to power purchase agreements to
public power authorities, load-serving utilities, and industrial users
or to Brookfield or its affiliates. The power purchase agreements for
BREP's assets will have a weighted average remaining duration of 24
years, providing long-term cash flow
Brookfield is promising the oligarchs guaranteed
cash-for-life from privatized electrical services. But this tribute
handed over to the international financiers has to be taken somehow
from the electrical power generation, distribution and marketing
system. It can only come from the workers producing the services
and fees on the service users. When the tribute is squeezed from the
workers and service users, it disappears forever from the economy.
The McGuinty government has an electricity capital plan
of $45 billion for 2010-2030 underway and is using a high level of
private sector partnerships. The recent report on reform of Ontario's
public sector by privatization ideologue Don Drummond pointed to the
EWT LP consortium and the EWT project as
an example of how these partnerships should be set up. But Harris,
McGuinty and Drummond are taking Ontario in the wrong direction with
their privatization schemes. They increase the claims on Ontario's
wealth by the international financial oligarchy, driving down Canadian
living standards and weakening the
Example of Northern Ontario Confirms
The anti-social offensive
has already seen various
public assets taken out of public control and handed over to private
interests. All of this has allegedly been done on the basis of
efficiency and other high ideals supposedly in the public interest.
Far from any benefit to the
people, prior examples of
privatization show precisely the opposite, that these changes are at
public expense to benefit the narrow interests of rich. Take the
example of privatization in Northern Ontario. In a February 25 Letter
the Editor of the northwestern Ontario newspaper the Chronicle
Journal, Paul Filteau, points out the
negative consequences of privatization on the region. This is his
conclusion despite being a former consulting partner in privatization
of government services. He writes:
"Before we leap into further privatization of government
services we should first examine the results of those already
privatized from a Northern Ontario perspective. E.g., tourism signage,
snow plowing, hydro generation and transmission and medical transport,
to name a few.
contracts actually foster monopoly
and oligopoly rather than competition since they are for fixed periods
and with one company that usually dominates the service area.
"Some of the questions that might be asked: does
privatization actually save money; do we maintain local employment and
control of these services; does privatization maintain fair wages; is
the local level of service maintained or improved?"
To illustrate his point, Filteau notes how in British
Columbia, snow plowing and other highway maintenance is done through
local district maintenance corporations, thus retaining local expertise
and revenues to develop the local economy and infrastructure. He also
points out that with privatization the remuneration
means those few at the top get a lot while employees' wages, taking
money out of the local economy. He also cites corruption, by the CEO at
Hydro One in 2002 and now the ORNGE air ambulance service, as another
negative outcome of privatization.
Filteau further notes that, "Here, in Northern Ontario I
understand control of much of this work has gone off shore (Switzerland
and Great Britain). One can only wonder, since it is us who does the
work locally, why are the profits going elsewhere?
"Presently, hydro transmission is being upgraded and
expanded with a new 230,000-kilovolt tie line between Thunder Bay and
Wawa. This work will likely go to private-public consortiums of local
and Toronto interests such as Brookfield Power. While it's good the
First Nations are part of these agreements,
we should question who is getting most of the benefit, here or Toronto?
After all, it is our power."
Filteau adds that, under the North American Free
Trade Agreement, once a public service if privatized, it can't be
returned to the public sector and also opens the market up to bidding
by U.S. companies.
This is to say nothing of what is being planned in the
Comprehensive Economic and Trade Agreement between Canada and the
European Union, which will greatly exacerbate the nation-wrecking of
existing neoliberal trade agreements.
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