Winnipeg– Manitoba Liberal Leader Dougald Lamont says the power could go out at Manitoba Hydro unless the Pallister Government takes ownership of Hydro’s mounting debt and stops using the Crown Corporation as an ATM.
Hydro is facing steep rate hikes and a shaky financial future, but while Hydro gets the blame the real culprits are PC and NDP governments that have been driving Hydro even deeper into debt by taking in excess of $380 million a year from the publicly-owned utility just to make their own budgets look better.
“Hydro is not the ‘bad guy’. Hydro is in trouble and has to ask for massive rate increases because the PCs and NDP have been hiding their own debt on Hydro’s books,” said Lamont. “If we just had some honest accounting, and the Pallister Government stopped taking money from Hydro, we can avoid big rate hikes as well as a default down the line.”
The Manitoba Liberals say that if the Province stops raiding Hydro, the Crown Corporation will be able to return to profitability, avoid a debt crisis, and start paying down its debt.
Sandy Riley, Chair of Manitoba Hydro, made that exact argument a year ago.
“If we have an investment from the owner of Hydro, which is us, the people of Manitoba, it will allow us to moderate increases overtime that will allow less of an impact on consumers,” said Sandy Riley, Chair of Manitoba Hydro. (CBC Manitoba – February 7, 2017)
Manitoba Liberals said Premier Brian Pallister and his Finance Minister have two options:
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Invest in Hydro by taking responsibility
If the province stepped up and took responsibility for $2.5-billion of Hydro’s debt it would cut the corporation’s debt and the proposed 7.9 percent rate hike in half, prevent any chance of default, and Hydro could pay back the funds when it recovers financially. - Stop taking money from the struggling crown corporationby suspending the collection of funds for water rights, provincial debt guarantee and capital tax until Hydro is restored to financial health. This would save Hydro approximately $2.6-billion over the next seven years.
If Hydro’s debt was cut in half, along with the proposed rate hike based on a household with a current $100 hydro bill, Manitobans could see a total savings of almost $1900 dollars over the next seven years.
Hydro is asking for major multi-year increases of 7.9 percent in order to save enough money from customers to prevent a debt crisis. The increase has been opposed by people across Manitoba, since electricity bills will soar by 50 percent for families, seniors in rural areas, people living on First Nations, and businesses big and small.
Lamont emphasized that under the Liberal proposal, the total debt that Manitobans are responsible for would be exactly the same, since the Province, as owner, is liable for Hydro’s debt, no matter what. The difference is that, like paying off credit cards with a line of credit, the Liberal Plan restructures the debt to make it much safer.
“So long as the Pallister Government is willing to step up with some honest accounting, we can ensure a secure and public future for Hydro and return it to profitability without massive rate hikes,” said Lamont.
“Unfortunately, we have already seen two credit downgrades under Pallister because he gives the impression the province isn’t willing or able to pay its bills. That has to change before it’s too late.”
