It is very important that the City of Guelph maintains Guelph Hydro as publically owned. We must do this despite neoliberal trends from the Provincial Government, which is shamefully privatizing Hydro One. This privatization is increasing hydro rates, especially in rural communities, reducing long term revenue for the province of Ontario, and taking away an opportunity for Ontario to democratically plan our energy network and better invest in public green energy. If Guelph Hydro is sold off, there will be similar negative results for people in Guelph to what the people in Ontario are facing because of the sale of Hydro One.
83%, of Ontarians, including an average of 8 out of 10 people in Guelph, are opposed to the privatization of Hydro One (and, by extension, the general privatization of electrical utilities), and 200 municipalities (half of the municipalities in the province) have passed motions opposing the privatization. People take this position for good reasons.
Guelph Hydro provides over 100 good, unionized jobs, and at a time when the gap between the rich and poor is widening, and we are experiencing an increase in unemployment and precarious work, the importance of maintaining good jobs cannot be understated.
Guelph Hydro also provides lower prices than private hydro companies. In a recent study looking at costs per customer for people in Ontario, fully public Local Distribution Companies averaged a cost of $409 per year, but fully private companies averaged a cost of at $725 per year. Working class people cannot afford for Guelph Hydro to be sold off and privatized, and the higher costs that would result.
Because workers are in well-paid, unionized jobs, Public Local Distribution Companies also provide a much better service for the community than private companies. On average public companies end blackouts quicker and more efficiently than private companies.
Guelph Hydro is also publically controlled and owned. If it is sold off – this means the Guelph community will lose control over its energy provider. It also means the City of Guelph will lose revenue, to re-invest in its electricity infrastructure and in the city. This loss will also harm the city’s ability to generate revenue shortly after the initial sale. According to the 2015 Guelph Hydro report, Guelph Hydro provided 1.5 million dollars in dividends to the city of Guelph.
Governments and corporations try to justify privatization by saying it brings in much-needed money for things like infrastructure. In reality, though, much more money can be raised, in a much more predictable and sustainable way, by keeping these services public, and by increasing corporate taxes. Ontario is the lowest corporate tax jurisdiction in North America, and the tax cuts of the past 20 years add up to $18 billion per year in lost public revenue . There is simply no way that privatization can provide that kind of money to any government.
A merger with a private company would result in the privatization of Guelph Hydro soon afterwards. As well, a merger with a public company will simply create something more profitable to be sold off in the future. Merging with a public or private company would have several detrimental impacts that clearly offset potential benefits: i) a significant portion of the current revenue generated by Guelph Hydro will be shared with the partner, ii) the staff of both companies will be reduced, with arguments about company efficiency – taking away good jobs from the Guelph community, iii) investments on the grid of our city will be reduced as the merging companies now have a greater area to serve, iv) decisions about distribution rates in Guelph, and renewal of our city’s grid will not be made with Guelph have as much of a priority as today.
We are against the privatization of hydro and also the merging of hydro. Both privatization and merging of Guelph Hydro will result in workers losing jobs, and much less or no control over Guelph Hydro by the city council and by extension people in the Community.
Don’t sell off Guelph Hydro. Instead, enhance it as a public service that provides good jobs and decent, affordable electricity rates.
Statement presented by the Communist Party of Canada – Guelph, at the Special Council Meeting about the status of Guelph Hydro held at the City Hall on February 15th, 2017.