Thursday, June 24, 2010

Ontario for Sale ...

Yesterday Christina Blizzard from the Toronto Star reported on the sale of what is called Supercorp. It is an amalgamation of LCBO, Ontario Power Generation, Hydro One and the Ontario Lottery and Gaming Corporation. Liberals may pawn crown jewels

Combined these organizations are a large part of the economy of Ontario. Ontario Lottery is on track for $2 Billion in revenues this year. LCBO will be in excess of $4.5 Billion and OPG is on line for about $5.6 Billion in sales.

Monopoly Businesses  
These businesses should be very profitable for Ontario taxpayers because they are in highly regulated monopoly industries. They can dictate their own prices and profits. For example, OPG had a drop in electricity sales of 15% last year. This year they will be raising electricity rates in Ontario 20%. You can bet your ass...ets that if consumptions comes back rates will not go down.

The biggest expenses of all these organizations are the costs of their compensation packages. This includes salaries, benefits and of course gold-plated pensions.

Bright idea
Now the Ontario government wants to liquidate these assets for some quick cash.

Who will buy? Blizzard knows the implications
The only big investors with enough cash are public sector pension funds, such as Ontario Teachers’ Pension Plan and OMERS, the municipal employees’ plan.
Do you really want pension funds running monopolies? Since half the money that goes into those funds comes from taxpayers, aren’t we buying back assets we once owned — with our own money? Taxpayers put money into the pension funds. The funds then turn around and buy liquor stores, casinos and power companies with our money
 The Toronto Star reports:
McGuinty’s government is facing a $19.7 billion deficit this year. If the super corporation is worth $60 billion, selling a 20 per cent share could yield $12 billion from institutional investors such as the Ontario Teachers’ Pension Plan.
One bonus to all this is that McGuinty will have the cash to eliminate the pension shortfalls at Ontario Teachers. They will be able to use the cash they garner from the sale to fully fund the $17 Billion Shortfall at the teachers pension plan.

Imagine that, just before an election.

Bill Tufts
Fair Pensions For All

1 comment:

  1. Thanks Bill ... talk about ineffective policy !!unbeleivable ...