Tories claim stranded debt payment now tax grab

Wilson said the Tories believe the government wants to generate extra revenue by keeping the debt payments going to help subsidize its green energy plan, citing the lack of details surrounding a $7-billion contract with the Samsung Corporation to provide wind energy in Ontario.

Jim Wilson

by ELLWOOD SHREVE, Chatham Daily News

Ontario Progressive Conservatives are calling for a forensic audit of the stranded debt from Ontario Hydro after learning payments by taxpayers are being extended by six years.

Simcoe-Grey MPP Jim Wilson, former energy minister under the Mike Harris PC government, spoke about this issue with members of the media Thursday at the transformer station on Maple Leaf Drive in Chatham.

He said the debt repayment for ratepayers was scheduled to be finished by 2012, but the Liberal government has quietly extended the payments to 2018, at $1 billion annually for the extra six years.

Wilson said the Tories discovered in a November report from the Ontario Electricity Financial Corporation — which he said he created to manage repaying the stranded debt — showing taxpayers have already paid $7.8 billion “so there’s no reason to continue the charge.”

He said the government is claiming there is “a whole pile of interest, which they can’t justify.”

Wilson questioned the validity of that claim, noting the government is in the lowest interest rate market seen since the Second World War.

“But we think taxpayers have been paying more than $7.8 billion, but we don’t know the bottom of that,” he said.

“We think, in sneaky way, Mr. McGuinty is trying to make this into a permanent tax grab,” Wilson added.

However, Wilson’s numbers don’t jive with figures provided by Chatham-Kent Essex MPP Pat Hoy.

An e-mail from Hoy, who is travelling across Ontario as chair of a public budget consultation process, said the debt retirement charge was slapped on Ontario energy bills in 1999 under the ruling Tory government, which failed to restructure the electricity sector.

Hoy claims the stranded debt rose by $1 billion under Tory rule from 1999-2003 to $20.5 billion from $19.5 billion.

He said the stranded debt is currently $5.7 billion lower than it was in 2003.

Hoy added, to date, $7.8 billion has been collected under the debt retirement charge with $5.7 billion used to pay down the principal.

He said the balance of $2.1 billion has gone towards a number of other costs, including interest on debt and covering the cost of a rate freeze by the Tories, which he added cost more than $1 billion as a result of that government’s failed experiment with deregulation.

Wilson said when Ontario Hydro was dismantled after going bankrupt, the total $34 billion debt was shared between newly created companies Ontario Power Generation and Hydro One.

He said $7.8 billion was left over for the public to pay, noting an identifiable charge was put on hydro bills, which goes directly to paying off the stranded debt.

Wilson said the Tories believe the government wants to generate extra revenue by keeping the debt payments going to help subsidize its green energy plan, citing the lack of details surrounding a $7-billion contract with the Samsung Corporation to provide wind energy in Ontario.

Wilson said wind energy proposals were brought to him 15 years ago when he was energy minister, but he wasn’t interested.

“I didn’t see the jobs in it,” he said, adding the plan called for paying people to put up turbines “at a price we couldn’t afford and (structures) communities didn’t want.”

Wilson said the idea was popular with people in downtown Toronto who didn’t have to put up with the turbines.

“Now they’re figuring out, ‘Oh, but we do have to pay for them.’ “

7 thoughts on “Tories claim stranded debt payment now tax grab

  1. Geez, Liberals make the Huns look like amateurs. Will this constant money grab never end?

  2. I was given to understand that Maurice Strong when head of Ont Hydro during the NDP
    Bob Rae were in, that he bought all this property in the Rainforest in Brazil so it would not be chopped down. that is how we got this huge debt and how OPG went bankrupt.
    That is the debt we are paying on our Hydro bill. Read the Cloak of Green, and
    see how corrupt our government is as it is controlled by many people and not all the ones we elect.

  3. He said /She said………….comes to mind here……wasn’t it the Harris Gang that originally “saddled” US the Consumers with this so-called DEBT?

    First time in my life I ever had a bill sent to me which covered a debt incurred by complete strangers and then pay through the nose for the rest of my natural days on this planet with never an end in sight!

    Now old Willy Wilson is complaining that the Liberals are crooks?…………….this whole fiasco just keeps getting better and better………………here’s a thought……………….why don’t the PC’s and The Fiberals get together and form one single Bandit Gang called “ScrewOntario Party”, come right out and tell us to our face that we haven’t got a hope in hell of getting a fair shake and call off any further elections so that they can just cruise along with any interruption in the shakedown of our tax dollars…………I would respect them more if they just came right out in the open and said “we are in power to ruin your lives!”……………instead of all this mamby pamby BS!

  4. I think this is mainly nonsense, but …
    In 2003 OPG did take a $576 million write-down on the value of assets due to “Impairment of long-lived assets” … that was mainly devaluing the coal plant for the their 2007 phase-out.
    I wouldn’t be surprised if that half a billion never found it’s way back into paying down debt when, come 2008, the coal plants were still operating.

  5. Scott:

    Unfortunately a “write-down” relates to money you’ve already spent on something. The reason you have to “write it down” is that new information has come to light (ie. closing a coal plant sooner than previously anticipated) that whatever you spent the money on is now worth less the value you are carrying it at on your books. There’s no actual cash involved ’cause it’s already spent.

    Isn’t accounting exciting !!(sarcasm)

  6. Why couldn’t every Hydro One customer deduct the “debt retirement” charges off their monthly payments to Hydro One and then set up a separate personal bank account for this deduction which we could call “Trust Account for Hydro Debt”, and deposit that amount on a monthly basis in that account with the following explanation to Hydro One each and every month explaining that deduction.

    “I have deducted your “debt retirement charge” from my Hydro payment and placed it in a “Trust account” at my local bank with the intention of forwarding this money to you after you have assured me in writing that the total DEBT that Hydro One has incurred in my name will be “paid down” with every single cent of this Trust Account total when it is transferred to your Accounts Receivable Department. Until that occurs I will be depositing this amount on a monthly basis in this Trust Account until you have shown responsibility with it’s end use which of course, at present, is not being done”.

    Would this be legal?……..I doubt it!, but wouldn’t it be worth a try?

  7. Fairly obvious isn”t it?
    Criminal investigations should be instigated against Ontario hydro,and Dalton Mcginty..and charges laid.
    If this were in the private sector..it is bigger than any ponzi scheme!!

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