Thursday, September 05, 2002

Class-action suit doesn't fit Hydro privatization debate Court of public opinion should rule on Liberals' plan to split public utility Ian Mulgrew Vancouver Sun Thursday, September 05, 2002 The B.C. Liberal administration and its plans to privatize elements of B.C. Hydro are at the heart of what may become the largest class-action lawsuit in Canadian history. A coalition of labour groups, seniors' associations, the Council of Canadians and a growing number of ordinary Hydro customers -- the usual suspects fronting for the NDP, according to one commentator -- want the B.C. Supreme Court to certify their class-action to block the government from selling Hydro or its constituent parts. Essentially, the opponents of privatization claim Victoria and Hydro are ripping off the taxpayer and customer with a bit of fancy accounting and the court should stop it. If the court agrees they have a claim, it will embrace every B.C. Hydro customer: about 1.5 million home owners, tenants and corporations. Hydro and the government now have a couple weeks to respond with their respective defences. After the statement of claim and writ of summons were filed Wednesday, those involved met with the media and my first thought was: fat chance. Its' not that there isn't a lot of work here for lawyers and pundits. Vancouver lawyer Leo McGrady is acting for two nominal Hydro customers -- John Nichol, a a retired fishermen's union official, and Lyndsay Poaps, 23, a Vancouver youth activist -- and the so-called B.C. Citizens for Public Power, which bills itself as a grass-roots organization fighting the splitting of Hydro. If the case goes to trial, McGrady said, the bill will total hundreds of thousands of dollars. Why on earth should it get that far? I think the privatization of B.C. Hydro is a dumb public policy; the company turned an $850-million operating profit last year and kicked back a $374-million dividend to Victoria. There's no question it's going to cost us all a lot more for power under any privatized entity. However, McGrady says Victoria and Hydro have breached their fiduciary duties and are acting in a way that requires the judiciary to step into political life. "This suit charges that the government is breaking a trust with the people of B.C. -- many of whom have invested in this corporation for more than a generation -- by [dividing] it and privatizing key functions," he said. Marjorie Griffin Cohen, the local economist who is also the representative for the coalition, added that taking the government to court was a last resort and necessary "when elected representatives refuse to listen to the people." I have some empathy for their position. As late as Feb. 28, 2001, then-Opposition Leader Gordon Campbell wrote: "B.C. Liberals will not sell B.C. Hydro. A B.C. Liberal government will not sell or privatize B.C. Hydro's dams, transmission lines, water resources, or other core assets. These are public assets and will remain as such." In spite of such written and verbal promises, the Liberals in power have pushed full-steam ahead with plans to dismember the jewel of Crown corporations. Already, Hydro is contemplating a $115-million deal to spin off "internal services" -- human resources, computer operations, electricity supplies and accounting -- to Accenture, the private management firm based in Bermuda. If such services are moved outside Hydro, a third of its work force -- about 2,000 people -- would be displaced. If the government continues towards privatization, everyone agrees, all customers will face rate hikes from 30 per cent for domestic consumers to as much as 60-plus per cent for some big users. Little wonder mines, pulp mills, smelters and industries across the province are also lobbying the government to abandon the idea. That is where this battle belongs, in Victoria, in the corridors of power and in the legislature. It seems to me this suit is grounded on the idea that by creating Hydro in 1963, Social Credit premier W.A.C. Bennett committed in perpetuity every succeeding provincial government to his power-policy vision. I don't think so. Bennett believed a publicly owned electricity monopoly was essential for the orderly and profitable development of the province. However, times change. There are those who argue -- including Richard Neufeld, the current minister responsible for Hydro -- that deregulation of the electricity market and the privatization of Hydro now are essential to ensure B.C.'s economy continues to grow. I am not convinced but the buck doesn't stop with me. Unless there is evidence of malfeasance or blatant fiscal incompetence, I don't think a judge should be looking over the minister's shoulder and dictating economic policy. The Liberals have every right to change their mind on Hydro privatization and utilize all the tools of governance at their disposal. Remember former Prime Minister Pierre Trudeau's infamous flip-flop on wage-and-price controls? I believe the joy of elected office is you get to do dumb things and suffer for them in the court of public opinion, not the downtown Law Courts. imulgrew@direct.ca