Maybe Nova Scotians could learn a lesson from the public outcry in New Brunswick over plans for the sale of NB Power to Hydro Quebec. The uproar began last fall when John Ritter lookalike Shawn Graham announced the sale of NB Power’s transmission and distribution system, as well as its power plants, for $4.8 billion. By January, public opposition forced the NB premier to backtrack: NB Power would hold onto its transmission and distribution system and sell the generating plants for $3.2 billion. That didn’t mollify angry New Brunswickers, who continued to protest. In Fredericton, 1,000 people gathered outside the NB legislature to call on the politicians not to sell “our power corporation.” A few days later, the sale collapsed after Quebec said the power plants weren’t worth what New Brunswick was asking.
The NB protests were reminiscent of the outcry in Newfoundland in 1994 when Matlock lookalike Clyde Wells announced plans to privatize that power utility. Jeering protesters called the Newfoundland premier a “dictator and liar” and showed up outside the legislature to unfurl the old flag and sing “Ode to Newfoundland.” After a few more months of protest, Wells backed down.
Compare that with what happened in 1992 when Oscar the Grouch lookalike Donald Cameron sold off Nova Scotia Power. The late Daily News columnist Harry Flemming expressed surprise at how little opposition there was. Both daily papers ran editorials applauding the sale and Flemming noted that local business suits “were predictably orgasmic in their delight.” Can you blame them? Legal beagles at a Tory law firm and hacks at a Tory PR company scored big bucks for greasing the wheels on the biggest share sale up to that point in Canadian history. The brokers who peddled the shares also made out like bandits, pocketing $44 million in commissions and fees.
The opposition parties prophesied that Nova Scotia Power Inc. would cut jobs to maximize profits for shareholders already guaranteed outrageously high rates of return. Sure enough the Canadian Press news agency reported that the company had shed about 500 jobs by 1997. The International Brotherhood of Electrical Workers complained that 172 repair crew jobs had been cut by November 2004, when 30 centimetres of heavy, wet snow toppled 12 transmission towers rendering 180,000 customers powerless, some for up to four days. It was the third major power failure in just over a year and Nova Scotians were livid, especially after NSPI told customers to stop calling its jammed help lines. I wrote then that the company seemed to have adopted new PR slogans: “When the wind blows, your power goes. When the snow falls, we won’t take your calls.” Noting that NSPI was seeking a 14 percent residential rate hike, I suggested a new ad slogan: “We’re not being funny, just give us your money.”
Of course, the issue of steadily rising rates to maintain company profits is no laughing matter for electricity consumers. In 2005, the NDP’s Howard Epstein pointed out that NSPI profits had by then amounted to $1 billion since privatization. Epstein was questioning top brass at the company during a legislative committee meeting. He said that the money paid out in profits could have been used to improve services or upgrade equipment, but he acknowledged it was probably too late to regain public control of the utility.
But is it? Would it be possible, for example, to set up a provincially owned power corporation that would issue bonds in exchange for the shares now held by private investors? It’s called a debt/equity swap and could be one way of regaining public control of our power utility without adding directly to the provincial government’s debt. To me, it makes no sense for us to continue forking over fat, guaranteed returns to investors in a company that has a near-total monopoly over the sale of electricity we could be selling to ourselves. As the old saying goes, power to the people!
This article appears in Apr 1-7, 2010.
The New Brunswick taxpayers continue to have serious financial problems to deal with at NB Power. Quebec premier Jean Charest seems quite happy not having to buy the mess.
The real story is ‘What did Hydro Quebec find when it closely examined NB Power ?’
I guess you just like the way previous governments ran NS Power and Sydney Steel.
of course the NB and Quebec governments – terrified at the precedent that might be set by this display of democracy in action – have comically denied that public pressure had anything to do with their decision. a suppine media has played along, and there are obviously some others who have swallowed the propaganda. so to answer your question joeblow, what Hydro Quebec found when it closely examined NB Power, was a public unwilling to sell it to them and willing to stand up to an undemocratic premier, a lesson Nova Scotians would do well to take to heart, as Bruce suggests.
moschi – they found a bottomles pit of future expenditures and left town when they told Premier Graham about the problems. It was a get out for both of them but NB merely postponed the day of reckoning.
i thought higher electricity prices were the way to pay for renewables but I guess you don’t agree. the price of electricity needs to triple in NS if we are to have green power.
Windmills, solar panels, tidal don’t come cheap. Just ask the Europeans, in Germany the feed in tariff paid to green producers is about 25c per Kwh.
Nova Scotia consumers pay less than 12c per Kwh for power from coal/oil.
How much cheaper do you want it to be ?
Wark’s advocacy of a debt-equity swap is laughable and shows how little he understands reality. Nova Scotia is rapidly running out of debt capacity and our ability to borrow money as a province will be wiped out by the time the NDP has finished running deficits. The market capitalization of NSP is well beyond the ability of the province to obtain. And then, of course, the efficiency of NSP would go down the drain as it became a govt operation and bulked up on staff and bureaucracy like the bad old days.
@Joeblow: The cost of renewable energy and the privatization of public utilities are separate issues. The public is beginning to understand that they will not be better off ceding control of their utilities. Harry Flemming should not have been surprised at how little public opposition there was to the sale of NS Power given how little public consultation and debate there was leading up to it. When you don’t have IMF extortion to force privatization on an unwilling public as in the third world, and when the sorry history of these sell-offs deprive you of any convincing arguments in favour of it, you need to do it behind people’s backs as in Nova Scotia, or in open defiance of the public will as was attempted in New Brunswick.
@Bogus, the idea that privatization improves efficiency is standard neoliberal propaganda. What privatization of public utilities usually results in are increased costs, decreased service, and huge profits taken out of the system that – under public control – could have been reinvested in it.