I went down to Queen’s Park on March 8 to listen to the Speech from the Throne.
Before the Speech, there had been a couple of news stories leaked about what Dalton McGuinty’s Liberals might have in store for us. I wanted more details. I didn’t get them from the Speech, but here’s what we know so far:
- The Premier’s job-creation strategy is to invest more in education. That’s good, as far as it goes.
- The problem is, the global recession has left us with a $24.7 billion budget deficit.
- So to finance his plans, McGuinty is looking at selling off slices of Ontario’s Crown jewels: the LCBO, OLG (formerly the Ontario Lottery and Gaming Corporation), Hydro One, Ontario Power Generation, and possibly others.
Selling off these assets is financially stupid. Together, these four companies bring in $4.3 billion in profits, all of which go straight into provincial coffers. In the long term, selling even a fraction of these jewels will cost us hundreds of millions a year – forever.
While selling off assets is financially stupid, it may just be politically smart. Selling off assets will give the Liberals a one-time cash injection, just in time for the October 2011 election.
Of course, the Premier hasn’t sold anything yet. But if he takes the advice he’s paying for, he will damn sure try to.
Late last year, McGuinty hired CIBC World Markets and Goldman Sachs, a New York investment bank, to “review” Ontario’s assets and make recommendations about how to squeeze more money out of them.
Ontarians need to know more about Goldman Sachs. Last year, one journalist described the company this way:
- The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
Goldman Sachs is staffed by very clever people. Governments hire them to give advice on clever ways to privatize. Then, when the privatization happens, Goldman Sachs buys a piece of the action. They make money on their advice and on their investment.
Normally we would call this a conflict of interest.
There is zero chance that Goldman Sachs will not tell the Premier to privatize our Crown jewels. They will come up with a scheme that is very clever.
This scheme will appeal to many people who want a piece of the action for themselves. It will appeal to others who think the sky is falling because we have a deficit. And the Liberals will be betting that it will get them re-elected.
Whatever the scheme, it will still be bad for Ontario.
It’s the Premier’s job to look after the interests of the province, not just his own party. But if he won’t do it, citizens will have to. In the months ahead, we’ll have a fight on our hands.
Let’s start by prying the vampire squid off our face.
Warren (Smokey) Thomas, President
Ontario Public Service Employees Union