Former John Tory Campaign Advisers Are Working on Hydro Privatization, and Some Councillors Have Questions
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Former John Tory Campaign Advisers Are Working on Hydro Privatization, and Some Councillors Have Questions

The mayor's evolving stance on selling off Toronto Hydro seems like a game of Twister Tory.

Photo from the 2014 campaign, when Nick Kouvalis, centre, played "Twister Chow" to mock the candidate's allegedly evolving stance on the Downtown Relief Line.

Photo from the 2014 campaign, when Nick Kouvalis, centre, played “Twister Chow” to mock the candidate’s allegedly evolving stance on the Downtown Relief Line. Current mayoral spokesperson Amanda Galbraith at left, and Erika Mozes at right.

Two of John Tory’s top-ranking 2014 campaign officials are providing advisory services to Toronto Hydro as the public agency looks at a partial selloff.

The Star reports that Bob Richardson and Nick Kouvalis were contracted by Toronto Hydro. But councillors Gord Perks (Ward 14, Parkdale-High Park) and Janet Davis (Ward 31, Beaches-East York) have questions as to how this happened, and have submitted an administrative inquiry to the City Manager to get answers.

Administrative inquiries are a way for councillors to formally ask the City Manager’s answers to questions. However, they might not receive answers related to Toronto Hydro, because it’s an arms-length agency that is not under City Manager Peter Wallace’s purview.

That said, the questions that Perks and Davis ask are worthwhile.

These particular questions focus on figuring out how Richardson and Kouvalis were hired, under whose direction and authority, and whether the Toronto Hydro process meets the transparency needed. But there’s also a larger context that deserves the same questions: why and when Tory’s Toronto Hydro campaign promise was abandoned, what that says about how we’ll fund transit and other infrastructure, and how decisions are made at City Hall.

    • In early 2014, as the campaign was getting underway, John Tory criticized fellow candidate Karen Stintz’s proposal to sell off part of Toronto Hydro to pay for transit. He referred to her plan as a “fire sale” to the Star, and in a May 2014 CityTV mayoral debate said, “I would not sell Toronto Hydro.”

Start the video at 16:15 to see the related Toronto Hydro exchange

    • In June 2014, Tory comes out with his big $8-billion transit proposal, SmartTrack. He says it can be financed without increasing property taxes, through an unprecedented use of tax increment financing. The scheme is questionable, and despite being challenged on it by journalists and fellow candidates, Tory and his campaign sticks to their plan.
    • In January 2016, the Star and Globe report that the mayor’s office has had backroom discussions regarding a potential Toronto Hydro sale, and took a keen interest in appointments to the Hydro Board. In an email to the Globe, mayoral spokesperson Amanda Galbraith wrote, “There is no proposal to sell any city asset currently before the mayor, nor is there active discussion in that regard. Any suggestion otherwise is false.”
    • In June 2016, a council vote provides a sign of things to come. Kristyn Wong-Tam (Ward 27, Toronto Centre-Rosedale) introduces an amendment to the mayor’s key item, The City of Toronto’s Long-term Financial Direction. Her motion to exclude selling Toronto Hydro from consideration fails, 19–24, with the mayor’s allies backing John Tory. The vote comes in the context of how to pay for transit and other infrastructure needs. There will be an important report on potential funding sources and revenue tools later in 2016, but some of those options would be a hard sell on a tax-phobic council, and SmartTrack looks highly unlikely to be solely funded by tax increment financing.

Screen Shot 2016-10-28 at 12.15.30 PM

    • In a major speech at the Toronto Region Board of Trade in September 2016, Tory lays the groundwork for a sale of Toronto Hydro. He indicates that he would not want to sell more than half of the public agency, and argues that it’s necessary to pay for infrastructure upgrades.

      But we also have to pay for it and we have an obligation to look at all the options including unlocking the value that already exists in Toronto Hydro, while keeping it in public hands. Again, a refusal to look at all these options and what they could mean for the people of Toronto would not represent the honest, responsible course.

      However, selling Toronto Hydro equity would mean giving up significant dividend income. Giving up half of the $56-million dividend from 2015 would be equal to a 1 per cent property tax increase.

    • The provincial Liberals say they won’t get in the way of Toronto selling off part of Toronto Hydro. However, there is no indication they will waive the tax penalty for doing so, which would be $220 million on a potential $1-billion sale.
    • The Star reports that Richardson and Kouvalis, two of the top advisors for John Tory’s 2014 campaign, have been hired as consultants by Toronto Hydro. Mayoral spokesperson Galbraith calls them “two of the best and brightest in their respective fields,” and adds that their previous work with the mayor should not preclude them from working.

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