Karen Stintz wants to sell off part of Toronto Hydro to help pay for the Downtown Relief Line
No Toronto mayoral campaign is complete without at least one candidate promising to sell off Toronto Hydro so the proceeds can be used to fund some kind of crowd-pleasing project. Earlier today, at a press conference held at the corner of Carlaw Avenue and Gerrard Street East, Karen Stintz became the first to suggest taking a hammer to Toronto’s electricity piggybank.
Although a few weeks ago Stintz was saying that her preferred option would be to lease Toronto Hydro to a private operator, today she told reporters that, if elected mayor, she’d straight-up sell a large part of the city-owned electricity provider. The resulting payout would be funneled into the Downtown Relief Line, a proposed new subway line that in theory would relieve crowding on the Yonge-University-Spadina line.
Toronto Hydro’s value has been estimated at around $1 billion, but provincial rules make it difficult for the city to sell more than a 10 per cent stake in the company without incurring massive tax penalties. Even so, Global News reports that Stintz is confident the sale would net at least $500 million, assuming Queen’s Park could be brought onside. Of course, there is a catch.
The thing is, $500 million—or even $1 billion—wouldn’t come close to paying for the DRL, which even by the most conservative estimates would cost somewhere between $3 and $8 billion to build. What’s more, selling Toronto Hydro would actually cost the city money in the long term, because electricity is a profitable business. In 2013 alone, Toronto Hydro contributed $43 million to the city’s bottom line. If the city were to sell all or part of its stake in the company, it would have to replace that revenue somehow. And so residents would probably end up paying that same $500 million out of pocket over the years, through property taxes—whether they realized it or not.
Despite the problems with her proposal, Stintz does deserve some credit for being the first mayoral candidate to suggest anything remotely like a payment plan for the DRL. Fellow candidates John Tory, David Soknacki and Rob Ford have all promised to the build the line, but none of them have said how, exactly, they’d do it. Until planning and construction are actually underway, the DRL’s funding source is the only detail that counts.