The Liberal party’s new anti-privatization legislation is a dud.
The Yukon Energy Corporation Protection Act, which the Liberals released last Thursday, is being sharply criticized by the same members the Liberals need to pass the bill.
The bill is meant to protect the Yukon Energy Corporation from privatization, but it would do little good, say its critics.
“This bill has gaps you could drive a Mack truck through,” said Brad Cathers, an independent member who resigned from Premier Dennis Fentie’s cabinet alleging Fentie “lied” about secret privatization talks.
The two-page private members bill is vulnerable to legal challenges because it’s written in amateurish lingo that doesn’t resemble regular legislation, said Cathers, who resigned on August 28.
“It reads more like party policy paper than a draft bill,” said Cathers.
The bill, which will be sponsored by Liberal energy critic Gary McRobb when the legislature reconvenes, would make it illegal for the government or its Crown corporations to sell Yukon Energy assets without an “election mandate.”
The bill specifies a mandate means a “published platform commitment made during a general election campaign.”
But that’s murky legal ground.
A party could promise to seek the most “affordable, reliable energy for the Yukon” in a platform and not mention the word privatization up front.
“The issue of what’s a people’s mandate is very open to debate,” said Cathers.
But it’s not only the language that has Cathers disappointed.
The bill specifically allows for a rationalization agreement, an asset swap of equal value between Yukon Energy and the ATCO-owned Yukon Electrical Company Limited.
Rationalization is intended to straighten the complicated relationship between the two utilities so that the publicly owned Yukon Energy performs all generation and transmission in the Yukon, while Yukon Electrical sticks with distribution.
But because the bill is unclear about what “equal value” means, it could still permit a sellout to a big energy company, like ATCO.
“The assets could have similar book value, but have very different replacement costs,” said Cathers.
Yukon Energy owns many older pieces of equipment, like the Whitehorse and Aishihik dam, that are operationally in decent shape because of extensive repairs.
Because of their age, the dams could look dirt cheap on the books, but would be worth millions more, resulting in a major loss for the Yukon if a sale were to go through.
“Not only would the bill not prohibit this, it would directly allow it,” said Cathers.
The same goes for Yukon Energy’s transmission equipment, which have a low “book value” but would, in reality, be worth much more, he said.
The Liberal bill lacks detail. It doesn’t explain how an “exchange of assets of comparable value” would be measured in a rationalization agreement.
Other sneakier forms of privatization could sail right through this bill, said a New Democratic Party news release.
“This bill, which is barely two pages long, fails to address the back-door privatization of our energy assets by independent power producers,” said NDP MLA Todd Hardy in a statement.
The government is currently working on a independent power producer policy that could possibly allow for an energy multinational to buy up small private power plants in the future, said Hardy.
“This bill is very weak, even wishy-washy,” he said.
The Liberals openly admit that they had to write the bill from scratch.
“We couldn’t find anything like it in Canada,” said McRobb. “You could say it’s a made-in-Yukon solution.”
The bill also requires clearance from the Yukon Utilities’ Board should the government seek privatization of Yukon Energy assets, said McRobb.
But without the support of Cathers, the New Democrats and independent John Edzerza, it won’t pass.
There is no official response from the government benches yet, said cabinet spokesperson Roxanne Vallevand.
“The government will respond when the legislature resumes,” she said.
Calls to Edzerza’s office were not returned.
The Liberals are allowing a month-long consultation to pass before formally introducing the bill during the fall legislative sitting, which hasn’t yet been given an opening date.
The New Democrats are pledging to offer “substantial amendments” to the proposal.
But Cathers thinks the Liberals should shelve it and start over.
“I would encourage them to go back to the drawing board,” said Cathers.
“It might be good politics, but it’s not good policy,” he said.
Contact James Munson at
jamesm@yukon-news.com