View From the Legislature

NDP Repeating History with Manitoba Hydro

  • Kelvin Goertzen, Author
  • Member of the Legislative Assembly, Steinbach

That didn’t take long. It has only been a few months since the NDP formed government in Manitoba and already they seem to be interfering in the operations of Manitoba Hydro, the province’s largest and most important crown corporation.

Immediately after taking government, the NDP replaced almost the entire board of directors at Hydro. While this type of mass turnover isn’t generally beneficial to a corporation, it regrettably has become something of a Manitoba tradition when governments change. What is more unusual is for a new government to quickly begin to publicly undermine confidence in the Chief Executive Officer of Hydro as the NDP government did last week.

Speaking at a Manitoba Chamber of Commerce event, Manitoba Hydro President and CEO Jay Grewal told those in attendance that Manitoba was likely to need new sources of electricity by the end of the decade. This really wasn’t news to anyone who has been following Manitoba Hydro projections and the push nationally and globally for increased use of things such as electric vehicles. The Hydro CEO also stated that to meet these needs, the preference wasn’t to build another hydro electric generating station which costs billions of dollars and would add to the already stifling debt that Manitoba Hydro has, and which is causing regular increases to hydro rates. Instead, she suggested that Manitoba Hydro look to enter into agreements with independent producers of wind power to meet the increased demand for power in the province.

The reality is that Manitoba Hydro, for all of its incredible promise and value, also has many challenges. The key challenge is the debt that it carries and the annual interest cost that it pays on that debt. In fact, many Manitobans don’t realize that the debt of Manitoba Hydro is essentially equal to the debt of the provincial government itself. And that debt impacts the provincial credit rating and ultimately the interest taxpayers have to pay on the combined debt of the province and Hydro.

The last time the NDP were in government in Manitoba they overruled the strategic plans of Manitoba Hydro and forced them to build a new Bipole transmission line (known as BiPole III) down one of the longest routes imaginable instead of taking a more direct route from the north as Hydro had planned. That, together with cost overruns at the Keeyask generating station, sent these projects $3.7 billion overbudget which landed straight onto the debt of Manitoba Hydro, nearly tripling it. This has resulted in annual hydro rate increases as it is Manitobans who have to pay for that debt.

So, it may have brought back bad memories when after the CEO of Hydro spoke last week, the new NDP Minister of Hydro went to the media and indicated that the government didn’t agree with the plan of Manitoba Hydro and believes that Manitobans should be back in the business of funding huge hydro projects. He also refused to signal the NDP has confidence in the CEO of Manitoba Hydro.

In only three short months the NDP have overturned the Board of Manitoba Hydro, undermined the CEO, and signaled to Manitoba it may again be looking to add billions of dollars of debt onto the backs of the Crown Corporation to be paid for by Manitobans. It seems that when it comes to the NDP and Manitoba Hydro, history truly does repeat itself.