The appointment of Michael Sabia as head of Hydro-Québec has every reason to worry Quebecers.
Sabia’s great specialty is forcing slimming diets on the companies he runs. He did that when he ran Canadian National. He did the same when he was President of Bell Canada.
However, rightly or wrongly, Hydro-Québec has a reputation for being a big machine that certain executives and union members are taking it easy on. One of Sabia’s first tasks will undoubtedly be downsizing. Cuts, better known by the more pleasant term “rationalizations”.
There is no doubt that Sabia’s rationalizations will potentially increase Hydro-Québec’s profits by hundreds of millions of dollars per year. Especially since he wants to get Quebecers to pay more for their own electricity.
Price to be paid
However, these cuts come at a price. It is disturbing to note that customer service at Bell Canada has become abysmal following the death of Sabia. Like many Bell customers, I have personally had the painful experience of changing suppliers.
What will Sabia cut, omit or sell at Hydro?
His responsible minister, Pierre Fitzgibbon, gave him the answer: the private is always better than the public, but the dams must remain public.
For Fitzgibbon, what is worthwhile must be private. The dams that need to be rehabilitated will be expensive, and the taxpayer will pay for them. The same applies to transmission lines, which need to be protected from climate change. The rest can be worthwhile, so return to the private sector or let them develop you.
Private sometimes harmful
However, prior to Hydro-Québec, the private sector had performed extremely poorly on our electric power. The fact is that the private sector is very bad for the economy in certain areas.
An example of this harmfulness of the private sector is the Canadian National. After rationalization by Sabia, the company was privatized (rationalization is often the prelude to privatization).
With privatization, the Canadian National no longer had the resources to truly modernize its network. His priority has become to satisfy his shareholders and no longer his customers. Had the company remained public, Canada’s railway infrastructure would likely have been more modern and developed. The economy would be better off.
Is Sabia’s appointment an attempt to quietly privatize Hydro-Québec? There is reason to believe.
Even greater development of the lucrative power generation activities by the private sector would be the beginning of the end for our fabulous public company. This would be disastrous for Quebec’s economy in the long run.
The restructuring of Hydro-Québec that the government is promising for this fall is worrying. Sabia recommends staying open for now. Open like in an open bar?
