May 26, 2014 - Vol. 3 No. 32

June 12 Election and Nation-Building

Electricity Pricing in Ontario

Don Walker, the CEO of Magna International says the price of Ontario's industrial electricity must come down if the province expects his company to invest here. In a press conference at the beginning of the Ontario election, Walker cited the price of electricity as a factor stopping his monopoly from building new production facilities in the province. Magna plans to open 23 new plants around the world, including eight in North America but none in Canada.

Magna began in Ontario as an auto parts supplier to the U.S.-controlled auto industry. Using the accumulated wealth and collateral produced by Ontario workers, Magna expanded globally to 29 countries where 198,000 workers annually produce realized value worth $35 billion. Ontario workers now produce less than ten per cent of Magna's total value. The main buyers of Magna production include General Motors, BMW, Chrysler, Ford and Volkswagen.

Walker told the press conference, "I'm worried about electricity prices in Ontario" and that he hopes "whoever wins the Ontario election on June 12 takes action to reduce energy costs for the corporate sector."

The Ontario polity should reject and denounce this kind of talk from those in positions of economic authority and demand they discuss these important issues respectfully and without threats. Walker and other CEOs constantly exert pressure on political parties and the polity generally to accept a neo-liberal austerity agenda of imperialist globalization that does not favour the people and their desire for nation-building.

As an influential person within the financial oligarchy, why does Walker not present a detailed analysis of the economic situation? Why does he resort to vague talk? Threats of disinvestment if industrial electricity prices are not lowered are designed to disinform and overwhelm people rather than involve them in a meaningful way whereby they can think about and discuss what best serves the Ontario economy and what a pro-social agenda might be. Does Ontario need a renewed public Ontario Hydro along with a public authority which set electricity prices? Yes, it does. A renewed Ontario Hydro and public authority could then come to an agreement with global monopolies such as Magna. But this is not what Walker is talking about. He does not want an arrangement based on mutual benefit but a one-sided slavish arrangement which is to his advantage no matter the consequences for the economy and people.

The price of production and distribution of Ontario electricity in its various forms has long been known down to the penny. Magna was founded in 1957. In its formative years after WWII, Magna benefited from an industrial price of electricity that was deliberately set lower than its price of production. The public enterprise Ontario Hydro invested in the province to produce and distribute electricity with industrial, other business and residential electricity prices set by a public authority.

The prevailing general approach through the early and middle parts of the twentieth century was that public investment into production of electricity with industrial market prices set by a public authority lower than the price of production was in the public interest and served the public good. It was said that this approach developed and expanded the industrial base in Ontario and raised the standard of living. The ruling elite considered this practice served its interests which it considered synonymous with those of the country. The Ontario Harris PC government rejected this approach in favour of making the monopolies in Ontario competitive on the global market. It dismantled and partially privatized Ontario Hydro in 1998, breaking it into five parts, with its accumulated capital debt of $19.5-billion assumed by the government.

The arrangements enforced by a public authority have now been destroyed by capitulating and facilitating the dictate and threats of the monopolies which declare that their interests are synonymous with those of the economy and the people and of governments which go along with this self-serving argument. In the case of the statement by Magna CEO Don Walker, no media questioned him to clarify what precisely he is proposing. Does he want to return Ontario Hydro back into a public enterprise with a public authority setting a market price for electricity that favours his and other industrial producers? Why does he not provide precise data detailing what the price of production of electricity is and what he expects the market price to be? He could then present what his company would do in return for such a practice, and the people could decide if such a deal is in the public interest benefiting both his company and the Ontario economy and serving the public good.

Instead of constant threats and extortion coming from Magna, Chrysler and other monopolies, the people want an open, public and serious discussion on the direction of the economy and its renewal. At this difficult juncture in Ontario's history, a new direction would entail arrangements between a public authority and monopolies based on mutual benefit, not one-sided forced secret arrangements, which essentially result not in nation-building in the public interest and public good but in corruption, nation-wrecking, imperialist globalization and downward pressure on the standard of living, social fabric and way of life.

In this election, the people of Ontario are favoured by rejecting all these threats and the bogus concern for the economy expressed by the likes of Magna CEO Don Walker. The interests of the working people will be served when they make a clear statement against the Liberals and PCs who champion an austerity agenda under the hoax that it will make the Ontario economy competitive and that their handouts to monopolies like Magna create jobs. The aim of the pay-the-rich schemes is not to create jobs. It is to make the rich richer. That is economics 101.