Ontario Proclaims into Force Legislation on Hydro One Governance
Ontario has proclaimed into force the substantive provisions of the Hydro One Accountability Act, 2018, to bring respect for electricity customers, transparency and accountability to Hydro One.
Details of the legislation
The Hydro One Accountability Act, 2018 introduces a number of important changes to address executive and Board compensation at the utility.
The Act requires Hydro One's Board of Directors to:
- establish a new executive compensation framework for the Board, CEO and other executives in consultation with the province and the other five largest shareholders, within 6 months
- submit the new compensation framework and any future changes to the Management Board of Cabinet for approval
The Act also:
- requires Hydro One to publish on its website any proposed changes to its compensation framework at least 30 days prior to the date on which it is seeking approval from Management Board of Cabinet
- requires Hydro One to publish on its website, each year, a record of the total annual compensation paid in the previous year by Hydro One to or in respect of executives provided for in regulation
- enables the Management Board of Cabinet to issue directives governing compensation of the Board, CEO and other executives at Hydro One
- enables the Minister responsible for the Act to require that Hydro One provides financial and employment information regarding its executives
- provides the Crown with immunity from civil liability.
An amendment to the Ontario Energy Board Act, 1998 has also been proclaimed into force, which will require the Ontario Energy Board to exclude any amount in respect of compensation paid to the Chief Executive Officer and executives from consumer rates for Hydro One.
Taking action to address issues at Hydro One
The government committed to remove the Board and the CEO of Hydro One, and to support a stronger company that respects Ontario's electricity customers.
In July 2018, Ontario negotiated an agreement with Hydro One that led to the retirement of the CEO and an agreement by the Board of Directors to resign in an orderly process.
On August 14, 2018, a highly qualified replacement Board of Directors was appointed to fill the vacancies created by the resignations. The new Board is composed of four directors nominated by the province, including interim Board Chair Tom Woods, and six nominated by a committee representing the interests of the other shareholders.
The replacement Board will be responsible for appointing a new CEO and Board Chair in consultation with the province. The new CEO, once appointed, will become the Board's eleventh member.
The newly-appointed Board will hold office until Hydro One's 2019 Annual General Meeting.
Provincial nominees to Hydro One's Board of Directors
Interim Board Chair
Mr. Woods is a corporate director. He previously had a 37-year career with CIBC and Wood Gundy, the predecessor firm of CIBC World Markets. He started in Investment Banking, advising companies raising financing in the equity and debt capital markets as well as mergers and acquisitions, and later was Head of Canadian Corporate Banking, Chief Financial Officer, Chief Risk Officer and Vice Chairman.
Mr. Woods also serves on the boards of Bank of America Corporation, Alberta Investment Management Corporation, Providence St. Joseph's St. Michael's Health Care (Board Chair) and CIBC Children's Foundation. Previous directorships include TMX Group Inc., DBRS Limited, Jarislowsky Fraser Limited and Covenant House (Board Chair). Mr. Woods has a Bachelor of Applied Science in Industrial Engineering from University of Toronto, and an MBA from Harvard Business School.
Cherie Brant (provincial nominee)
Ms. Brant is a Partner at Dickinson Wright's Toronto law office where she has an Indigenous law practice with a focus on commercial real estate, energy and transmission and First Nations economic development. Ms. Brant provides strategic counsel to several First Nations and industry clients seeking to develop projects with First Nations and to understand and address Indigenous rights and interests. As lead counsel, Ms. Brant was instrumental in forming one of the largest First Nations-led limited partnerships in Canada resulting in the Ontario First Nations Sovereign Wealth LP's share purchase of approximately 2.4% of Hydro One Limited.
Ms. Brant is both Mohawk and Ojibway from the Mohawks of the Bay of Quinte and Wikwemikong Unceded Indian Territory. She also serves on the board of the Anishnawbe Health Foundation and is a member of the Canadian Council for Aboriginal Business, Research Advisory Board and the Aboriginal Energy Working Group of the Independent Electricity System Operator. Previous directorships include Women's College Hospital and Trillium Gift of Life.
Ms. Brant has a Bachelor of Environmental Studies, Urban and Regional Planning Program from the University of Waterloo and a Juris Doctor from the University of Toronto. She is a member of the Ontario Bar Association and the Law Society of Ontario.
Blair Cowper-Smith (provincial nominee)
Mr. Cowper-Smith is the principal and founder of Erin Park Business Solutions a Canadian advisory and consulting firm. Previously, he was Chief Corporate Affairs Officer of Ontario Municipal Employees Retirement System (OMERS) and a member of the Senior Executive Team where his responsibilities included regulatory affairs, law and governance. Prior to joining OMERS he was a Senior Partner at McCarthy Tetrault LLP where his practice focused on mergers and acquisitions, infrastructure, governance and private equity.
Board experience includes numerous advisory assignments, including governance advisory assignments, with boards of directors including OMERS, Stelco, Hammerson, and includes existing or prior director appointments and board committee leadership roles with companies like Porter Airlines, 407 ETR, the Financial Services Regulatory Authority and Face the Future Foundation. He served until recently on the Public Policy Committee of the Canadian Coalition for Good Governance and on the Securities Advisory Committee of the Ontario Securities Commission. He co-founded The Canadian Council for Public and Private Partnerships, which led to a long-term interest in infrastructure policy and delivery of infrastructure based services to Canadians.
Mr. Cowper Smith has a Bachelor of Laws (LLB) and Master of Laws (LLM) from Osgoode Hall Law School at York University. He is a member of the Law Society of Ontario and holds the director designation through the Institute of Corporate Directors and is a regular faculty presenter for the Directors College.
Russel Robertson (provincial nominee)
Mr. Robertson is a corporate director and former Executive Vice President and Head, Anti-Money Laundering, BMO Financial Group. Mr. Robertson has served as Chief Financial Officer, BMO Financial Group and Executive Vice-President, Business Integration where he oversaw the integration of Harris Bank and M&I Bank forming BMO Harris Bank. Before joining BMO, he spent over 35 years as a Chartered Professional Accountant holding various senior positions including the positions of Vice-Chair, Deloitte & Touche LLP (Canada) and Canadian Managing Partner, Arthur Andersen LLP (Canada).
Mr. Robertson also serves on the boards of Bausch Health Companies Inc. and Turquoise Hill Resources. Previous directorships include Virtus Investment Partners, Inc.
Mr. Robertson has a Bachelor of Arts (Honours) in Business Administration from the Ivey School of Business at the University of Western Ontario. He is a Chartered Professional Accountant (FCPA, FCA) and a Fellow of the Institute of Chartered Accountants (Ontario). He is also a member of the Institute of Corporate Directors.
Reducing electricity bills for Ontarians
The government has committed to lowering hydro bills by 12%. Every action the government takes to reduce the cost of electricity will get passed along to electricity customers.
Ontario amended the Ontario Energy Board Act, 1998, to require the Ontario Energy Board to exclude any compensation paid to Hydro One's Chief Executive Officer and other executives from customer rates for Hydro One. This will help reduce rates.
Having a leadership team in place at Hydro One that considers Ontario's electricity customers in all of its planning will lead to a better and more efficient and affordable electricity system over time.
This builds on the action already taken by the government to reduce electricity bills for Ontarians. In July, it was announced that Ontario ratepayers will benefit from $790 million in savings as a result of the cancellation and winding down of 758 renewable energy contracts.