Unlocking the Value of Provincial Assets
Ontario is moving ahead with its plan to unlock the value of certain public assets to help support investments in transit, transportation and other priority infrastructure projects through Moving Ontario Forward. This is part of the province's plan to invest more than $130 billion over 10 years in public infrastructure, which represents the largest infrastructure investment in Ontario's history.
The government is introducing the sale of beer in grocery stores, and will broaden ownership of Hydro One to improve its long-term performance.
Modernizing Alcohol Sales and the Electricity Sector
Allowing grocery stores to sell beer will increase convenience and choice for Ontario consumers in a socially responsible manner. These are the most significant changes to beer retailing since the repeal of the Ontario Temperance Act in 1927.
The ownership of Hydro One will be broadened to improve its long-term performance. The benefits generated from introducing new capital and allowing Hydro One to be more innovative and efficient in its operations would benefit ratepayers, the province and Hydro One's new broad base of shareholders. This would enhance the performance of the company as it continues to provide high-quality transmission and distribution services in the province to support Ontario's people and businesses.
Since the plan to optimize assets was laid out in the 2014 Budget, the province has sold its remaining General Motors shares and is now in the process of selling the Liquor Control Board of Ontario's (LCBO) head office lands, which is expected to close in 2015-16.
The sale of the province's remaining 36.7 million GM common shares was completed on February 4, 2015, for total proceeds of $1.55 billion, resulting in a fiscal gain of $1.08 billion for the province. Also, GM redeemed the province's preferred shares on December 31, 2014, for $156 million, including a gain of $22 million.
The overall $1.1 billion gain on the sale of the common and preferred shares was better than the $900 million asset optimization target for the 2014-15 fiscal year outlined in the 2014 Budget.
The province is also looking at its other real estate assets, including Ontario Power Generation's (OPG) head office building, as well as Seaton and Lakeview lands.
Supporting Investments in Transit and Major Infrastructure Projects
The Trillium Trust provides dedicated funds for priority infrastructure projects across the province that will build Ontario up. Net proceeds arising from the sale of qualifying provincially owned assets would be placed in the Trillium Trust.
For example, the entire $1.1-billion gain from the recent sale of GM shares, including the $200 million above target revenue, was flowed into the Trillium Trust to invest in Moving Ontario Forward.
Planned investments in transit, transportation and other priority infrastructure through Moving Ontario Forward are expected to support more than 20,000 jobs per year on average, over 10 years, in construction and related industries, boost productivity and revitalize communities.
Premier's Advisory Council on Government Assets
In April 2014, the government appointed the Premier's Advisory Council on Government Assets, chaired by former Group President and Chief Executive Officer of TD Bank Group Ed Clark. The council has been tasked with making recommendations on how to get the most out of key government assets to generate better returns and revenues for Ontarians. The council's work is guided by these principles:
- the public interest remains paramount and protected
- decisions align with maximizing value to Ontarians
- the decision process remains transparent, professional and independently validated.
In November 2014, the council released an initial report on key provincial assets, including the LCBO, Hydro One and Ontario Power Generation, including preliminary recommendations on ways to improve customer service and increase efficiencies at these government business enterprises.
The changes announced today to alcohol sales and electricity reflect the council's recommendations from the second phase of its review outlined in its transmittal letter dated April 16, 2015.