An Assessment of the Financial Impact of the Partial Sale of Hydro One

The Province of Ontario plans to sell part of its wholly owned electricity transmission and distribution company, Hydro One. It plans to sell 15 per cent of the company in 2015–16 and an additional 45 per cent in subsequent years.

The FAO estimates the market value of Hydro One to be $11–$14.3 billion. The initial 15 per cent sale of Hydro One would significantly reduce the Province’s deficit in 2015–16.

 In subsequent years in which the Province sells shares in Hydro One, the impact on the budget balance (i.e. surplus/deficit) would depend on market conditions and policy decisions of the Province around the repayment of electricity sector debt, and would range from negative to positive.

In years following the sale of 60 per cent of Hydro One, the Province’s budget balance would be worse than it would have been without the sale. The Province’s net debt would initially be reduced, but will eventually be higher than it would have been without the sale.

The total amount credited to the Trillium Trust to finance infrastructure as a result of the sale is estimated at $3.3–$5.8 billion.

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Media inquiries - Kismet Baun, Communications Coordinator
416-254-9232
kbaun@fao-on.org

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