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Urges Toronto to Follow:
CTF Applauds Mississauga Planned Utility Sale
By Kevin Gaudet Friday, April 11, 2008The Canadian Taxpayers Federation responded positively to Mississauga Council’s decision to put its city-owned hydro provider - Enersource Corp. - up for sale and urges the city to protect the revenue for the long-term.
It further urges Toronto to follow Mississauga’s example and sell off its utility. CTF Ontario Director, Kevin Gaudet, said “it is good to see Mississauga making a wise financial decision. Toronto Mayor Miller and Toronto council have a good example to follow here. The sale, however, should ensure that the money generated will be protected from politicians for their pet projects”.
Mississauga should follow the City of Edmonton model which when it sold its utility, invested the revenues in an interest-bearing long-term protected fund. The interest generated would replace Enersource’s current revenue stream in the city’s operating budget. Enersource’s net income for 2007 was $14.0 million down from $17.2 million in 2006.
Mississauga Council is reportedly considering putting revenues generated from the sale into some kind of fund for use on local infrastructure. The 2008 budget passed a 3.9% property tax increase plus a 5% infrastructure tax. Gaudet concluded, “the city should be careful not to let Mr. McGuinty off the hook for infrastructure obligations. It would be more appropriate to seek from Premier McGuinty a Gas Tax Accountability Act like they have in Saskatchewan and Manitoba. It mandates that 100% of provincial gas tax revenues go to roads, bridges and highways. Last year Ontario only applied 48% of the tax revenue.”
