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Toronto: A plan to invest $250 million in Toronto Hydro and in turn boost the annual dividend that the corporation pays to the city has been passed by city council.
City council voted 30-1 in favour of the motion on Wednesday morning with Giorgio Mammoliti casting the lone vote against.
The investment was proposed in the wake of Toronto Hydro’s chairman informing the city that future dividends will be reduced from $63.5 million in 2016 to $25 million in 2017 and thereafter due to the corporation’s high debt-to-equity ratio of 65 per cent.
A report by Delotte said that by investing $250 million in Toronto Hydro now, the city would reduce Toronto Hydro’s debt-to-equity ratio to a healthier 50 per cent and see its annual dividend increase by $35 million immediately.
The report recommended that the city make the investment rather than selling a portion of Toronto Hydro due, in part, to the “significant transaction costs” and “significant transaction taxes” that would accompany such a move.
“The good news is that we will not be selling Toronto Hydro today,” Coun. Joe Cressy told CP24 ahead of the vote. “A decision has been made and the mayor supports it to not pursue the sale or partial sale of Toronto Hydro and we will confirm that today. That is good news.”
In addition to advocating for a dividend-boosting investment in Toronto Hydro, the motion rubber-stamped by council also called for the President of the TPA to work with staff on “potential measures” that could be taken to increase revenue, including increasing parking rates to they are more closely aligned with market prices.
96 items on agenda
More than 90 items remain on city council’s agenda for today.
The relatively busy meeting is due, in part, to the 12 hours council spent debating a motion to Mayor Tory’s motion to pursue the legislative changes necessary to introduce road tolls on the Gardiner Expressway and the DVP as well as hotel tax on Tuesday.
The motion was eventually passed 32-9; however on Wednesday Mammoliti told CP24 that the debate over road tolls is not over.
Mammoliti’s comments on Wednesday came after he called for Tory to resign on Tuesday, something the mayor rejected as “preposterous.”
“The issue is not over; it is actually just beginning. In fact it is brewing to a level I haven’t seen before in quite some time,” Mammoliti said. “I think you are going to find that this is going to come back to haunt mayor Tory and his administration in the next election and we are probably going to have to reverse it even before it is built.”
