Canada's largest union is appealing a ruling after a judge tossed its lawsuit seeking compensation for the partial privatization of Hydro One.
The Ontario Superior Court decision from mid-August stated that "the door to allowing challenges to government policy decisions ... would be thrown wide open" if the misfeasance suit from the Canadian Union of Public Employees (CUPE) were allowed to proceed.
"This case is about more than the sale of Hydro One. It's about the government's responsibility to act in the best interest of its citizens," said CUPE Ontario president Fred Hahn at a press conference at Queen's Park on Thursday. "This case is about protecting our democracy from elected officials who are tempted to use their power to benefit themselves and their friends at the expense of the people's good."
"Claims like this one are challenged by the Crown as a matter of course — this was no exception," said Steven Shrybman, a lawyer for CUPE Ontario, which claims 260,000 members. "In their attempt to have the suit dismissed the defendants threw everything but the kitchen sink at the claim, and most of their objections were dismissed by the Court, including their challenge to the adequacy of the pleading of misfeasance."
In his August ruling, Justice Peter Cavanagh said CUPE's complaints were "policy objections to policy decisions," and have no place in a civil court unless the decisions were made in "bad faith."
The union's core argument revolved around ministers supposedly motivated by "improper or ulterior purposes." Hydro One investors donated to the Liberal party while standing to benefit from the government's selloff of shares, effectively fattening the party purse in exchange for boosting shareholder stocks, the plaintiffs argued.
"Political fundraising is a known and legitimate part of the political process," Cavanagh wrote, saying that raising money from investors and law firms involved in privatizing the public utility does not in itself amount to acting in bad faith.
"There is nothing unusual about the fact that a number of professional advisors were used on the Hydro One transactions and that these advisors were paid substantial amounts for their services," he said.
Citing several precedents, Cavanagh added that a "core policy decision" – even if it is based on "political expediency" or "adverse to the interests of certain citizens" – does not necessarily imply bad faith.
The lawsuit names Premier Kathleen Wynne, Finance Minister Charles Sousa and then-energy minister Bob Chiarelli.
"We did this in the best interests of the people of Ontario to raise money to put toward infrastructure, and that money is going toward infrastructure," Energy Minister Glenn Thibeault said Thursday. "In northern Ontario, in my neck of the woods, that money has been helping with a lot of the infrastructure already.
"An original ruling was that there was no merit. We're still in the belief of that, and our lawyers will once again do what they need to do," he added.
CUPE saw things differently, playing on deep-seated notions of utilities as near-sacred public trusts.
"The premier and her government took something that we collectively owned, that our parents and grandparents paid for with their taxes – something that we all rely on — and they put it in the hands of profiteers who will continue to jack up rates and make life harder for the rest of us," Hahn said.
Hahn alleged the privatization led to political donations to the Liberal Party of Ontario, and saddled rate payers with charges totalling more than $1 billion.
"This is misfeasance in public office, and it cannot be allowed to go ahead unchallenged," he said.
Sousa and Chiarelli attended a party fundraiser shortly after the Crown corporation's initial public offering in November 2015, CUPE said in its submission. Also attending were "representatives of many of the firms that had profited from the IPO, each of whom paid $7,500 to attend," grossing $165,000 for the Grits that night, according to court filings.
As of Jan. 1, 2017, Ontario politicians and top staff were banned from attending fundraisers under legislation to reform campaign finance in the wake of last year's Liberal cash-for-access scandal.
CUPE was seeking $1.1 million in damages for the premier's decision to sell up to 60 per cent of the province’s shares in Hydro One.
An appeal hearing is expected in the spring, CUPE said.
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CUPE appeals ruling on its lawsuit over Hydro One privatization

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