Partial Toronto Hydro sale goes to 1st vote

Toronto council's executive committee is set to vote on a proposal to sell hundreds of millions of dollars in municipal assets to ease the city's debt load.

The committee on Tuesday will consider a staff report that suggests the city sell a 10 per cent stake in Toronto Hydro and all of its 43 per cent stake in the Enwave Corporation, which draws water from Lake Ontario to cool a number of large downtown buildings in the summer.

In total, the sale would generate some $600 million to pay down the city's debt, staff estimate. That money could be applied to capital spending, which would reduce the need to borrow new cash.

That in turn would save the city $65 million annually in interest payments for the next 10 years, although thet benefit would be offset by an expected annual loss of $10 million, staff projects.

Council explored the idea in the summer of 2010, but councillors were wary to trade off guaranteed annual income for the city in exchange for a one-time cash infusion.

Toronto Mayor Rob Ford, then a councillor, was one of those who voted in favour of a motion that stated "it is not in the public interest to sell all or any part" of Toronto Hydro.

But he now favours the partial sale of the utility, and of Enwave.

Coun. Adam Vaughan is skeptical of the proposal.

"I don't take anything at face value when it comes to this mayor. So when he says selling is a good thing to do, he's got to prove it," he said.

Deputy Mayor Doug Holyday, who sits on the executive committee, says it's worth examining the issue.

"We wouldn't be party to a fire sale," he said. 

"But if a business case can be made that benefits the taxpayers over a long period of time then it's something we should be looking at."

If approved by the executive committee, the proposal would need council's assent. If it does pass council, the partial sale of Toronto Hydro and of the city's stake in Enwave could begin next year.