Former NS Power CEO Recalls How The Public Utility Was Privatized in 1992
HALIFAX – To this day, the decision to privatize Nova Scotia Power in the early 1990s is a very controversial one across the province. For many, electricity should not be in the hands of a private entity that has a monopoly on it for profit. For others, it was a decision that robbed the Nova Scotia taxpayer of a giant revenue stream.
In 2020, Emera (NS Power’s holding company) reported $938-million in net income for the year, money that now goes to shareholders, rather than the public treasury.
But back in 1992, things were different in Nova Scotia. Donald Cameron, who became the new Progressive Conservative Premier in 1991 (and who recently passed away in May), was looking to lower the province’s debt and deficit problem. And Nova Scotia Power, as a crown corporation, wasn’t seen as a moneymaker like it is today.
Louis Comeau became CEO of Nova Scotia Power in 1983, back when it was still owned by the province. He said the company was bloated when he arrived because of the 1975 amalgamation of the Nova Scotia Power Corporation and the Nova Scotia Light and Power Company. Like many amalgamations, this just created duplicate jobs and redundancies and power rates in the province went up soon after these companies were combined.
“There was almost two of everything if I could put it simply,” said Comeau.
During his first meeting as CEO, Comeau was told that to make the corporation work, they would have to increase staff from 2,535 employees to 3,300. Comeau said he went the opposite direction and brought it down to a slimmer staff of 2,000.
According to the former CEO, NS Power, as a public utility, was bleeding money, and needed constant government subsidies to keep rates down across the province.
“The government was subsidizing the power rates every year by about 90 million bucks,” he said.
Throughout the ’80s no government was interested in taking the risk of privatizing Nova Scotia Power, but in 1991 Comeau found a willing partner in the new Premier, Donald Cameron.
“Cameron wanted to improve the financial situation in Nova Scotia; that was one of his objectives,” recalled Comeau.
Roger Bacon served as interim Premier of Nova Scotia before Donald Cameron was selected as the new leader. He recalled Cameron’s passion and dedication to politics.
“Donald was a very fine person; he had his priorities. He believed in what he was doing; he was very dedicated to his work, there’s no question about that,” said Bacon.
“He had a strong belief in (reducing spending). Donnie had strong beliefs…and he very openly let people know that that was his position.”
At the time, Nova Scotia was facing growing debt and Cameron was looking to offload liabilities and raise some revenues. Meanwhile, Comeau believed Nova Scotia Power would work better as a private company, rather than a public entity.
“We’re not a school, we’re not a hospital; you should not have to subsidize this thing,” Comeau told Cameron. “We ought to be able to do it on our own, as a company.”
The NS Power CEO informed Cameron that selling NS Power would relieve the province of $3-billion in debt and liabilities.
“He got a little bit excited about it and, after some discussion and a few meetings, it could be done,” said Comeau.
“He wanted to get it done because he was quite concerned about the debt of the province.”
After doing months of research on other similar privatization sales across the country, the decision was made final in 1992. Nova Scotia Power was sold off for $861-million – the biggest privatization in Canada at the time.
While that may look like a big number, many critics say it was short-term gain and long-term pain for Nova Scotia, especially when looking at the profit margins of Emera today.
When asked why Nova Scotia Power couldn’t earn a profit when it belonged to the public, Comeau admitted he had no answer to that mystery.
“That’s a good question,” he replied with a loud laugh. “Because we made it profitable; it took us four years to eliminate that $90-million (deficit).”
Despite the critics and the healthy state of Emera today, Comeau pushes back against the idea that it was a mistake to privatize Nova Scotia Power.
“The reason it was privatized was basically that; to bring the bottom line down…and to also invest [in other things],” said Comeau.
“It’s a difficult question to ask what would have happened.”
One of the more surprising critics of the Nova Scotia Power Sale is Roger Bacon, the former Premier and Progressive Conservative colleague of Cameron. He believes that Nova Scotia Power should still be a public entity.
“I was a firm believer, and many were like myself, that Nova Scotia Power should have stayed as (a public company),” said Bacon.
“Shall we say it was a little difference of opinion between the two of us [me and Cameron].”
Bacon maintains, however, that the difference of opinion didn’t diminish the respect he had for Cameron and every political party has inside disputes.
“When you’re in politics, you stand up for what you think is right for your community, because you’re elected as an MLA.”
“You’re there to express your opinion, and we’re not all ‘yes-people.’ That’d be no good in politics.”
More than a decade ago, New Brunswick infamously came close to selling NB Power to Quebec for nearly $5-billion dollars. In 2009 Howard Epstein, a Nova Scotia NDP MLA who fought against the NS Power deal in 1992, warned New Brunswickers about the path they were on.
According to a CBC article in 2009, Epstein told a Moncton crowd that governments tend to undervalue their assets when making such sales.
“Even when I look back on this [Nova Scotia sale] again I remain gobsmacked, stunned by the price. The price that was paid was $800-million,” said Epstein in the CBC article.
Other critics have claimed that Nova Scotia Power gives sub-par service to its customers. In 2020, the company was fined $250,000 by the Nova Scotia Utility and Review Board for failing to meet customer service and performance targets.
“I think with Nova Scotia Power, we thought that a private company would do a better job,” said Bacon. “But it actually didn’t turn out that way.”