Hydro Therapy

Innovation is not a term one thinks of when thinking of Manitoba. Innovation is an increasingly attractive theme within governance which Manitoba should use. Innovative thinking is what this province needs in order to begin to improve. The consequences of using old practices as opposed to innovative thinking are disastrous, especially in a time where Manitoba has already fallen behind and continues to do so. Manitoba is without a doubt a have-not province, but why is that? Manitoba is a province that has plentiful resources and a unique economy. The problem is that Manitoba’s economy is hallmarked by a grossly over intrusive state. In particular, consider Manitoba Hydro. Hydro is a completely state owned entity. This crown corporation has a virtual monopoly on the supply of electricity, energy sales and energy production in Manitoba.

Here is a place where we could begin to use innovative thinking. Manitoba could use a form of innovation and deregulate the market to allow room for private sector growth. Manitoba is backward in the sense that the state seems to think that they have to supply jobs, where the fact of the matter is that the government should only be in markets to stimulate economic growth and development. Governments should be involved in the economy insofar as it should be a guide, not the sole major player. Deregulation would allow companies (other than the Crown owned Manitoba Hydro) to try to sell electricity in Manitoba.

That is not saying Manitoba should privatize Hydro, but allow competition. Allowing other organizations to sell electricity in Manitoba would benefit Manitobans, and the province of Manitoba. It could force electricity prices down due to mass competition. I am not saying I don’t appreciate the low rates offered by Manitoba Hydro, but with market deregulation prices could drop, and quality of service could increase. As a crown corporation, isn’t their responsibility to improve service? Manitoba Hydro would not be at a loss. Manitoba could then redirect energy, or expand operations to increase the export of electricity to places like California or even Ontario, where the federal government has recently proposed funding for a transmission line to connect Manitoba and Toronto. By exporting more electricity at a higher price than having to supply local electricity at a lower price, Manitoba Hydro would benefit. By allowing this competition for local electricity, Manitoba would enrich its economy, giving a stimulus for growth allowing private companies to take root, and as a consequence would leave room for further innovation in different areas. All it takes is some creative thinking (which Manitoba is apparently incapable of – looking at the slogan), the willingness to change, the adoption of innovative practices and the will to succeed.

What evidence is there to support this idea?
MTS.

MTS is a shining example of how innovative thinking can benefit Manitoba. Once again, I am not saying we should privatize Hydro completely as was eventually done with MTS, but deregulate. MTS deregulated the market before being privatized. Manitoba should apply this principle to Hydro. Deregulating the telecommunications market allowed competition. For the first time, large private corporations began to set up telecom operations in Manitoba. The first Bell Canada payphones were established in Manitoba. Consequently, due to the deregulation of the market, and the readying for MTS to be privatized, phone prices dropped and stock prices rose (stocks were gradually released for public tender in 2 phases, the first of which the government was the majority holder). The quality of service to citizens rose as another result. Furthermore, the massive investment the private sector made in MTS allowed it to become the innovative company it is today. That is to say under a highly regulated monopolistic environment, the direct investment of public funds would not be acceptable to conduct research and development which led to the ability to provide services in not just land line telecommunications, but cellular, internet and even television. The first step needs to be taken by the province of Manitoba to deregulate the energies markets in order for further development to take place.

Therefore, as seen by the experiences of MTS, the increased competition that would foster a richer economy, higher profitability, a rise in the quality of service provided, and the increased export of energy without affecting local consumers, Manitoba should consider using a degree of innovation and experiment with the deregulation of the market in which Manitoba Hydro holds an unjustified monopoly.