Law Times

Page 6 august 10, 2015 • Law Times www.lawtimesnews.com COMMENT Let's be flexible on 10-year term limits he Ontario government has some good reasons for its 10-year limit on appointments to administrative tribunals. It took some time for it to reveal them, however. When Law Times reported recently on Ontario ombudsman An- dré Marin's concerns about the impact of a 2006 cabinet directive that places a limit of 10 years on appointments to regulatory or adjudicative agencies, the premier's spokeswoman didn't bother to provide answers to questions about the reason for it. Last week, a spokesman for the Trea- sury Board Secretariat offered an explanation. "The 10-year limit is in- tended to ensure regular membership renewal on the government's ad- judicative tribunals and regulatory agencies," wrote Jason Wesley. "Reg- ular membership renewal fosters a diversity of perspectives, continually refreshes the appointee roster, and provides other qualified individuals with the opportunity to serve." The reasons seem fair. As Wesley also noted, the 2006 change was an effort to standardize the length of appointments. The previous arrange- ment, he noted, provided for a maximum appointment of three years with reappointment subject to the appointing authority. But as Marin noted, therer are significant concerns. His report fol- lowed a recent study by the Society of Ontario Adjudicators and Regu- lators that warned about tribunals' ability to fulfil their statutory man- dates in light of the looming loss of experienced members. With tribunals feeling the full brunt of the change next year, several — particularly the Workplace Safety and Insurance Appeals Tribunal groia a formidable opponent in Hydro one sale esperate for revenues, the On- tario Liberals were full steam ahead on the sale of Hydro One in mid-July. Then they hit the iceberg. Maybe it was the iceberg, in the for- midable form of Joe Groia, that had hit them. Regardless, Groia shouldn't need much of an introduction. He's a bencher of the Law Society of Upper Canada and a widely recognized securities lawyer who's both passionate and tenacious. In this case, the Canadian Union of Public Employees, one of the stakeholders opposed to the sale, has retained Groia & Co. PC. Groia's first action was to simply write to the Ontario Securities Commis- sion to note that the government's move to block the Hydro One board from over- sight amounted to interference with its mandatory duties and responsibilities. "The Liberal government has side- lined the Hydro One board of directors in advance of the proposed sell-off of this public asset," his clients suggested in their announcement. "In an [initial public of- fering], the board of directors is normally responsible for protecting the interests of all stakeholders in the corporation — and in this case, those stakeholders include the people of Ontario, the workers of Hydro One, and the investors in Hydro One." A few days later, the gov- ernment capitulated and re- instated the board of direc- tors, promising the OSC that it would fully comply with its obligations in ensuring fair treatment of all parties in the impending sale. At the same time, the min- ister of energy announced a new board was in place at Hydro One, chaired by Da- vid Denison, former president and chief executive officer of the Canada Pension Plan Investment Board. Groia and his colleagues are justifiably happy with the results of the first skirmish. Now, it's a waiting game to see when the other shoe will drop. "It was an unprec- edented notion. They are selling shares but they take away the power of the board to oversee the sale," he says. The core issue, he says, is the rules say the board isn't responsible just to the government or key shareholders but to the company as a whole. That includes all stakeholders from employees to cus- tomers to other shareholders. "It really upset the balance because a board of directors has to act broadly in the best interest of the company," he says. "The question I can't get answered is why did they do that? We've yet to get an answer." With the battle lines drawn, the next move is in the government's court, he says, with all eyes on the new board of directors to see how it will proceed. The board, he says, must address a much wider set of issues beyond the govern- ment desire to sell off 60 per cent of Hydro One, presumably to the highest bidder. With the removal of agencies such as Hydro One from public scrutiny through regulatory changes introduced in the Budget Act, the question of transparency becomes even more critical. "My focus is on the public market and public companies have an obliga- tion to act in the public interest, and you would expect a government to be sensi- tive to those kinds of issues not only do- ing what was the minimum but to be at the high end of that," says Groia. The next step, he suspects, will be to issue a preliminary prospectus. "It has to be public. If it isn't, it will be the end of civilization as we know it," he says. "The announcement of a sale is not the end of the process. It is the begin- ning of the process, so I would think the board would consult all the stakeholders broadly about various elements of the company. But when they go to the next stage, they will know there are a group of people watching closely." Of course, the government doesn't re- ally want a transparent process. Premier Kathleen Wynne has made no secret of her disdain for Prime Minister Stephen Harper, but she's acting more and more like him every day in some ways. We're still no closer to understanding how a carbon tax will work or how the On- tario pension plan will operate. Indeed, we have no assurances the pension fund won't simply be a revenue tool to fund capital spending as another way to borrow money but this time from its own taxpayers. They want us to trust them, but that's the problem. For trust, there has to be transparency. LT uIan Harvey has been a journalist for more than 35 years writing about a di- verse range of issues including legal and political affairs. His e-mail address is ian- harvey@rogers.com. ©2015 Thomson Reuters Canada Ltd. All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written per- mission. The opinions expressed in articles are not necessarily those of the publisher. 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The society presumably has its own interest in raising the red f lag, but the concern is fair, es- pecially given the need for experienced adjudica- tors. And it rightly points out the lack of clarity in a provision in the directive that provides for additional appointments beyond 10 years in exceptional cir- cumstances when that would be in the public interest. Obviously, some f lexibility would help. The gov- ernment's goals are entirely reasonable, but with the evident negative ramifications looming during a short period of time, it would be wise to provide some mechanism to address them. — Glenn Kauth Queen's Park Ian Harvey D T

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