Nuking DRTP

Do you think that DRTP and the Bruce Nuclear Plant deal could somehow be linked together to save face for OMERS?

I wonder if the way that Messrs. Haggis and Nobrega discussed the new investment opportunity at the Plant was the same rationale that was used when DRTP was launched. If so, taxpayers province-wide, OMERS contributors and pensioners might be worried. Cameco, the world’s largest, low-cost uranium producer, pulled out of the Bruce A investment program concluding that “the final agreement with the government did not meet its investment criteria…"

Haggis said:

• “Our increased investment in Bruce Power is consistent with the rebalancing of our asset mix to put greater emphasis on private market assets such as infrastructure investments…Energy generation is an attractive opportunity for large institutional investors like OMERS and Bruce Power has been a successful investment for us. It meets our investment criteria by providing long term, stable, inflation-protected returns to help us meet our future pension obligations."
  
  

Nobrega said:

• "The investment demonstrates Borealis Infrastructure's commitment to invest in the renewal and enhancement of Ontario's infrastructure assets. This investment is a win-win for the Province of Ontario and OMERS members across the province. The Province secures significant additional long-term electricity supplies at reasonable cost and the investment provides stable, long-term returns for the Fund."
  
  

Obviously this nuclear deal was done while Dwight Duncan was Minister of Energy. Now that he is Minister of Finance, and his predecessor went out chasing OMERS money, we can guess how well the Government will treat them in the future. (Sid Ryan…good luck with your OMERS quest now!) I won't even mention the Borealis connection with the Federal Government!

When Borealis talks about "Detroit River Rail Tunnel" as their asset and de-emphasizes DRTP, I would not be surprised if some genius thinks up a deal whereby the Governments will buy their "corridor" property and then OMERS will arrange for the money to be given back in another P3 deal. (What do you think the blue line on the Transport Canada consultant's map was for? Remember also that a possible Government purchase was a component of the JMC Report)

In this way, OMERS suffers no embarrassment that they have to explain to FSCO if they wrote-down DRTP, they make a huge book profit to help show a great rate of return and get a new capital asset. Ontario gets more OMERS cash for infrastructure.

Surprise, surprise, that approach sounds so similar to what the Mayor wanted to do in the Schwartz Plan: the Senior Level $300 million purchase from OMERS/CP Rail and then they agree to re-invest the amount into a new rail tunnel.

Who is smarter, Cameco or OMERS? Only time will tell. If it is Cameco, then OMERS's contributors and pensioners might have some questions to ask, never mind taxpayers across Ontario. If OMERS is absolutely wrong in this investment, and in others, and is locked in then what happens? It seems to me that this is a fundamental question that the Government's review of OMERS should be discussing.

Wow, isn't high finance and politics fun!