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After the 2002 case, the Ontario government amended provincial legislation to create the authority Justice Gans had found lacking. In doing so, the government set up statutory limits on what any future administration could do with the funds from any sale of Hydro One assets. In particular, the province’s Electricity Act was amended to require that sale proceeds be used to pay down debt.

The Ontario government has explained what it intends to do. It would first pay down debt up to the book value on the proportionate share of Hydro One that is sold. After that, the government says the net proceeds on top of that would be used to fund public transit. Shrybman says this is off-side of the Electricity Act, at least as it is currently worded.

“The government has no lawful authority to use the proceeds from such a sale to fund transit infrastructure, as it has declared its intention to do,” Shrybman writes.

Of course, the government could remedy the problem by simply amending the Electricity Act and any other laws. The government seems prepared to do just that. “There will be a number of legislative amendments that will permit us to do what we can do,” said Ed Clark, chair of the Premier’s Advisory Council on Government Assets, on Thursday at a briefing on the asset sale proposal.