Supercorp Flop – You Read It Here First

The front page of today’s Globe and Mail (Ontario Edition) proclaims, “Supercorp is dead.”

The story goes on to note, “many government insiders have suggested that opponents of a potential deal got too much of a head start on framing the issue.” Indeed, this blog got a head start framing the issue back in December, when The Globe reported that the Ontario government was considering privatization.

Today’s Globe story provides the Ontario government’s reasons for rejecting the Supercorp privatization proposal. First, the proceeds would have to be put against the provincial debt, which would generate a minimal return equal to the provincial bond rate. Second, potential investors were not keen on an unwieldy conglomerate in which the government would hold a controlling interest. Third, partially privatizing provincial enterprises could expose them to federal corporate tax.

Let the record show that I posted all of those points on March 6, the same day that The Toronto Star reported the Supercorp musings. I repeated them in an op-ed that The Star printed on March 10.

The Ontario government paid Goldman Sachs and CIBC $200,000 to provide this assessment of the Supercorp option. It could have gotten the same analysis for free from this blog.

One comment

  • Hi Erin,

    You were right — of course! It is noteworthy that Dwight Duncan couldn’t find anyone to say that Supercorp was a good idea. Right, left, in-between, nobody liked it but Goldman Sachs!



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