Response: Hydro One pension ruling

The National Post published an article on January 14, 2010, called "Hydro One's third strike", by Barry Critchley. It led with a mention of Hydro One's position as our 2009 Top Corporate Citizen, but went on to detail a legal battle between the company and a group of former employees.

This week the Court of Appeal for Ontario dismissed an appeal brought by Hydro One regarding the payment of pension benefits to employees terminated in the early 1990s. Two of these employees had applied to the Financial Services Tribunal (FST) for a "partial windup of Hydro One's pension plan, an arrangement that would bring various statutory rights, including early-retirement benefits," says the Post. The FST determined the terminated employees were eligible. Hydro One has appealed this decision, and lost, three times.

We are aware that every large company is grappling with numerous social and environmental issues all the time, and our Best 50 Corporate Citizens is our attempt to synthesize who's leading corporate Canada, and doing the best job of managing and solving these social and environmental issues.

In our 2009 analysis, we included labour relations as a criteria: we examined any work stoppages over the last three years from the HRDC database; decisions or rulings against our considered companies listed by the provincial labour relations boards in calendar year 2008; and whether a company has a majority of unionized workers. Using these data, Hydro One fared well in our labour relations category. As our ranking is an annual one, we will continue to reevaluate companies against all indicators, and note the Court of Appeal's ruling in this year's analysis.

However, we would like to note that Hydro One has demonstrated leadership in several areas. The company has traditionally had a generous pension fund--it had the top pension quality in the utilities sector, with more assets for each current fulltime employee than any other company (although this ratio can sometimes be skewed by companies whose fulltime employee base has shrunk in recent years). Hydro One is also one of four companies in our Best 50 to have a female CEO, and its board of directors includes three females and one director from a visible minority. While it was spurred by government policy, the utility has rolled out with gusto over 780,000 smart meters across Ontario by end of 2008, with a plan to have a smart meter in every home and business by this year, enabling the implementation of time-of-use rates. Hydro One’s comprehensive Conservation and Demand Management program, launched in 2005, saves 272 million kWh each year.

As the National Post writes, there is a high standard for our 2009 top corporate citizen, and we expect no less from Hydro One. We welcome this opportunity to communicate the rigor of our ranking and hope to see this pension issue resolved fairly and quickly.

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