The province has announced an agreement-in-principle to sell up to approximately 15 million shares of Hydro One Limited (2.5 per cent of the total current outstanding common shares) to First Nations.
The government says the agreement-in-principle demonstrates the goodwill envisioned by the Political Accord to promote stronger economic relations and is one of many steps on Ontario’s journey of healing and reconciliation with Indigenous peoples.
If ratified, this new arrangement will provide meaningful opportunities to First Nations for collective wealth creation and to advance economic development initiatives.
Each First Nation will have up to two years from signing of binding agreements to decide whether to participate in this arrangement. All First Nations in Ontario are invited to participate. A minimum threshold of 80 per cent First Nation participation by the end of 2017 is required for this transaction to close.
If the agreement is ratified, Ontario would sell the shares to a new investment vehicle owned collectively by First Nations. This purchase would be financed with a 25-year loan from the Province of up to approximately $268 million, depending on the level of First Nation participation.
The shares would be sold at $18 per share, which is above the Province’s book value for the shares. Ontario would also provide seed capital to a new First Nation investment fund of up to $45 million in cash, depending on the level of First Nation participation, over the initial three years.
Thirty per cent of the utility’s shares have already been sold, and if 15 million shares are sold to the First Nations, it would represent another 2.5 per cent.
Ontario Regional Chief Isadore Day says “This is an example of reconciling our interests. Having meaningful equity participation in Hydro One is a unique long-term wealth creation opportunity for our collective First Nations. More significantly, we now have the opportunity to secure our rightful place not only in the energy sector but in the economy as a whole.”