Ontario has dedicated C$3.2 billion ($2.4 billion; €2.2 billion) from the 2015 sale of shares in Hydro One, a local utility, to a fund focused on propping up the province’s infrastructure.
More will soon be on the way for the Trillium Trust, as the fund is dubbed, since the Ontario government raised roughly C$1.97 billion through a public offering of Hydro One last May after an over-allotment was fully subscribed by new shareholders.
The over-allotment option was exercised after the state drew C$1.7 billion through the sale of about 72 million shares on 5 April, allowing an additional 11 million to be divested.
The government, which retains 70 percent of Hydro One, intends to reduce Ontario’s ownership to 40 percent over time via future offerings while remaining the largest shareholder in the company.
“Ontario is on track to generate approximately $9 billion in gross proceeds and other revenue benefits from broadening the ownership of Hydro One,” said Ontario’s Ministry of Finance in a statement.
“Taxpayers continue to benefit from dividends in the company, allowing the government to increase investments in infrastructure programmes such as GO Transit Regional Express Rail and the Ontario Community Infrastructure Fund without further raising taxes, increasing debt or cutting public services.?”
The province had previously directed C$1.35 billion in net proceeds from the sale of its shares in US carmaker General Motors, bringing the total balance of the Trillium Trust to more than C$4.5 billion.
“Additional net revenue gains from unlocking value from Hydro One has allowed the government to increase dedicated funding to Moving Ontario Forward by C$2.6 billion in the 2015 Budget, bringing the total to C$31.5 billion over a 10-year period, and supported an increase in total infrastructure spending to an unprecedented C$160 billion over a 12-year period,” the ministry said.
The planned C$160 expense is expected to go towards funding roads, bridges, transit systems, schools and hospital projects.