Government cutting electricity bills by 25 % - will that keep them in office? Have a look at options.

News 100 redBy Pepper Parr

March 3, 2017

BURLINGTON, ON

This article has been corrected.  We initially said there was a 25% reduction being put in place which was on top of the 8% deduction on the HST tax that applies to Ontario power bills.  That was incorrect.  The 25% includes the 8% HST reduction.  Our apologies.

The push is on.

The provincial government has every member of the Legislature out in the field tell you about that 25% reduction in your hydro prices – that on top of the HST they stopped collecting from you on the provincial part of that tax,

A number of political pundits think this drive is being done to save a failing government that has to head to the election polls next year. Maybe.

The message from the government is that Ontario is lowering electricity bills by 25 per cent on average for all residential customers as part of a significant system restructuring that will address long-standing policy challenges and ensure greater fairness.

Hydro - provincial message

You will see this advertisement often and you will be told the the story even more often. Will the public buy it? Depends on what the public has in the way of an alternative government.

Starting this summer, Ontario’s Fair Hydro Plan would provide households with this 25 per cent break. Many small businesses and farms would also benefit from the initiative. People with low incomes and those living in eligible rural communities would receive even greater reductions to their electricity bills. As part of this plan, rate increases over the next four years would be held to the rate of inflation for everyone.

These measures include the eight per cent rebate introduced in January and build on previously announced initiatives to deliver broad-based rate relief on all electricity bills.

Taken together, these changes will deliver the single-largest reduction to electricity rates in Ontario’s history.

Electricity rates have risen for two key reasons:

• Decades of under-investment in the electricity system by governments of all stripes resulted in the need to invest more than $50 billion in generation, transmission and distribution assets to ensure the system is clean and reliable

• The decision to eliminate Ontario’s use of coal and produce clean, renewable power, as well as policies put in place to provide targeted support to rural and low-income customers, have created additional costs.

The burden of financing these system improvements and funding key programs has unfairly fallen almost entirely on the shoulders of today’s ratepayers. To relieve that burden and share costs more fairly, two system fixes are being undertaken.

Recognizing that the electricity infrastructure that has been built will last for many decades to come, the province would refinance those capital investments to ensure that system costs are more equitably distributed over time. In addition, a number of important programs, such as the Ontario Electricity Support Program (OESP), will now be funded by the government instead of by ratepayers.

The province will also launch a new Affordability Fund, enhance the existing OESP and Rural or Remote Rate Protection (RRRP) program and provide on-reserve First Nations households with a delivery credit. These new measures will cost the government up to $2.5 billion over the next three years.

Notwithstanding that hydro rate relief costs will add significant pressure on the fiscal framework, the province continues to project a balanced budget for 2017-18, and will provide a full update on its fiscal plan in the spring budget.  Maybe.

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6 comments to Government cutting electricity bills by 25 % – will that keep them in office? Have a look at options.

  • D.Duck

    This is nothing but a Liberal shell game. Now you see the cost saving but you don’t see the 1.4billion dollars per year interest payback. The analogy of the long term mortgage rate is correct here. If you pay more upfront, then in the long run, you pay significantly less. Any home owner knows this?

    Our children will pay for this debt recovery.

    This is ALL about re-election PERIOD.

    You have forgotten other reason why electricity rates has gone up so much:
    – horrendous deals with Samsung and other clean energy initiatives
    – hidden taxes and now the Cap and Trade
    – partial privatization of OPG & corresponding wages to keep the best……..please, that line has been used by this gov’t too many times and is now a joke.
    – complete mismanagement and fiscal irresponsibility of this portfolio and well as most other under their care

    Wynne is at her lowest popularity and ALL of this is her own self-righteous fault. She is bankrupting Ontario and passing the buck (literally) to our children to pay for. She is betting that many Canadians worry more about today then their children’ tomorrow.

    Finally, money is finite and even with this Liberal shell game, other publicly funded programs will be affected…….I wonder which ones?? Alas, if Wynne gets re-elected, then like the USA, we only have ourselves too blame. When she starts to introduces an Inheritance Tax, I and my money will be out of Ontario before the first reading.

  • Doug

    Do you not know by now why teachers got 4% raise so early (plus a little extra for the union exe’s) and the government workers also got theirs early. Since these xxxxxx xxxx make up such large numbers, the liberals will be re-elected using your money.

    Until we have a rebellion like USA and Britan did, we are doomed to keep repeating these disasters.

    Why do we keep electing people who have no back ground in running multi-billion dollar business, who’s resume reads “school teacher”.

  • Steve

    So where is the money coming from??? A shell game no doubt. Ontario is like Saudi Arabia with natural gas. So why are we not building new cheap clean plentiful natural gas plants, and I mean giant ones? Unreliable.. super expensive… alternative energies are what is driving up the costs. How long before all our big businesses (whats left of them), Ford, GM, Honda, etc, leave this energy kooksville behind for places (US) where energy costs will be going down down down. Hasn’t Germany’s disastrous energy policies been an example of exactly what not to do?

  • Steve Warner

    I’m not sure where they are getting the 8% rebate number … it was a little over 5% from my calculations. My hydro bill was $133.84 (monthly) before taxes, which equates to $17.40 for HST (13%). If I multiply $133.84 by 8% it’s $10.72 but what appeared on my bill was $7.56 as the rebate.

  • Joe Gaetan

    If it’s that easy to drop the rates by 25%, why did it take so long to figure out electricity rates were too high and why now? While the government fiddled people burned through a lot of cash. We were also promised vehicle insurance rates would drop by 15% and then found out that the only thing that dropped was our coverage.Any way you look at this we will end up funding bad decisions to the tune of billions for a very long time.We don’t need pundits to tell us the government has poor ratings and that an election is not that far away.This is nothing more than a poorly disguised seat saver program.

  • James

    Too little too late. I simply do not trust Wynne or the Liberal party to represent my best interests. I don’t yet know who I will vote for, but I certainly know who I won’t be voting for. They had their chance, and have been a disaster across the board. This little publicity stunt won’t fool anyone. Time to take a chance on someone new.