The announced reduction in energy rates by Ontario premier Kathleen Wynne last week is nothing more than a shell game that uses tax dollars and long-term debt refinancing of Ontario’s energy system for an electoral ‘hail-mary’ next spring. Wynne’s plan will see a net reduction of around 25 per cent on the average electricity bill and increased help for rural communities and low-income users. On the surface any reduction in the price of electricity is a good thing, but how are we going to pay for it?
Construction of new power plants and other energy infrastructure will be financed over that project’s life span. Up until now those projects were financed over 20 years. This plan means paying more debt-financing costs year-after-year, adding to the mountain of long-term debt Ontario has, which is the highest of any province, state or territory in North America. Wynne’s plan will cement that notable place for decades to come. The millions in annual interest increases could be better spent on education, health care, or not taken from taxpayers in the first place.
The bigger issue with Wynne’s plan is it is only a residential rate cut. It does not deal with commercial or industrial rates which Ontario already has the highest rates in North America once delivery and Global Adjustment are factored in. The government’s long-term energy plan still shows a 30 per cent increase in rates by 2018. Ontario’s high commercial and industrial electricity rates is considered a job-killer as some companies look to relocate out-of-province.
NDP Leader Andrea Horwath put forth her party’s vision which is similar to this. Progressive Conservative leader Patrick Brown has not released any plan or policy stating one will be coming soon.
The big picture is that our electricity system is a mess that all three parties have helped shape. From sky rocketing costs of nuclear plant construction under Bob Rae; failed deregulation under Mike Harris; 14 years of increases, green energy and government mandated over inflation of prices under Dalton McGuinty and Kathleen Wynne.
This plan is yet one more attempt to “fix” our electricity system via a financial shell game, giving a reduction now with one hand, while sticking everyone with the bill in the future. That is no long term vision, it’s living pay cheque to pay cheque.