FAO: Ontario electricity bills not going down by 12 per cent, despite PC promise

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FAO: Ontario electricity bills not going down by 12 per cent, despite PC promise's Profile


A new report by Ontario’s Financial Accountability Office (FAO) adds some caveats to an old promise by the Doug Ford campaign.

Electricity bills are not expected to fall by 12 per cent; in fact, they have risen. However, the province argues they will still wind up 12 per cent lower than under previous policies.

The promise

During the 2018 election, the Progressive Conservatives pledged to bring down bills by 12 per cent. Once elected, officials scrapped the Liberals’ Fair Hydro Plan and replaced it with the Ontario Electricity Rebate (OER) program. This altered some tax rebates and changed the way the province financed electricity at the time. In 2021, the province took on some additional costs relating to renewable energy programs.

As the report notes, a typical person’s electricity bill rose by 4.3 per cent between 2018 and 2021. Going forward, bills are projected to rise by two per cent each year, from $121 monthly in 2021 to $178 monthly in 2040.

“The FAO spoke with staff at the Ministry of Energy and was informed that the government does not intend to lower electricity bills by 12 per cent from 2018 levels,” reads the report. “Instead, the government intends to meet its commitment to lower residential electricity bills by 12 per cent by comparing residential electricity bills under the current electricity subsidy programs against what electricity bills would have been under the electricity subsidy programs from 2017.”

The report notes that while bills are rising, officials expect that they will be lower than what they would have been under the previous government’s Fair Hydro Plan.

By 2025, the gap in pricing (between the older and newer plans) will be around 12 per cent, keeping the promise on an arguable technicality.

Due to the way the two plans were structured, the theoretical gap would peak in 2029 (at 23 per cent) before narrowing.

 

In a release Wednesday, the provincial opposition decried the campaign promise as a “sham.”

“People in Ontario are under more strain than ever,” said NDP Energy Critic Peter Tabuns. “Families are working harder than ever, but we’re all swimming upstream because the cost of everything is rising so fast.”

“The FAO makes it clear that the scheme Ford put forward was always magic beans, smoke and mirrors and a shell game,” he continued. “It was built to be a facade, not to lower hydro bills. Instead of lowering hydro bills, Ford hiked them. Ontarians are still paying the unfairly high prices caused by Steven Del Duca and the Liberals selling off Hydro One, and Ford has done nothing to fix that.”

To read the full report, click here.

“Tens of billions handed over to Loblaws, Amazon and others”

The government also came under fire Wednesday by the Canadian Union of Public Employees (CUPE).

As noted, the province took the partial cost of some renewable energy programs in 2021 (about 85 per cent of the costs previously assigned to Ontario’s electricity buyers). Those costs are estimated to add up to $15.2-billion between 2020 and 2040, according to the FAO.

This lowered electricity bills across the board – for homes, businesses and factories, among others.

However, this was offset by another measure. “When the Province [took on those additional costs], the Province also lowered the rebate provided to residential, small business and farm ratepayers [buyers of electricity] through the OER so that these ratepayers would have no net change to their electricity bills,” reads Wednesday’s report. “This means that only large commercial and industrial ratepayers that are not eligible for the OER received a net reduction in their electricity costs.”

“While the program will reduce the electrical costs for all ratepayers, the Province will clawback subsidies to residential, farm, and small business ratepayers by lowering the discount provided by the Ontario Electricity Rebate,” argued CUPE in a release Wednesday.

In Wednesday’s report, the FAO noted Ontario will spend about $118.1-billion between 2020 and 2040.

About one-third ($39.8-billion) of the money is estimated to help out “non-residential ratepayers.” That term applies to businesses and factories – any place that is not a house that buys electricity. “While two-thirds of the spending will benefit Ontario households, one-third will benefit businesses,” said CUPE.

“Companies like Loblaws who have actually profited during this pandemic are getting government money to pay their hydro bills while public services are stretched thin due to years of underfunding,” said Fred Hahn, President of CUPE Ontario, in a statement. “We’re talking about billions that could – and should – be funding a minimum care standard in long-term care, make our schools safe, ensure a supply of PPE for all workers who need them, reduce surgical wait times in hospitals, and so much more.”

“The foundation of the problem is the privatization of our Hydro system,” he continued. “When we had a fully public system, power was available at cost, for everyone. Now an ‘Electricity Market’ dictates prices that are unaffordable for many people and small businesses. If we really want to address this issue, the best way to do it is to make hydro public again.”

Graph produced by the Financial Accountability Office of Ontario

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