Ontario cuts hydro bills by 17%, But Will You See The Change?

Ontario cuts hydro bills by 17%, But Will You See The Change?

Attempting to appease an angry electorate in the face of soaring electricity rates, Premier Kathleen Wynne promises to reduce subscriber bills by an additional 17% on average.

Ms. Wynne described the current rates “unfairly high”.

In January, the Liberal government eliminated the provincial portion of the HST on electricity bills, an 8% rebate that will cost the public treasury $ 1 billion annually. But the Prime Minister said it was not enough.

The next provincial election will be held next year and electricity rates are currently a major concern of voters.

Ms. Wynne promises that rates will not increase more than the rate of inflation over the next four years.

Premier Wynne said she “rehomes” the network over 30 years to provide short-term respite to subscribers. The government will:

Reschedule investment in the network and supply contracts;
Funding programs for the less affluent, rural and First Nations through public funding rather than electricity bills.
A new Affordability Fund will be created to help consumers who are not eligible for programs for low-income Ontarians to increase their energy efficiency by changing their windows, for example, or by insulating their homes better.

These measures at a cost of $ 2.5 billion over three years will be funded by the provincial government and not by consumers of electricity on their bills.

Ontarians will pay more for investment in electricity generation over a longer period of time. However, consumers will have to pay interest annually, which could reach up to $ 1.4 billion per year. Kathleen Wynne recognizes that it means paying more, but she believes it is a fairer formula for consumers.

The first reductions should appear on electricity bills in June.

Not all consumers will get the same discounts. Several factors come into play, such as monthly consumption and geographic location.

Ontarians who use more electricity should see larger savings. For example, a farmer could obtain a reduction of 51% (savings of $ 300 / month).

To date, the Conservatives have not presented a concrete plan to counter the surge in tariffs.

New Democrat leader Andrea Horwath has proposed canceling the privatization of the Hydro One electricity distributor and eliminating time-varying rates. But these are proposals that would cost billions in the short term to the public treasury.

The NDP also criticizes the government for not tackling what caused the rapid rise in electricity prices and accuses the Prime Minister of stifling the problem with measures that could cost up to $ 40 billion Interest.

Attempting to appease an angry electorate in the face of soaring electricity rates, Premier Kathleen Wynne promises to reduce subscriber bills by an additional 17% on average.

Ms. Wynne described the current rates “unfairly high”.

In January, the Liberal government eliminated the provincial portion of the HST on electricity bills, an 8% rebate that will cost the public treasury $ 1 billion annually. But the Prime Minister said it was not enough.

It’s been too long since politicians including me make mistakes in electricity.

Kathleen Wynne, Premier of Ontario
+ 186% in peak periods and + 256% in off-peak periods – Inflation over 10 years: + 17.69%
Increase in electricity prices between November 2006 and November 2016 – Source: Ontario Energy Board Photo: Radio-Canada / Vincent Wallon
The next provincial election will be held next year and electricity rates are currently a major concern of voters.

Ms. Wynne promises that rates will not increase more than the rate of inflation over the next four years.

These measures at a cost of $ 2.5 billion over three years will be funded by the provincial government and not by consumers of electricity on their bills.

Ontarians will pay more for investment in electricity generation over a longer period of time. However, consumers will have to pay interest annually, which could reach up to $ 1.4 billion per year. Kathleen Wynne recognizes that it means paying more, but she believes it is a fairer formula for consumers.

The first reductions should appear on electricity bills in June.

Not all consumers will get the same discounts. Several factors come into play, such as monthly consumption and geographic location.

Ontarians who use more electricity should see larger savings. For example, a farmer could obtain a reduction of 51% (savings of $ 300 / month).

Analyzes and reactions

Analysts warn that Ontarians will end up paying more in the long run.

It’s like having a longer mortgage for a home.

Mark Winfield, Professor at York University
The Prime Minister acknowledges that, but she says it is more “just” for subscribers.

Leader of the Opposition, Patrick Brown, accuses the government of even more debt for Ontarians. “Electricity bills will temporarily decline, but consumers will eventually have to repay the decrease,” he said.

Whether we are paying now, paying tomorrow, eventually, the Liberals will again increase electricity rates.

Patrick Brown, leader of the Progressive Conservative Party
Patrick Brown also accuses the government of increasing the province’s debt by $ 42 billion over a 30-year period.

Denise Gallant, a Timmins resident
Denise Gallant, a resident of Timmins Photo: Radio-Canada / Jean-Loup Doudard
Conservative MP Todd Smith adds that the Liberal government is not addressing the “root of the problem” and does not seem to realize that subscribers and taxpayers are the same people.

We now know how much the campaign will cost the Liberals re-election: $ 5.7 billion.

Todd Smith, Conservative MP
To date, the Conservatives have not presented a concrete plan to counter the surge in tariffs.

New Democrat leader Andrea Horwath has proposed canceling the privatization of the Hydro One electricity distributor and eliminating time-varying rates. But these are proposals that would cost billions in the short term to the public treasury.

We will all pay for this respite, one way or another.

Andrea Horwath, Leader of the New Democratic Party
The NDP also criticizes the government for not tackling what caused the rapid rise in electricity prices and accuses the Prime Minister of stifling the problem with measures that could cost up to $ 40 billion Interest.

Good for the rich?

According to the Canadian Center for Policy Alternatives, the better-off are those who are most benefiting from the January abolition of the provincial portion of the HST on electricity bills. A group report indicates that households earning less than $ 42,000 will save an average of $ 84 per year compared to $ 181 for those with incomes of $ 176,000 or more.

The Canadian Union of Public Employees (CUPE) president, Fred Hahn, says the plan is misleading.

Taxpayers will subsidize their own bills reductions. Ontarians will pay as much, but over a longer period.

Fred Hahn, President of the Canadian Union of Public Employees, Ontario
The government’s plan to spread the costs of the overall adjustment is policy, not a solution to a crisis in the electricity sector they created.

Christine Van Geyn, Director of the Canadian Taxpayers Federation, Ontario
Good news for some

The Federation of Northern Ontario Municipalities congratulates the Liberals for a plan to reduce electricity bills.

“We are delighted that electricity consumers will soon be able to see the benefits of this announcement and commitment that electricity prices will not rise above the rate of inflation over the next four Years, “said Alan Spacek, the mayor of Kapuskasing and president of the Federation in the statement.

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One thought on “Ontario cuts hydro bills by 17%, But Will You See The Change?

  1. The proposed cut was first reported by the Toronto Star. Sources told the newspaper the Liberals intend to slash soaring hydro bills largely by “smoothing out” the financing costs of electricity generation contracts over longer periods.

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