In politics, as we wrote Wednesday, people get upset about the little things. Remember Bev Oda’s $16 glass of orange juice? In the context of a 12-figure federal budget, or ministerial trips justifiably running into the tens of thousands of dollars, some overpriced OJ hardly mattered. And yet it galled. Small misdeeds are relatable. A big, complicated and massively costly government screw-up, in contrast, sometimes leaves people cold.
Let’s see if this warms you up. On Wednesday, Ontario’s Auditor-General announced that, between 2006 and 2014, thanks to incompetence and mismanagement on the part of the province’s Liberal government, Ontarians overpaid for electricity to the tune of $37-billion. And over the next 18 years, consumers will be overpaying to the tune of another $133-billion.
Let’s try to put those numbers in context. Electricity overpriced by $170-billion is equivalent to $12,326 in excess costs for every man, woman and child in Ontario. Over 27 years, that averages out to $457 per person, per year. According to Statistics Canada, the average Ontario household has 2.6 people, so for the typical family, we’re talking about a power utility bill roughly $1,188 higher than it should be – every year.
The inflated costs cover both consumers and business, so some of that shows up not on the consumer’s bill, but on the tab of the province’s businesses, which then pass those costs on to customers.
Why is Ontario’s electricity so costly? Because the Ontario government has for the past decade been running the province’s power sector with something approaching the skill of Soviet commissars. It has politicized decision-making, taking it out of the hands of independent experts. It deliberately broke the system, creating huge new costs without benefits. And it doesn’t seem to know how to fix it, or want to.
For example, the auditor finds that the province is paying twice as much for wind power as American utilities, three and a half times as much for solar power and, in the most exceptional incident of economic illogic, has a biomass plant in Thunder Bay producing electricity at 25 times the average price in the rest of the province.
No, this isn’t a $16 glass of orange juice. It’s you and your family buying 85 of those $16 orange juices, this year and next year and every year after, forever. Enjoy. You’re paying for it.Report Typo/Error
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