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margaret wente

Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.

The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn't the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario. The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the "clean energy benefit." There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.

"Your power bill is out of control, and the provincial government doesn't go a day without making it worse," Mr. Adams says.

Not long ago Ontario's energy prices were in the middle of the pack. Today they are sky-high. Much of the problem is policy-induced – a result of the governing Liberals' costly green schemes, runaway benefits and pension costs for hydro workers, and political shenanigans dating back to the misty dawn of time. The government pretends that conservation can save you money if only you use your "smart meter" and switch to off-peak power. Good luck with that. Eight years ago, the price of off-peak power was about 3 cents per kilowatt-hour. Today it's 8.3 cents.

Now the desperately cash-strapped government is selling off a big chunk of Hydro One to raise money. The shares go on sale this week, and eventually the sale could fetch as much as $9-billion. The Liberals plan to use the proceeds to pay down debt and invest in infrastructure, mainly public transit.

This may sound like a fine idea, but some folks aren't so sure. They say it's like selling your prize cow. The one-time windfall is awfully handy, but you're going to miss the money you made from all that milk. And Hydro One – the mighty transmission and distribution utility – produces about $750-million a year for the province. That's an awful lot of milk.

Awkwardly, the biggest critic of the Hydro One sale is Stephen LeClair, the government's new independent budget watchdog. He says the sale will make Ontario's problems worse. "The province's fiscal position will deteriorate," he warns.

The Liberals say the watchdog doesn't understand the math. Mr. LeClair says they refused to show him the math. You can see why. The government's math is based on a leap of faith and a pile of wishful thinking. Premier Kathleen Wynne assures us that these infrastructure investments will pay off by making the province more competitive. Which would be great, if true. But that's the part you have to take on faith. Meanwhile, cynics think the main purpose of the sale is to fluff up the province's books before the next election.

Why should the rest of Canada care about Ontario's energy mess? Because our soaring power costs have made us less competitive than ever, and what's bad for us is bad for you, too. And because we are an object lesson in how political interference can screw up energy policy.

If Ms. Wynne really wanted to do something about competitiveness, she would move mountains to keep energy prices in line. Instead, she's driving small and medium-sized businesses nuts with soaring rates, and with a complicated pricing system that nobody can understand. Energy pricing in Ontario is a black box – a fact I am reminded of every time I open my electricity bill.

It will get worse before it gets better. To combat the presumed ravages of climate change, the government has embraced cap and trade, which will involve even bigger and blacker boxes as carbon emissions credits are allocated by the government. Only two things we know for sure. The lobbyists are dizzy with excitement. And the extra costs will inevitably be borne by you and me.

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