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Ontario hydro rates now the highest in North America

(August 23, 2016) Last week I attended the Association of Ontario Municipalities (AMO) conference in Windsor.


This conference takes place each year and draws municipal officials from across the province.


The event is a chance to attend informative seminars, network, and learn about the issues and challenges facing communities in Ontario.


I always enjoy attending the conference as it's a chance to have some insightful, one-on-one discussions with various mayors, councillors and municipal staff.


While I heard about a lot of challenges facing our communities, one matter that came up time and again was the high cost of electricity.


Just like you and I, municipalities are struggling with the rising cost of hydro.


Unfortunately, Premier Kathleen Wynne and her Liberal government show no sign of wanting to tackle this problem.


But I can assure you, this issue isn't going away.


Only the other day, Ontario earned the dubious distinction of having the highest hydro rates in North America.


Thanks to 13 years of Liberal scandal, mismanagement and waste, Ontario officially pays the highest residential electricity rates in North America – surpassing tiny Hawaii.


Since the Liberal government first took office, average households are paying an additional $1,000 a year on their electricity bills.


And sadly, some families are being forced to choose between eating and heating their homes.
Others can no longer afford to run their air conditioning in this summer heat.


This news is in addition to Ontario having the highest industrial rates in North America, further increasing the costs of doing business here, and driving jobs out of the province.


Bank of Montreal chief economist Doug Porter talked about the impact of rising energy prices in a recent interview with Global News.


"It hurts small businesses, it hurts large businesses," he said. "And it reduces their willingness to invest here in the province if one of their core costs is higher than in other nearby regions."


Porter cautioned there will be serious harm to the province's economy if double-digit electricity rate increases continue.


Ross McKitrick, Professor of Economics at the University of Guelph, in a recent guest column to the National Post, wrote about the high cost of electricity in Ontario.


His column carried the headline: Ontario electricity has never been cheaper, but bills have never been higher.


"You may be surprised to learn that electricity is now cheaper to generate in Ontario than it has been for decades," he wrote. "The wholesale price, called the Hourly Ontario Electricity Price or HOEP, used to bounce between five and eight cents per kilowatt hour (kWh), but over the last decade...it has trended down to below three cents, and on a typical day is now as low as two cents per kWh."


McKitrick noted this sounds like great news. But, he added, there is one exception.


"A hidden tax on Ontario's electricity has pushed the actual purchase price in the opposite direction, to the highest it's ever been. The tax, called the Global Adjustment (GA), is levied on electricity purchases to cover a massive provincial slush fund for green energy, conservation programs, nuclear plant repairs and other central planning boondoggles. As these spending commitments soar, so does the GA."


McKitrick aptly writes that thanks to how the Liberals have structured the electricity system, "costs will keep rising."


He adds the Liberals like to defend their energy policy by saying they did it for the children.


"These are the same children who are now watching their parents struggle with unaffordable utility bills. And who in a few years will enter the workforce and discover how hard it has become to get full-time jobs amid a shrinking industrial job market."


PC Leader Patrick Brown touched on this last week at the conference in Windsor, when rising electricity costs were being discussed.


"No matter how open you are to business, no matter how aggressive the economic development is of a city or a town, if you have energy prices that are not competitive it puts you at a disadvantage," he said.


For the people of Ontario, it's clear: life is harder under the Wynne Liberals.

Jim Wilson is the Progressive Conservative MPP for Simcoe-Grey.


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