Starting January the government of Ontario is going to offer Ontarians a 10% reduction on their energy bills. It’s called the Ontario Clean Energy Benefit and Finance Minister Dwight Duncan unveiled it Thursday in his fall economic statement. Before you get too excited, Duncan also said that hydro prices will rise about 7.9% annually every year for about five years. Add on the HST at 8%. Don’t forget inflation. Subtract the Ontario Clean Energy Benefit and the average family can expect a 3.6% increase annually in hydro prices.
FYI, the government is paying for its Ontario Clean Energy Benefit (which will cost them $1.1 billion in the first year alone) by signing an untendered fifty year contract extension with Teranet, a company who provides electronic land registration and writs services. Until the contract expires in 2067, the government will receive $50 million in annual royalty payments from Teranet.
It is hard to tell whether the Ontario electorate, increasingly vocal and unhappy with rising hydro rates, will view this 10% price reduction as good news or not. The overall rate hike, which the government says is necessary in order to offset recent investments in modern and renewable energy, will be on top of this summer’s implementation of the harmonized sales tax, and then there’s the debt retirement charge and...
The more I listen to MPPs and Ministers debating Ontario’s energy policy, the more I listen to people I know complaining about rising prices, the more it makes me wonder how we got here. Has Ontario's energy policy always been this contentious? Has the parliamentary debate about energy always been this heated? The short answer is, yes.
Sean Conway is an expert on Ontario politics. He is currently a Canadian university professor and Fellow in the School of Policy Studies at Queen's University. Some of you may remember that not too long ago he was also a Liberal member of the Legislative Assembly of Ontario. He served as Opposition Energy Critic and as a cabinet minister in the government of David Peterson. His grandfather, Thomas Patrick Murray was an MPP for the Liberals from 1929 to 1945.
When I asked Conway about Ontario’s current energy policy debate he told me, “Price, supply, ownership, equity issues - we should not be surprised that energy policy is a prominent part of political discourse in Ontario. It’s been like that for over 100 years.”
Conway then told me all about Adam Beck, the early days of Ontario electricity generation and how it relates to the way Ontarians still think about electricity today.
From the early twentieth century until the 1950s hydro was the power of choice. Hydro was able to meet all the needs of Ontario’s growing population and economy, largely due to the fact that the province was uniquely blessed with having Niagara Falls situated right in its own backyard. Conservative MPP Adam Beck, also chairman of the Hydro-Electric Power Commission of Ontario, the world's first publicly-owned utility, saw the infinite power generating potential of the Falls and he believed Ontarians should have that power, it should be publicly owned, and it should be at cost. Harnessing the power of the Falls was the largest construction project in North America at the time. A hydroelectric plant was built, transmission lines put in place, and on October 11, 1910, Beck held a ceremony in Berlin (now Kitchener) to turn on the lights. He pressed a switch and the lights lit up. With a handful of exceptions, the lights have been there ready to be lit up twenty-four hours a day, seven days a week, whenever Ontario wants them. And, according to Conway, this idea that electricity should be cheap and unlimited, is still part of Ontario’s electricity generating philosophy to this day.
“My Grandfather debated energy policy in the Ontario Legislature. Should we be subsidizing development in the north or not? How much is it going to cost? Public or private? And then in the 1980’s it was the nuclear debate. That doesn’t mean that the issues of today aren’t any less sensitive or political.” He is right. Energy is hot right now and politicians from all parties know it.
Although he has been retired from Queen’s Park politics for seven years, Conway says he still has good friends both in the current Ontario government and in opposition. He says that when he talks to them that “they all have been noting that’s there’s been A LOT of interest in hydro bills from the public.”
I bet they have.
Also this week, Opposition Leader Tim Hudak and Finance Minister Dwight Duncan debate the debt retirement charge. In case you’re unaware of what exactly that is - on every hydro bill Ontarians receive there is a fee called the debt retirement charge. Go grab a hydro bill. Take a look. It’s there and it’s not small is it? But where exactly did it come from?
The Ontario Electricity Financial Corporation (OEFC) is an organization created by the former Progressive Conservative government and their 1998 Electricity Act. The OEFC’s mandate is in part to finance the debt and liabilities accrued on generation projects that were built as far back as the Peterson era. According to the OEFC’s official website (and some complicated math that involves “residual stranded debt” and “payments-in-lieu of taxes and electricity sector dedicated income”) there is still $7.8 billion owed for these past projects. It is up to Ontario energy consumers to pay that off.
The Liberals have been in power for seven years now and, according to Tim Hudak, that should be more than enough time for them to have paid off that $7.8 billion. Dwight Duncan disagrees. Whether or not the debt should or should not have been paid off by now is up for debate but what I find interesting is that their exchange sheds some light in part on our current energy predicament, partially, that we are paying for a system which was built but not paid for. We are paying now, literally, for past energy decisions.
Next up, the Ontario Electronic Stewardship. In case you’re not familiar, they are the industry funded organization responsible for diverting Ontario’s electronic waste from landfills (and responsible for last summer’s ill-fated eco fee). Their delayed annual performance report showed that they’ve missed their own diversion targets by as much as 59%. Opposition Environment Critic Toby Barrett says that Environment Minister John Wilkinson is not doing nearly enough to solve the problem.
Michael Prue, the NDP MPP for Beaches-East York, has brought forward a private member’s bill that would ban employers from helping themselves to their servers’ tips. Most people leave tips for good service. They also leave tips because they’re aware that their servers probably make minimum wage and those people need tips to get by. Prue says that the practice of restaurant owners making tax-free money off their employees’ tips should be stopped, and it can be, if the government would pass his bill.
Finally this week, it’s Bullying Awareness Week. The Liberals ask themselves about various measures being undertaken to stop bullying in Ontario schools.
Watch the show, this Sunday at 4:30 PM. You can also watch it online at tvo.org/civics101. Feel free to leave a comment or suggestion.
Queen’s Park This Week, is a half hour summary of Question Period that is assembled using clips from the Queen's Park legislative assembly proceedings. The program summarizes the primary issues and discussions that have occupied the provincial legislature over the course of the week, and allow Ontarians to obtain a kind of "executive summary" of the proceedings every week that the house is in session.