Another Broken Political Promise

Back in April 2018 Doug Ford, the then recently chosen leader of the Ontario PC Party promised “to cut hydro bills by 12 per cent if he wins Ontario’s spring election, saying it would be on top of a rate reduction from the governing Liberals, whose plan he has repeatedly criticized. The Progressive Conservative leader said Thursday that he would cut rates through a variety of measures that would save the average ratepayer $173 a year.”

So how has that promise turned out?                                                                             

A recent report from the C. D. Howe Institute titled; “Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006” reminded me of Premier Ford’s above promise. I decided to measure his promise against actual results from our personal Hydro One bills.

A quick calculation of our June 2018 bill indicated all-in costs on the Hydro One bill we received were 15.06 cents/per kWh (kilowatt hour) after being granted a rebate of the provincial portion (8%) of the HST and a further discount under the “Fair Hydro Plan”.  Collectively the two reductions represented 34.5% of what our bill would have been.  Without discount(s) costs would have been 22.6 cents/kWh!

Fast forward three years later to June 2021 and all-in costs were 14.99 cents/kWh or a drop of 0.07 cents not the 1.8 cents/kWh of the promised 12% reduction.  The strange thing about the latter bill however is on the actual calculations the amount deducted is referenced as the “Ontario Electricity Rebate” (OER) and if added to what we paid would have raised the price to 18 cents/kWh.  On page 1 of the bill however, there was a dollar amount cited (Total Ontario support) that was 3.5 times the amount of the OER and if added to what we were required to pay would have increased the costs to 25.5 cents/kWh or 12.8% more than the 22.6 cents/kWh of June 2018. 

What the foregoing suggests is the Ford government has done nothing to reduce the cost of electricity since elected and instead is simply burdening taxpayers at the rate of 10.6 cents/kWh (25.5 cents/kWh minus 14.9 cents/kWh) for electricity consumed by residential and (perhaps) other ratepayers.

In respect to the foregoing the C. D. Howe report contains the following about the taxpayer burden: “As system costs – particularly in energy generation – have continued to rise, the Ontario government has increasingly turned towards taxpayers to keep total bills down. The most recent estimates from the Ministry of Finance show the cost of subsides rising to a staggering $6.5 billion for the 2021/22 fiscal year – or nearly 3.5 percent of total government expenditures. To put this number in context, that same budget proposed to spend $5.8 billion in taxpayer dollars on long-term care.“

Premier Ford left Greg Richford in the portfolio for three years and this suggests he accomplished nothing other than burdening taxpayers with debt! With the advent of Todd Smith as the new Minister of Energy, taxpayers and ratepayers should hope he will somehow start the process of fixing the mess.

The time has come for the Ford led Government to recognize that taxpayers and ratepayers are normally one and the same individual!

Author: parkergallantenergyperspectivesblog

Retired international banker.

3 thoughts on “Another Broken Political Promise”

  1. Thank you, Parker for your as always insightful and highly relevant analysis. The obvious question, of course, is why Doug Ford has betrayed his promises and his conservative constituency on a range of issues. Is it that he is intimidated by the media and the Toronto-based elite? Does he really think that Ontario residents do not understand what is really going on and therefore are prepared to accept bad governance? Is it that he is simply yet another political coward masquerading as a leader? He is running out of time to demonstrate his conservative credentials as well as his credibility. Otherwise he will surrender us all to the disaster of another Liberal, or even worse NDP, government.

    Liked by 1 person

    1. “Is it that he is intimidated by the media and the Toronto-based elite?”

      I’d say that’s at least part of the reason our all-in is at the ridiculous price of 26 cents per kWh. Another part is the legal booby traps the previous government planted to prevent its successor from reducing the money we all pay to the entitled green entrepreneurs.

      Because the current government has been so completely incompetent in its legal approach to this nonsense — devoting huge resources and time to a quixotic attack on the federal carbon tax — the predictable outcome has made it gun-shy.

      And because the elites are perfectly fine with 26 cents per kWh, there is and will be no blowback from them about failure to keep the promise of actually cutting rates. So it’s left to us angry old guys to complain about it, in the hope that sooner or later people will get fed up with the government-induced part of inflation.

      Liked by 1 person

  2. Would Doug Ford or whoever he got to answer questions about this broken promise, use the covid ‘state of emergency’ as an excuse? How did broad based lockdowns and the closing down and loss of so many businesses throughout the province affect his promise?

    Liked by 1 person

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