Budget watchdog to examine hydro relief plan
Ontario’s Conservatives are questioning the math of Wynne’s governing Liberals
TORONTO — Ontario’s budget watchdog is planning a report examining the Liberal government’s plan to lower hydro bills.
Progressive Conservative Leader Patrick Brown has written to the financial accountability office, asking them to investigate the plan with a full costing analysis.
A spokesperson for the office says they will take Brown’s letter under consideration, but they had already been planning to examine the hydro plan.
The recently announced 17 per cent reduction in hydro bills comes this summer thanks to a move the Liberals say is like refinancing a mortgage over a longer period of time.
Premier Kathleen Wynne has acknowledged it will cost ratepayers more in the long run, but she says savings are needed now because people are struggling.
She has said the extra interest costs related to the plan would amount to $25 billion over 30 years, but the Tories say they’re not clear on how the Liberals arrived at that number.
Wynne’s $25-billion figure does not appear in the hydro relief announcement’s background documents, which say the plan will involve “annual interest costs not exceeding $1.4 billion.”
The premier said Monday the financial accountability officer has already been briefed on the hydro plan, but the government can bring more technical information forward, if need be. “We have used assumptions about interest over the next number of years, the next decade, and those are fairly conservative projections, so we’ve been very careful as we’ve laid out the plan,” she said.
A spokesperson for the energy minister said that, based on a “conservative” estimate of a five per cent interest rate, they “see that number amounting to approximately $25 billion over 30 years.”
Progressive Conservative Leader Patrick Brown said in the letter to the financial accountability officer Ontarians may ultimately have to accept those added costs to get savings now “given the extent to which people are struggling,” but the impact should be clear.
“To be candid, this government has a habit of deliberately using false numbers to cover up their worst policy failures,” Brown wrote.
A spokesperson for Energy Minister Glenn Thibeault said Ontario has a track record of managing debt “responsibly.” The province’s net debt is more than $300 billion.
The 17 per cent cut in bills — in addition to an eight per cent rebate that took effect Jan. 1 — means ratepayers will pay about $2.5 billion less per year of the global adjustment charge for the next 10 years, the government has said.
The global adjustment is the charge consumers pay for above-market rates for power producers, which the government says ensures a reliable supply. The auditor general has estimated the global adjustment charge cost $50 billion between 2006 and ’15 and increased by 1,200 per cent between 2006 and ’13 — meanwhile, the average electricity market price dropped by 46 per cent.