Ford’s hydro subsidy is counterproductive
Doug Ford’s Tories are spending more money than ever before in Ontario history.
So why isn’t there ever enough money to invest in health care and education?
Answer: The Ford government spends billions upon billions of dollars on an indefensibly wasteful, vote-buying subsidy for your monthly electricity bill.
You can look it up in last month’s budget: $7.3 billion annually to make your hydro bill magically shrink.
Such a massive appropriation amounts to misappropriation. It would be scandalous if it weren’t so seductive.
It’s a sieve, but we’re all in on it. And we’re all cashing in on it.
My monthly bill from Toronto Hydro includes an indelible line announcing a gift from the premier to me personally: “Ontario Electricity Rebate.”
This month, there’s a $23.31 credit on that line, which reduces my total bill to $113.16 (after tax). Sweet. But bittersweet.
It’s an incentive for consumption that is counterproductive. The more electricity you burn, the more money you get back from the government as your reward for wasting energy.
Living the good life in a monster home? You’ve won the subsidy lottery from the Ontario government, month after month, no matter how wealthy and wasteful you are.
I never asked for this gift that keeps on giving. But many other Ontarians — and the politicians who wanted their votes — insisted on it.
Remember “heat or eat?” The opposition made a meal of that hydro hyperbole.
In Kathleen Wynne’s waning days as premier, with public opinion turning against a dying Liberal dynasty, the clamour for relief from rising electricity bills forced her hand to launch a multibillion-dollar rebate. In opposition, the Progressive Conservatives and New Democrats rode the wave of indignation until the government of the day acquiesced.
In fact, electricity rates weren’t especially high in Ontario compared to most other jurisdictions across North America — apart from those provinces blessed with abundant renewables we can’t compete with. But the perception of oppression could not be dialed down, the polarization of our politics could not be reversed, and the governing Liberals could not avoid the path of least resistance on electricity.
Voters took the money, but not the bait. In the 2018 election, Wynne’s Liberals were still humiliated and Ford’s Tories rode to power on the strength of that hydro hysteria — until people forgot about it.
But the subsidy will not be our salvation. It is an illusion within a delusion, for it is utterly unaffordable.
Two years ago, “Electricity CostRelief Programs” amounted to a $5.8 billion budgetary expenditure. In the current fiscal year, that subsidy has jumped to $7.3 billion — an increase of 25 per cent in two years and climbing.
If we had the political courage and cognition to stop subsidizing consumption, and start rewarding conservation, what could we do with that money?
We’ll spend more money reducing hydro bills this year than we do on the entire Ministry of Transportation ($7.1 billion).
We’ll spend roughly the same amount on electricity credits than we allocated last year to long-term care ($7.75 billion).
At a time when the government is slowly starving our post-secondary system — funding will be reduced from $12.6 billion to $12.2 billion next year — imagine the impact of transferring that $7.3-billion hydro subsidy to the 47 public colleges and universities across Ontario, many of which are now in deficit.
Finance Minister Peter Bethlenfalvy, who styles himself a prudent steward of Ontario’s treasury, likes to talk about the wastefulness of interest payments on the rising provincial debt he inherited. And yet the annual hydro subsidy amounts to roughly half of the $14 billion he allocates for interest on our total debt of $439 billion.
In the six years since Ford took power, the price of power will have added a cumulative $41.2 billion to Ontario’s budgetary bill.
Why are we forcing taxpayers to subsidize ratepayers? Why are we rewarding consumption and penalizing conservation?
Because politicians think voters will buy what they’re selling — and subsidizing.
Except it didn’t work for Wynne. It won’t save Ford when his time is up. And it won’t help the rest of us when we ultimately have to pay up.
Yet the province has given up nearly $1 billion a year in foregone revenues for the licence plate giveaway. And it is throwing away another $1.2 billion annually by lowering the provincial gas tax.
Why do our politicians persist in subsidizing air conditioning, heating and driving? Why do voters and taxpayers willingly underwrite the uncontrolled energy habits of their neighbours?
Ask yourself that the next time your monthly bill arrives and you look up the line for your magical Ontario Electricity Rebate. It may look like a gift, but it’s grifting politicians regifting your money.