Liberals’ hydro rebate criticized for doing little to stem cost of electricity

The Progressive Conservatives said the Liberals’ own long-term energy plan warns of higher prices as more investments are made to modernize the system.

TheStar.com
Sept. 13, 2016
By Rob Ferguson

The Liberal government’s promised tax rebate on hydro bills came under scrutiny Tuesday as critics said it does nothing to fix the causes of rising electricity prices and questioned how long it will remain in place.

Calling the 8 per cent break a “billion-dollar Band-Aid” for its annual cost to taxpayers, the Progressive Conservatives said the government’s own long-term energy plan warns of higher prices as more investments are made to modernize the system.

“Let’s be clear - hydro rates are not going down,” PC leader Patrick Brown said as MPPs held their first question period in the legislature to kick off the new session.

The first piece of legislation the Liberals reintroduced was the campaign finance reform bill, but it does not include new proposals - to be added later - that would prevent all MPPs and candidates from attending fundraising events.

“We’re changing the way politics is done,” said Government House leader Yasir Naqvi.

On the electricity file, NDP Leader Andrea Horwath said rebates “come and go at a whim” under the Liberals, given that the government just nine months ago scrapped the Ontario Clean Energy Benefit that gave ratepayers 10 per cent off their hydro bills.

Premier Kathleen Wynne pledged in Monday’s throne speech to rebate the 8 per cent provincial portion of the HST from hydro bills starting in January, acknowledging that costs are hurting consumers.

“There was more that needed to be done,” she told reporters Tuesday as debate began on the speech outlining her priorities for the second half of her term. “We’ve been listening to people.”

Wynne noted there is already a program in place to help low-income Ontarians with hydro bills, which no longer carry a debt retirement charge for costs left over when the old Ontario Hydro was broken up.

Both opposition parties said Ontario makes more electricity than it needs, yet continues to sign new contracts for renewable power.

With Liberal fortunes lagging and the next provincial election due in 20 months, Wynne denied a political motive in the break on hydro bills for homes, small businesses and farms once legislation is passed this fall.

But if the government is serious about keeping the provincial tax off hydro bills, it should negotiate with the federal government to have electricity exempted from the HST permanently, Horwath said.

Finance Minister Charles Sousa said the Liberals opted for the rebate because it can be implemented sooner and said “we haven’t established a date to end” the tax break.

The $1-billion annual cost of the hydro relief will be covered by revenues from increased growth in the economy, Sousa insisted.

However, Conservative MPP Vic Fedeli pointed out that Ontario’s financial accountability officer stated in a recent report that the province - which the Liberals say will return to a balanced budget next year - appears headed back into deficit after the 2018 election.

While the hydro tax rebate will appear as a line item on monthly utility bills for consumers to see, the Conservatives also raised concerns that new carbon taxes of about $5 monthly on natural gas won’t be listed on those bills.

“Frankly, that’s not acceptable,” said MPP Lisa Thompson.

The carbon fee, which the independent Ontario Energy Board ruled does not have to be mentioned on bills, is part of the government’s $8.3-billion plan to fight climate change ,which includes a cash-for-clunkers program to get old cars off the road and incentives for Ontarians to make their homes more energy efficient.