Ontario Hydro Rates Surge 29% as Ford’s Rebate Masks Crisis

High electricity rates are causing significant concern in Ontario, with recent changes revealing a troubling trend. As of November 1, the Ontario Energy Board announced a staggering 29 percent increase in hydro rates. This rise comes despite Premier Doug Ford‘s earlier promise to reduce rates by 12 percent during the 2018 election campaign. Instead of lowering costs, the government’s approach has obscured the real issues plaguing the electricity market.

According to the Financial Accountability Office, the Ford administration has been spending up to $7 billion annually on hydro subsidies. This funding is intended to mask the impact of the deregulated electricity market established by former Premier Mike Harris. These subsidies have contributed to a system where the true cost of electricity is hidden from consumers.

On November 1, the Ontario Energy Board’s rate adjustments encompassed off-peak, mid-peak, and on-peak rates, resulting in an average increase of 28.947 percent. This surge occurs during a period of heightened financial strain for many residents, exacerbated by challenges in healthcare and education due to underfunding.

Furthermore, Ford’s administration has increased the Ontario Electricity Rebate from 13.1 percent to 23.5 percent. This move is seen as an attempt to obscure the substantial rate hikes, funded by taxpayer dollars that could otherwise be allocated to critical areas such as healthcare and education.

To understand the current crisis, it is essential to reflect on the history of Ontario’s electricity market. In the 1990s, the now-infamous Enron company promoted the concept of a deregulated electricity market. Reports indicate that Mike Harris collaborated with Kenneth Lay, Enron’s chairman, during a fishing trip in the Northwest Territories. Enron later became embroiled in one of the largest corporate fraud scandals in history, illustrating the risks associated with deregulated markets.

In 1998, Harris pushed through legislation that transformed non-profit hydro commissions into for-profit entities. The transition led to soaring rates, with electricity costs doubling by 2007 and tripling by 2010. As a result, by the time of Ford’s election in 2018, rates had quadrupled, making the current situation even more dire.

Ford’s recent attempts to address the crisis include offering ratepayers a choice between “time of use” and “tiered” payments. However, analyses suggest that these options do not provide any meaningful savings, effectively resulting in similar overall costs for consumers. The government’s focus on more for-profit nuclear and gas plants only heightens concerns about future rate increases and exacerbates the ongoing climate crisis.

The question now is where the opposition to these escalating rates and the government’s financial maneuvers resides. Critics argue that billions currently allocated to subsidies should be redirected toward essential services such as healthcare and education. The long-term implications of a deregulated electricity market are becoming increasingly apparent, as history shows that such systems are prone to manipulation and crises, as seen in California and other regions.

Ultimately, there is a growing consensus that the current approach to electricity pricing in Ontario is unsustainable. Many advocate for a return to regulated rates and a shift towards public green power, mirroring strategies implemented in Europe and Australia. The calls for reform underscore the urgency of addressing the financial burden placed on Ontario residents and ensuring a reliable and equitable energy future.