Ontario Premier Doug Ford loves to claim he keeps his promises all while spending like a drunken sailor. He has spent $8.2 billion a year in tax cuts, $7 billion a year hydro subsidies, $2.2 billion a year in gas tax and elimination of license plate fees and now up to a billion on getting beer into convenience stores and spending millions more on government advertising.
Forgoing all that revenue is causing problems for the Ford government. Ford is now making more cuts to public services everywhere he can to deal with this shortfall. For example, his recent cutting of waste water testing for disease is emblematic of the Ford government’s penny wise and dollar foolish attitude. Cutting wastewater testing puts people’s lives at risk and is in fact deliberately negligent.
In the run up to the 2018 provincial election there was a huge outcry over the cost of electricity. In that election Ford promised to lower hydro rates by 12 per cent. Ford has not lowered electricity rates by even one per cent. What he has done is successfully hide and protect the reasons for high hydro rates with a massive subsidy. Since first being elected Ford has spent up to $7 billion a year hiding and protecting former Conservative Premier Mike Harris’s hydro deregulation scheme which is the cause of ever-increasing high hydro rates.
In 2022 the Financial Accountability Office (FAO) reported that over the next 20 years Ford plans to spend $118 billion subsidizing hydro rates and would not be able to. The 2023 FAO report shows that by the next provincial election in 2026, Ford will have spent $56 billion artificially lowering artificially high hydro rates, never dealing with the problem.
Why would you care about electricity rates? You hit the switch and it’s on. This is the issue no party wants to talk about.
This is the issue that affects everyone including business. Business loves low cost, stability and predictability. For 94 years business in Ontario thrived and was very profitable under the low, stable and predictable rates of public power. Ever since the deregulated electricity market was opened 22 years ago, hydro rates have been unstable, unpredictable and very high for everyone and a very big contributor to the affordability crisis.
When bringing in deregulation Harris endlessly promised “lower rates” and that “nothing will go wrong,” by 2007 rates doubled. By 2010 rates tripled and by the time Ford was elected in 2018 rates had quadrupled. Like Ford’s social circle Mike Harris went fishing in the Northwest territories with Kenneth Lay, Chairman of Enron. Then despite spectacular Enron market failures in California and around the world, Harris had Enron and a who’s who of the banking and investment community designed Ontario’s electricity market.
Small business and manufacturing have been very hard hit by hydro deregulation rates. For example, for car parts manufacturers, the cost of production is 30 to 50 per cent electricity costs. High and spiking hydro rates are also adding to the affordability crisis affecting the cost of everything we do. Ski lifts, curling and hockey rinks, community centers, municipalities, universities, schools and hospitals have all struggled under the burden of high hydro rates.
It is important to note that since the deregulated electricity market opened in June of 2002 every single government has brought in electricity rate subsidies.
It is also important to note that Alberta is doing the exact same subsidy program with its Enron designed electricity market. Obviously, there is a fundamental problem with electricity markets. They are notoriously easy to manipulate. It is hard to believe we still have an electricity market that was designed by Enron, guilty of the biggest corporate fraud in history. Hiding debt is what Enron used to do and this is exactly what Ford is doing with his electricity subsidy, hiding the artificial market rate under the provincial budget as just a regular cost item.
Bringing in a deregulated electricity market was a big mistake. Changing all municipal hydros from non- profit commissions to for- profit corporations was an equally big mistake. Hydro deregulation is working very well for the private investors who designed it. But not for the rest of us.
Electricity is very much like water, a necessity of life. You cannot live without it.
Here is why you need to be concerned and vote accordingly.
Politicians must stop throwing billions of good money after bad. That money needs to be spent dealing with the climate crisis. Electricity is central to the climate crisis and will be a problem until a political party develops the courage to deal with it.
The phony electricity market must be closed and rates must be regulated. Many countries around the world are bringing in publicly owned conservation and green power companies. We need to look at public power once again.Until that happens. It is a great business to be in! Profits are guaranteed by the government and taxpayers get the bill.
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