What is the reason hydro rates went so high? Why did provincial governments opt to subsidize the problem instead of dealing with the root cause? This is the budget item no one not even the NDP wants to talk about.
In the 2022 Financial Accountability Office (FAO) reported that over the next 20 years Premier Doug Ford plans to spend $118 billion subsidizing hydro rates and would not be able to keep his election promise to lower hydro rates by 12 per cent. The 2023 FAO report shows that by the next provincial election in 2026 Ford will have spent $54 billion artificially lowering artificially high hydro rates.
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. Harris 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 design Ontario’s electricity market. This is the main cause behind today’s artificially high hydro rates.
Small business and manufacturing have been very hard hit by hydro deregulation rates. For example, car parts manufacturers who employ 50 to 200 people 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 are all struggling 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 including those of Eve’s, McGuinty, Wynne and now Ford 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 Enron 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
In 2018 many were complaining about high hydro rates. No one is complaining about hydro rates anymore.
Ford has successfully hidden and protected Harris’s deregulated electricity market scheme that never delivered on the promise of “lower rates.”
Ford has not kept his 2018 promise to lower rates 12 per cent or by even one percent.
Harris also eliminated the law requiring a binding public referendum anytime a public asset was to be changed or sold.
The deregulated electricity market is working very well for the private investors who designed it. But not for us.
Electricity is very much like water, a necessity of life. You cannot live without it.The legislature must deal with the problem instead of throwing billions of good money after bad because Electricity is so central to both the climate and affordability crisis. This phony electricity market must be closed and rates must be regulated. Until that happens. It is a great business to be in! Profits are guaranteed by Ford and taxpayers get the bill.
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