We live in unprecedented times. A crisis in affordability, in every level of health care and education, housing, rent, homelessness, record food bank use and transit, all topped off by the climate crisis. The fact is most of these problems, particularly healthcare, have been deliberately caused by funding cuts.
According to the Financial Accountability Office (FAO), since Ontario Premier Doug Ford was first elected, he has spent up to $6.9 billion annually to artificially lower, artificially high hydro rates. As reported by the FAO, Ford is going to spend another $6.8 billion this year and up to $7.1 billion next year and by the end of next year that total will be more than $47 billion hiding and protecting former Premier Mike Harris’s hydro deregulation scheme.
Ford has not kept his promise to lower rates 12 per cent by even one percent.
How did we get here?
A brief history. In 1905, the forward-looking Conservative Government of James Whitney, and Adam Beck brought in publicly owned at-cost non- profit power. Rates dropped by 50 per cent. That same Conservative government also put into law that if any government ever wanted to sell a public asset such as hydro, they must first hold a binding public referendum. The decades pass and hydro becomes very much like water, a necessity you cannot live without. Public power with its low and stable rates was a big competitive advantage for business and for 94 years Ontario prospered.
Then in 1995 came the Mike Harris government. Not one word about hydro deregulation was ever mentioned in the 1995 provincial campaign.
Then with absolutely no mandate, the Harris Government eliminated your publicly owned hydro-electric system. Here is how they did it.
The first Bill that the government passed was Bill 26 the “Savings and Restructuring Act.” It was a massive bill, amending dozens of existing laws, granting arbitrary new powers to cabinet ministers. This fundamentally weakened democracy in Ontario by allowing the government to make changes by decree with no public consultation.
Inside this bill, the law requiring a public referendum anytime a public asset was to be changed or sold, was removed. That had been the law since those early days. Twenty-eight years later, this bill is still damaging democracy in Ontario.
Declaring Ontario Hydro was bankrupt because of so much debt, they said that hydro had to be deregulated. Hydro was in debt but by far the majority of that debt was nuclear debt showing just how expensive it is to build and run nuclear power.
One thing the Harris Government forgot to mention, the final Ontario Hydro financial report March 1999, showed that $1 billion of Hydro’s debt had been paid down and was on track to be paid off in 20 years, showing how false Harris’s claim of bankruptcy was. At the time critics said, “wouldn’t we all like to have a 20-year mortgage on our home because then you have an asset that serves you well!”
Then in 1998 Harris passed three bills
The Energy Competition Act, The Electricity Act and The Ontario Energy
Board Act. These three pieces of legislation were really just one very elaborate piece of legislation broken into three pieces for easy passage in the legislature.
These bills changed every hydro utility in the province from a non-profit commission into for-profit corporations and the creation of the electricity market, all the while promising “lower rates” in a year long ad campaign.
At the time critics stated: electricity is very much like water, a necessity you cannot live without. How do you have a market for something you can’t store or stockpile? How do you get lower rates when you are adding in profits to generators, profits to distributors, profits to investors and commissions to commodities brokers?
The voting record shows every Liberal voted for all three. The NDP voted against all three.
This legislation also further eroded democracy by giving the government the power to make decisions on hydro by decree. The Harris Government forgot to include the legal right to sell and privatize hydro.
In 2002 After a province wide campaign and court case that proved the government did not have the legal right to sell hydro, the Conservatives marched right back into the legislature and passed Bill 58, misnamed, “The Reliable Energy and Consumer Protection Act,” giving themselves the legal right to sell hydro.
Ford is not the first to socialize with the rich and powerful. Mike Harris went fishing in the Northwest territories with Kenneth Lay, Chairman of ENRON. Then despite spectacular Enron market failures in California, Montana, India and elsewhere, 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.
Despite the promise of lower rates, by 2007 rates doubled. By 2010 rates tripled and by the time Ford first came to power in 2018 rates had quadrupled.
Ford’s $47 billion on subsidies, would have gone a long way to solving today’s many problems now in crisis particularly healthcare.
The deregulated electricity market works very well for the private investors who designed it, but not for us.
Ford is again protecting the greed and power of the electricity market every year, keeping us in the ridiculous situation where artificially high hydro rates are artificially lowered with multibillion dollar subsidies ensuring private producers and for-profit operators get their profits and taxpayers get the bill, never dealing with the cause of high hydro rates.
How much longer is this situation going to go on so that people and businesses don’t freak out by having to pay the inflated artificial market price of electricity? This phony market must be closed and rates must be regulated. Much of Harris’s hydro deregulation must also be dumped, because electricity is so central to the climate crisis.
No matter who defeats Ford, like it or not they will have to clean up and fix this 26-year-old mess.
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Nick Seebruch, editor
