Randall Denley: The Liberals screwed up hydro in Ontario and now Doug Ford has to clean up the mess – National Post

The Ontario governments effort to eliminate its projected $9-billion deficit is a grim struggle that involves unpopular service changes, wage restraint and general penny-pinching. Imagine if there was one change that would cut that deficit nearly in half without raising taxes or taking away any services.

As it turns out, there is. Have you heard about the Ontario Electricity Rebate? Thats the one where the government subsidizes everyones power bills, so that we can all pretend that the cost of power is lower. The bill for this act of self-deception is expected to be $4 billion this year. Thats a heck of a way to spend money the government doesnt have.

The PC government did not invent what was called the Fair Hydro Plan, but it has taken what is probably the worst policy of the former Liberal government and given it a brand new name. Same stupid content, though.

The Liberals, after years of merrily committing to high-priced power deals, finally realized that the cost of electricity had gotten to a number far, far higher than the public was prepared to accept. The government reacted like it was holding a live wire. At first, if offered to eliminate the eight per cent sales tax on power bills. Then it cut 25 per cent from the cost of the bill.

In an attempt to keep all of this borrowing from appearing on the governments own books, it created a separate entity to stack up the debt. The Liberals had by that time developed advanced expertise in making billions of dollars disappear. The idea was that the debt would build up, but future power users would have to pay it all back with interest, later on. That boomerang effect would have made future power bills wildly unaffordable, but that would be a problem for another government.

When the PCs took over in 2018, they found themselves in a difficult spot. The Liberals fake power prices had become the new normal. Restoring sanity to power bills would have made the PCs the villains who drove power bills through the roof. If that wasnt problem enough, the PCs had railed against high power costs in opposition, campaigned on affordability and promised to cut power bills by an additional 12 per cent. Thats a promise the government has not yet kept and, one can only hope, never will.

So, the government now finds itself in the same position as a person standing on a land mine. As long as it doesnt make a move, everything will be fine.

The government has made a few modest improvements to the ridiculous power situation. Cancelling unneeded wind and solar contracts will help lower future costs a bit. As well, starting Nov. 1, power bills were amended to make the cost of electricity clearer.

The PCs have also scrapped the Liberals hocus-pocus accounting and moved the cost of the power subsidy onto the provinces books, a move recommended by the auditor-general. That makes the cost transparent and prevents the boomerang effect on future power users, but its not all good news. The electricity subsidy is now paid by taxpayers, instead. While there is obviously an enormous overlap between power users and taxpayers, this changes power bills from a consumption base to an income base. Higher income earners now pay for their own power and part of someone elses. Those in lower tax brackets can turn on the lights knowing that part of the cost will be subsidized by the person up the street.

Now, one could argue that there is value in turning power bills into a social program that protects lower-income people from high power rates. It would be an argument of modest merit, were it not for the fact that there already is such a scheme in place. The Ontario Electricity Support Program reduces bills by up to $75 a month for users with household income of less than $28,000. Some help is still available to households earning as much as $52,000. The support program, another brainstorm from the Kathleen Wynne era, costs $172 million a year.

The PCs didnt create this mess, but they own it now. The Doug Ford government could continue to spend billions of dollars to subsidize people who can easily afford to pay their power bills, or they could ask Ontarians if theyd rather see the money spent on preserving services. Thats an easy question to answer, but someone needs to ask it, soon.

Randall Denley is an Ottawa political commentator and former Ontario PC candidate. Contact him at randalldenley1@gmail.com

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Randall Denley: The Liberals screwed up hydro in Ontario and now Doug Ford has to clean up the mess - National Post