Ontario’s New Price Control Legislation Will Fail Miserably
Ontario’s provincial government announced new legislation that will impose price controls on power costs for the next 10 years.
This is welcome relief for the average Ontarian, who’s seen their electricity bills skyrocket under liberal governments.
In fact, the cost of power has risen 4 times the rate of inflation since 2006, and it’s doubled in the last decade alone.
But unfortunately for Ontarian consumers, this is just a temporary solution that’s doomed to backfire.
It doesn’t make power cheaper, it just shuffles the costs around.
The proposed legislation lowers time-of-use rates, subsidizes costs for low-income households, and creates new social programs to help people cope with high power bills.
How would social programs help make power cheaper? I don’t know, and neither does Ontario’s government (although I’m sure they pretend to).
But it doesn’t really matter. What matters is: who’s paying for these subsidies?
You guessed it. Taxpayers.
The new legislation sets up a new government body, overseen by Ontario Power Generation, which will pay for the subsidies by acquiring debt, backed by the provincial government.
And after 10 years, power costs will again skyrocket.
But it’ll be worse the second time around: the legislation establishes that after 10 years the price of power will not only need to cover the costs of generation and distribution, but will also have to pay down the debt acquired over the previous 10 years—estimated at $28 billion in subsidies.
You heard that right.
Ontario is literally borrowing money from taxpayers, to lend back to taxpayers, at interest.
This is gross incompetence.
What’s worse is that 20 years ago Ontario had some of the cheapest power in all of North America—which was a boon to the province’s large industrial base.
Ontario’s incompetent government decided to switch the grid from coal, nuclear, and hydroelectric, to one based on wind and solar—they exchanged the cheapest possible forms of energy for the most expensive.
Of course, the transition isn’t even close to complete, and already the costs are unbearable for ordinary Canadians.