Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday May 25, 2017
Hydro rate-cut will ultimately cost $21B, watchdog warns
Short-term gain on your hydro bill could translate into long-term fiscal pain.
The Liberal government’s “Fair Hydro Plan,” which lowers electricity bills by 25 per cent, will ultimately zap Ontarians to the tune of $21 billion over the next three decades, the province’s budget watchdog has found.
In a 15-page report released Wednesday, Financial Accountability Officer Stephen LeClair said the scheme will cost the province $45 billion over the next 29 years while saving ratepayers $24 billion for a $21-billion net expense.
But LeClair warned his estimates are only applicable if “the province is able to achieve and maintain a balanced budget over 29 years.” The cost of the subsidy could balloon to between $69 billion and $93 billion if the government has to borrow to pay for it.
Finance Minister Charles Sousa balanced the books last month after nine years of deficits.
The average monthly hydro bill of $156 per household will drop to $123 once the 25-per-cent cut takes effect next month.
Recent public opinion polls suggest the Premier Kathleen Wynne’s Liberals appear to be benefiting from the forthcoming lower electricity prices, as two recent surveys show they are closing the gap with the front-running Progressive Conservatives.
Both the Tories and Andrea Horwath’s New Democrats oppose the Liberals’ rate-cutting measure. (Source: Toronto Star)