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Ontario Liberals' Desperate Hydro Subsidy Is Going To Cost You Big Time

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The Liberal Party's hydro subsidy smacks of desperation. It's bad policy, and playing politics over rising electricity prices is going to be expensive.

Just like with the gas plant scandal, the Liberals are putting their political self-interest ahead of good public policy. They are trying to buy your vote with your money. It is going to cost us big time -- over $1 billion a year to be exact.

This subsidy will do nothing to solve the reasons why electricity rates are rising. It won't help you save money.

It is a slap in the face of people who are trying to do the right thing by making ends meet while reducing their energy use.

What it will do is take money from one pocket and put it in the other. The eight per cent subsidy on your bill is being paid for with funds from the Ontario treasury. The same treasury you pay your taxes into. So, you pay either way -- on your tax bill or your hydro bill.

I'm sure you can think of many ways a billion dollars could be spent on improving public services, whether it's health care, education, job creation, or reducing poverty. We could even use some to reduce Ontario's sky high debt.

Instead, the Liberals offer a perverse subsidy. It undermines conservation programs and primarily benefits the rich -- people with big houses who use more energy. The more electricity you use the more you benefit. It is a slap in the face of people who are trying to do the right thing by making ends meet while reducing their energy use.

Instead of expensive political games, the Liberals should try honesty and invest in real solutions that provide long-term relief.

One reason prices are going up is that Ontario is producing more electricity than we need and then selling it at a loss. We all pay for this in what is called the Global Adjustment (GA).
According to the Ontario Energy Board, 42 per cent of the cost increase in the GA is from money spent on nuclear, 26 per cent on natural gas generation, and 17 per cent on renewables such as hydro, wind and solar.

There is a better way. Here's a plan to meet our energy needs without adding billions to our provincial debt.

First, halt all mega projects to spend money on more generation that we don't need. Why spend billions to rebuild outdated nuclear plants when we already produce more electricity than we use? No nuclear project in Ontario's history has delivered on time or budget.

Second, stop the fire sale of Hydro One. Numerous experts, including Ontario's Financial Accountability Officer, have shown that selling Hydro One is a money loser for Ontario. It could also lead to bad policy outcomes. Why would a privatized Hydro One want to help people save money by saving energy when it is more profitable for the company to maximize the amount of electricity flowing through its power lines?

Ontario needs honest solutions, not self-interested political pandering.

Third, help people save money by saving electricity, instead of rewarding them for using more. Canceling the rebuilding of nuclear plants would save billions that the government could invest in making your home or business more efficient. This would help you save money today, tomorrow and well into the future by reducing your energy use.

Reducing demand also means we won't need as much new generation. Whatever the source -- wind, solar, natural gas or nuclear -- new generation is expensive to build. Combined with responsible price relief by lowering the off peak price for electricity, we can save money by avoiding spending big bucks on peak load generation.

Fourth, we can import low-cost water power from Quebec if electricity demand exceeds supply. Quebec enjoys some of the lowest electricity prices in the world because of their abundant hydro resources. Much of the extra electricity is sold to the US at prices 1/3 the cost of rebuilt nuclear plants. Quebec and Ontario make good electricity partners since Quebec's peak demand is in winter and Ontario's is in summer. This solution is far less expensive than rebuilding nuclear plants.

Ontario needs honest solutions, not self-interested political pandering. The Liberal plan to throw your money at their problem won't fix this mess. Powerful insiders want to preserve the status quo, wining and dining politicians who preserve it.

But the people of Ontario should come first. And they deserve real solutions that work long term.

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