Ontario Nearly Doubles Household Electricity Rebates Amid Rising Hydro Prices
The price of electricity in Ontario has increased by nearly 30%, but most residents may not have felt the impact directly. This is because the Ontario Electricity Rebate has been nearly doubled, now covering almost a quarter of consumers' power costs.
Although residential hydro bills remain mostly unchanged, this expanded rebate is expected to add around $2 billion annually to taxpayer expenses. This is in addition to the $6.5 billion the province already spends yearly to lower electricity costs.
Consequently, power subsidies have become the largest contributor to Ontario’s projected $14.6 billion provincial deficit this year.
“That’s money coming out of the provincial budget, which otherwise would have gone to deficit reduction, schools and hospitals, and instead is going to effectively socialize the cost of these increases in electricity costs,” said Mark Winfield, a political science professor at York University, who studies electricity policy.
“The political cost of making people pay for these increases would be unacceptable,” he added, highlighting that hydro prices were a key issue in Ford’s 2018 election campaign. “So, instead, they hide these costs.”
Author’s summary: Ontario’s near doubling of electricity rebates shields consumers from price hikes but significantly raises taxpayer burden, deepening the provincial fiscal deficit.