Agenda for Hudak’s New Gov’t Part 1: Kill “Ontario Clean Energy Benefit”

Parker Gallant recently observed that “Whatever mess existed in 2003 is billions of dollars worse today.” There is work to do.

The Ontario PC’s have promised to eliminate the deficit in two years and have laid out their plan for their first 100 days if they gain power.

In Fiscal 2014/15, the budget that brought down the Wynne government forecast that the cost of the Ontario Clean Energy Benefit in that year alone will add $1.1 billion (see p. 292 of the pdf version) to the deficit.

The Ontario Clean Energy Benefit transfers 10% of residential power bills to the provincial government. It was created as a strategy to buy votes at the expense of the deficit. It was announced in 2010, and implemented in time for McGuinty’s electoral run in 2011. Don Drummond and every other serious observer who has looked at it has recommended killing it.

While a 10% increase in residential bills is harsh medicine, it would follow in the footsteps of the then new Liberal government’s decision in its first months in office in 2003 to eliminate the Ernie Eves rate freeze that the PCs had introduced in 2002. The ensuing rate increase directly associated with cancelling the Eves rate freeze was grudgingly accepted by the public. The new government ought to reassure the public by coupling cancellation of the Ontario Clean Energy Benefit with reforms that will help get the underlying cost of power down. More on that later.