Ontarians to get a break on power bills

ONTARIO - The Liberal government will cut OntariansÂ’ hydro bills by 10 per cent starting on January 1.

Finance Minister Dwight Duncan, bolstered by a $1 billion reduction in the provincial deficit, announced “substantial hydro relief” in the fall economic statement.

With the average hydro bill in Ontario about $125 a month, a $12.50 monthly reduction would be worth $150 a year to ratepayers and cost the treasury about $1 billion annually.

The new “Ontario Clean Energy Benefit” will be clearly visible on hydro bills, which should jolt the Liberals’ political fortunes with a provincial election set for October 6, 2011.

It takes effect in the New Year but, depending upon local utilitiesÂ’ billing cycles, the discounted rate may not be available until May. However, the government will ensure that all consumers get the decrease effective January 1, meaning the accumulated discount will be applied to the first month of the new billing cycle.

While Duncan confirmed the 2010-11 budget deficit has been trimmed to $18.7 billion from $19.7 billion due to increased revenues from the growing economy, he declined to discuss what measures would be taken.

“We will be talking about things like hydro rates, yes,” the treasurer told reporters.

Senior officials confided the monthly relief is designed to help consumers cope with prices that continue to rise in part due to ambitious green-energy projects and new infrastructure.

All homes, small businesses, and farms will receive the rebates that are to be in effect for the next five years. They will be phased out when “debt-retirement fees” of around $10 a month — to pay the leftover “stranded debt” from the old Ontario Hydro — come off bills around 2016.

Big corporations and factories, which are already enjoying massive tax breaks, will not be eligible for the 10 per cent electricity rate cut.

“We want to help out and we want it to be meaningful,” said one insider, noting it’s more generous than merely removing the 8 per cent provincial portion of the 13 per cent harmonized sales tax from hydro bills.

The old federal 5 per cent goods and services tax that was melded with the 8 per cent provincial sales tax on July 1 to create the HST was always charged on hydro bills, which were exempted from PST.

Under terms of the 2009 agreement between Premier Dalton McGuinty and Prime Minister Stephen Harper, QueenÂ’s Park couldnÂ’t make energy bills fully exempt from the HST without OttawaÂ’s consent.

Liberal insiders believe the 10 per cent rebate is “a game changer” as the second-term government focuses more on pocketbook issues in an election year.

Speaking to reporters after a speech to an energy conference, Conservative leader Tim Hudak belittled the hydro bill relief.

“This is another huge backtrack by the McGuinty government,” Hudak said.

“Hydro bills are already up 75 per cent, scheduled to go up another 30 per cent, and now he’s going to give us 10 per cent back. I don’t believe Ontario families are going to be fooled.”

“Let’s not be fooled. Dalton McGuinty is basically taking money out of one pocket through the HST to give us 10 per cent back on hydro bills that have already gone up 75 per cent.”

In September, a Toronto Star-Angus Reid poll of 805 people found 86 per cent of Ontarians feel “it is harder now than it was two years ago to make ends meet.”

Three out of four respondents said they would like to see another party in power and 71 per cent fear Ontario “is on the wrong track,” spurring Liberals to move quickly to ease the burden on households.

That same poll concluded 41 per cent back Hudak, while McGuinty has the support of 29 per cent of decided voters compared to NDP Leader Andrea Horwath at 22 per cent, and Green Party Leader Mike Schreiner with 8 per cent.

But the Liberals believe they can “box in” Hudak with policies like a hydro rate cut.

In the Legislature, Duncan attacked the PC leader by reminding him he was in former premier Ernie EvesÂ’ cabinet when the Tories controversially froze hydro prices at an artificially low rate in 2002.

“We’re not messing around with people’s bills and fooling around with the numbers to paint a story that frankly isn’t accurate,” the Liberal treasurer said.

Speaking to reporters later, Hudak insisted a Tory government would “put consumers first,” but he repeatedly refused to say what he would do to reduce electricity prices if elected next year.

“We’re going to see what kind of mess Dalton McGuinty is going to leave. It seems like their hydro policy is fly by the seat of their pants,” he said, declining to reveal the Tories’ hydro plans.

The NDPÂ’s Horwath, in contrast, has been calling for an HST exemption on energy bills and warned the fall economic statement better have some good news for struggling Ontarians.

“All I can hope is that the government gets serious about providing some relief for Ontario families... it’s very clear that people can’t make ends meet,” the New Democratic leader said.

“A big part of that is soaring hydro bills.”