Ontario Electricity price cap to be lifted

subscribe

Ontario Electricity price cap to be lifted

TORONTO - Ontario residents will once again pay the full cost of the electricity they use once an artificial price cap is lifted to help the new Liberal government cope with a $5.6-billion deficit inherited from the Conservatives.

"It's one thing to take this sort of approach when the province is in surplus, and it's quite another when we find ourselves bleeding red ink," Liberal Premier Dalton McGuinty said of the electricity cap during a speech to the Economic Club of Toronto. "I want a price regime that better reflects the true cost of electricity."

McGuinty said he will ask Energy Minister Dwight Duncan to present a plan to cabinet within 30 days to change the price structure so that what consumers pay more closely reflects the cost of electricity.

"This may not be popular, it may not be in our immediate self-serving political interest but we firmly believe it's in the public interest," McGuinty said.

"We firmly believe it's the right thing to do so we're going to do it."

The Liberals will also roll back scheduled corporate tax cuts, cancel the final phases of cuts to personal income tax rates, and eliminate tax credits for seniors as promised during the election that swept the Liberals to power Oct. 2.

McGuinty said Ontario would raise tobacco tax rates to national levels this year and impose an immediate freeze on government hiring. The new government will also reduce wasteful spending on high-priced consultants and collect from companies which owe taxes.

"We're bringing a responsible approach to government," he said.

During the campaign, McGuinty said the Liberals would keep the electricity cap in place until 2006. Ratepayers shouldn't have to pay for the mistakes of any government, he said at the time.

That artificially low rate cap of 4.3 cents a kilowatt-hour - implemented by then-premier Ernie Eves in November 2002 - has cost the Ontario treasury $700 million so far, McGuinty said recently.

The real cost of electricity use has been closer to six cents a kilowatt-hour.

Tory-imposed balanced budget legislation allows the Liberals to run a deficit this year, but they are forbidden from doing so next year.

Many analysts are skeptical that McGuinty will be able to balance the books for at least another year or two given the size of the shortfall.

Earlier Thursday, the man accused of dumping a deficit of almost $11 billion on the incoming Tory government in 1995 agreed the best thing the Liberals can do is to give the public the straight goods and then deal with the problem.

"You go very upfront with it and swallow hard and say these are the facts and as soon possible stop blaming the bounders who were there before," Floyd Laughren, Ontario's former NDP finance minister, said.

Related News

 Colin Mulvey, Project Manager

Scottish North Sea wind farm to resume construction after Covid-19 stoppage

GLASGOW - Neart Na Gaoithe (NnG) Offshore Wind Farm, owned by  EDF Renewables and Irish firm ESB, stopped construction in March.

Project boss Matthias Haag announced last night the 54-turbine wind farm would restart construction this week.

Located off Scotland’s east coast, it was awarded a Contract for Difference (CfD) in 2015 and will look to generate enough energy to power 375,000 homes.

It is expected to create around 500 jobs while also delivering £540 million to the local economy.

Mr Haag, NnG project director, said the wind farm build would resume with a small, staggered workforce return in line social distancing rules.

He added:…

READ MORE

IEA warns fall in global energy investment may lead to shortages

READ MORE

extreme-heat-boosts-us-electricity-bills

Extreme Heat Boosts U.S. Electricity Bills

READ MORE

pge bankruptcy

PG&E's bankruptcy plan wins support from wildfire victims

READ MORE

power lines

Closure of 3 Southern California power plants likely to be postponed

READ MORE