Ontario PCs won't cut hydro bills by 12 per cent; says they'll still be lower than under Liberal plan

Ontario's Progressive Conservative government will not fulfill its 2018 election promise to lower electricity bills by 12 per cent.

From 2018 to 2021 the average ratepayer's bill increased by 4.3 per cent and will continue to increase by two per cent each year, according to a report on hydro bills released Wednesday by Ontario's Financial Accountability Office.

Ministry of Energy staff told the FAO that the government won't cut bills by 12 per cent from 2018 levels, but that it is meeting its commitment by making bills 12 per cent lower than they would have been under the former Liberal government's so-called Fair Hydro Plan.

That 12-per-cent gap won't be achieved until 2025, the FAO report said -- well after this year's election -- but the number will continue to grow, peaking in 2029, when bills will be 23 per cent lower than under the Fair Hydro Plan, assuming current policies continue.

"In fact, the government isn't going to be reducing the electricity bills," Financial Accountability Officer Peter Weltman said. "The bills will be lower than they would have been under the previous government's, Fair Hydro Plan."

The Tories' election platform had said they would lower electricity bills by 12 per cent by returning Hydro One dividend payments to families, paying for conservation programs out of general revenue, cancelling energy contracts and declaring a moratorium on new ones.

Energy Minister Todd Smith said in a statement that the FAO report confirms that bills will be 12 per cent lower than they would have been under the Liberal plan and the savings gap will continue to increase.

"The FAO report confirms what Ontarians have known for years -- the failed policies of the former Liberal government resulted in skyrocketing hydro rates," Smith said.

"Cutting costs for Ontario families and businesses is a priority for our government and we are going to keep delivering on our promise of making life more affordable."

The Liberals introduced the plan in 2017 as soaring hydro bills became a source of major anger ahead of the election. The plan subsidized bills and created a new entity controlled by Ontario Power Generation to take on debt to fund the bill reduction.

The cost of paying back that debt, which would have been up to $28 billion under the Liberal plans, was set to go back onto ratepayers' bills starting in 2022, keeping the costs of the plan off government books.

Instead, under changes to subsidy programs that the Progressive Conservative government made, that cost will be borne by taxpayers, with a price tag of $37.6 billion over 20 years, the FAO said.

In total, nine different energy and electricity subsidy programs will cost the province a total of $118.1 billion over 20 years, the report said.

This report by The Canadian Press was first published Feb. 16, 2022.