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Poor policies charge Ontario’s skyrocketing electricity prices: Report

Fraser Institute essays identify policies that have created Ontario’s electricity woes.


Ontario has lost at least 1.8 permanent manufacturing jobs for every new job created under the green energy initiatives since 2008.
Photo: Fotolia

TORONTO — Ontario’s mismanagement of energy policy has led to high electricity prices, tens of thousands of lost manufacturing  jobs and only minimal health and environmental benefits, says the Fraser Institute.

The right of centre public policy think-tank details the carnage in a series of essays.

“Ontario is a prime example of how not to manage energy policy – extreme government interference in the electricity market has made life more unaffordable for Ontarians and damaged the province’s economy,” said Kenneth Green, senior director of natural resource studies at the Fraser Institute and a contributing author of Understanding Changes in Ontario’s Electricity Markets and Their Effects.

The report identifies policies that have created Ontario’s electricity woes, including the phasing out coal-power generation, granting wind and solar generators long-term guaranteed contracts above market prices, and the Global Adjustment charge that, in part, actually pays generators not to produce power. These policies have led to the following:

• Residential electricity costs increased 71% between 2008 and 2016, more than double the national average increase of 34%.

• In 2016, Toronto residents paid, on average, $60 more a month for electricity than the average Canadian.

• Large industrial users in Toronto saw electricity prices jump 46% between 2010 and 2016, while the average increase in electricity costs for the rest of Canada was only 14%.

• Ontario’s high electricity prices reduced employment in manufacturing by some 75,000 jobs between 2008 and 2015.

• The Green Energy Act has not produced the environmental or health benefits, nor the green jobs advocates and the government promised.

“The recent history of electricity in Ontario has been pain without gain for residents and businesses alike,” said Ross McKitrick, Fraser Institute senior fellow and economics professor at the University of Guelph.

“Policymakers need to fully understand the nature of the bad policy decisions and their full effect before they can craft meaningful reforms that will actually lower hydro prices,” said Ross McKitrick, Fraser Institute senior fellow and economics professor at the University of Guelph.

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