Shortly, the Fair Hydro Act will dictate a 17% reduction in hydro rates and supposedly save taxpayers $26 a month, as estimated by the Ontario Energy Board. In a desperate attempt to win the next election, Premier Kathleen Wynne pretends she is reducing hydro bills by 25%.
But, she falsely includes the removal of the provincial sales tax from hydro bills, which happened in January. While the tax disappeared, in a clever sleight of hand, she added an equal cap and trade tax to gasoline and natural gas bills, eliminating the removal.
In May, the OEB lowered hydro rates by 9%. A further 8% reduction will follow once the Act is law. But, the reduction will be short lived.
Next year, hydro rates are expected to start rising by at least two percentage points annually bringing that 17% reduction down to 9% in four years. The new Act will not allow hydro rate increases higher than the inflation rate.
If the current rate of 2.3 per cent holds, it would mean hydro prices could rise by some 2% per year.
As provincial voters go to the polls next June they might already have seen their hydro rate reduction slipping to 15%. Will a reduction, which could be wiped out in less than eight years, stop the freefall of Wynne’s popularity?
A declining reduction is a small amount to buy votes in a province in which hydro users have seen their rates almost double over the last few years.
Only the pending election seemed to soften her arrogant autocratic rule, forcing her to pretend she was going to do great things while, at the same time, doing irreparable damage to Ontario. The upside is she may create enough animosity to cause voters to demand a return to democracy.
On September 17, 2015, the New York Times published a two-page article on democracy by Roberto Foa and Yascha Mounk. They believe democracies are, “… not as consolidated as they once were, in good part because citizens no longer enjoy the material advances they once took for granted. There is no historical precedent that can tell us what happens to established democracies when most citizens go years, even decades, without an improvement in their standard of living.”
Many in Ontario have gone years with no appreciative standard of living increase. Minor drops in hydro rates, accompanied by cap and trade taxes able to wipe out the benefit, as Wynne is plotting, will further constrict their lifestyles.
At some point it could lead to the masses wanting something better.
If they can coalesce around a return to representative government, they may prevent leaders like Wynne from ever recurring.