NDP leader Andrea Horwath has taken the wraps off a plan that she says would reduce hydro rates by 30 percent. Part of the plan involves asking the federal government to scrap the HST paid on hydro bills. But since all levels of government are running deficits, such a move would simply transfer savings on hydro to higher federal taxes. The Harris government tried freezing hydro rates but the result of that move was to burden future governments with extra debt and a huge hydro infrastructure deficit. Kathleen Wynne’s plan is the equivalent of extending the amortization on a home mortgage. It relies on squeezing a few more years out of existing hydro infrastructure after they have been in place for 20 years. Renegotiating some of the 20 year green energy contracts might work; but the government has little leverage with these foreign energy suppliers. The fundamental problems remain—we have a vast oversupply of energy in Ontario and we are forced to pay for the most expensive sources off the top. Hydro rates have nearly doubled in the past fifteen years and projections suggest there is no end to energy price increases. A recent poll suggests the Wynne Government is facing a possible annihilation at the polls over hydro. If the fix involves subsidization, then all we are doing is shifting hydro costs to the tax bill. The consumer will not see a difference.
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