Charles Sousa, corporate taxes Ontario, Dalton McGuinty, electricity bills Ontario, Green Energy Ontario, Kathleen Wynne, Parker Gallant, Ross McKitrick, Scott Luft, Terence Corcoran, wind power Ontario
With just 20 minutes to go until the Kathleen Wynne government presents its budget, we thought it was good timing to post this opinion from Financial Post editor Terence Corcoran this morning, on the Liberal government’s electricity policy–particularly its Green Energy program–and what the (disastrous) result has been for Ontario.
If you like this, be sure to read related pieces by Parker Gallant and Ross McKitrick.
Terence Corcoran: Ontario Liberals’ last power trip
Thursday’s Ontario budget should be the last gasp of the McGuinty Liberals in a province that needs a premier who can say more about provincial affairs than “I didn’t have access to those financial parameters.”
The Ontario Liberal budget Thursday could be the last gasp of a decade-long governance disaster. It certainly should be. The current premier, Kathleen Wynne, was first elected as part of Dalton McGuinty’s Liberal sweep of the 2003 election. Ms. Wynne’s current trick is to distance herself from the past ten years of mismanagement, policy bungles, grotesque waste, pro-union pandering, tax-gouging, big spending green dirigisme.
As Ms. Wynne put it during questioning the other day over the rocketing cost of the Liberal government’s cancellation of two electricity- generating plants, “I didn’t have access to those financial parameters.” She wasn’t told. Didn’t ask. The cost of the power plant deals is now up to $600-million, money that served no purpose, vapourized for political reasons.
When it comes to the financial parameters of 10 years of bungled McGuinty statism that spans electricity, medical spending, green belts and transit, Ms. Wynne has a lot of dodging to do. She apparently wasn’t there for the billion-dollar air ambulance crack up, the billion-dollar e-health meltdown. Nobody told her that all the spending — up 60% over the McGuinty years — would lead to a fiscal mess, even though she voted on the budgets that delivered the deficits that now loom for years to come. She never saw the financial parameters of the Green Energy Act and the cost of wind and solar to taxpayers and ratepayers. Kathleen Wynne missed it all.
As Parker Gallant and others have documented over the years in this Ontario’s Power Trip series, the $600-million cost of the gas plant cancellations is also mere kilowatts of waste compared with the megawattage imbedded in the green energy extravaganza, a staggering explosion of misguided investment that now threatens to raise Ontario electricity rates to the highest in North America. At the same time, as Mr. Gallant outlines elsewhere on this page, the green energy program is eviscerating Ontario Power Generation, the government-owned electric producer whose value is being eroded by billions of dollars.
Not only has Ms. Wynne missed the parameters of McGuintyism, she now seems poised to do the unthinkable, which is to say she appears set to do it all again.
Indications that Ms. Wynne is another McGuinty have emerged in the usual pre-budget leaks and scuttlebutt. Her new finance minister, Charles Sousa, has announced the government will cave into NDP demands for a 15% reduction in auto insurance rates. It’s a page right out of the populist playbook run by McGuinty, who promised to cut auto insurance rates by 10%, and did sort of for a brief period. The idea that the government will be able to issue a directive to insurance companies to cut rates by 15% is ludicrous. Some reform of the heavily regulated sector is likely useful, but the government is said—by the Toronto Star—to be planning an across- the-board cut in insurance company profits.
The McGuinty Liberals raised corporate taxes, negotiated union-friendly contracts with civil servants, gave unions more power, brought in transit policies that promoted urban sprawl, imposed ethanol mandates. Ms Wynne promises more of the same.
On transit, she appears to be willing to engage in a round of tax increases,and bring in new taxes, to fund pubic transit expansion in the Toronto area. Another area that is destined to receive the same old dodgy policy moves is health care. A $300-million funding of home care related services is a pre-budget announcement that suggests cuts are coming in other areas that will need to be offset by Ontarians who will have resort to home care as the alternative.
But the biggest issue facing the province, aside from the dominant crisis surrounding spending and deficits over the next four years, remains electricity policy. At some point the Premier of Ontario—whether it is Ms. Wynne or her successor following an election—will have to face the fact that the province’s economy is at some risk of being priced out of the world market. Ontario power consumers are also being forced to pay high power rates for electricity that should be available at much lower prices.
With this Thursday’s budget, the stage may well be set for a new government with a new leader who has more to say about the state of the province’s fiscal and policy situation than “I didn’t have access to those financial parameters.”