Globe and Mail EDITORIAL, April 29, 2016
Late last year, Ontario’s Auditor-General put out a report detailing the extent of the provincial government’s mismanagement of the electricity system. According to Bonnie Lysyk, thanks to a misguided government policy of artificially pumping up the cost of producing power in the province, Ontarians had overpaid for electricity to the tune of $37-billion between 2006 and 2014, and will continue to be overcharged by another $133-billion by 2032.
The scale of the waste is so large as to be almost incomprehensible, which may explain why Ms. Lysyk’s report was a one-day news wonder when it landed last December. Once the count gets into the hundreds of billions, the mind goes numb. If the province announced construction of the Burning Money Biomass Plant, fuelled by bales of five and 10-dollar bills, it probably wouldn’t be capable of destroying $170-billion.
The size of the disaster in the province’s electricity system is hard to get your head around. But voters, consumers, businesses and especially the Liberal government should be rereading Ms. Lysyk’s report. Because a document leaked to The Globe and Mail this week suggests that the Liberals, who a decade ago broke the electricity system through a fatal combination of good intentions and a willful disregard of both expertise and experience, may be preparing to repeat the exercise with their next greenhouse gas reduction plan.
The thing is, Ontario needs a greenhouse gas reduction strategy. So does every province, and so does the federal government. To meet our international commitments, and to bend the curve on global warming, those carbon-reduction goals have to be ambitious. Ontario’s proposed Climate Change Mitigation and Low Carbon Economy Act aims to reduce the province’s 1990 emissions by 15 per cent by 2020, 37 per cent by 2030 and 80 per cent by 2050. The province is committing itself to substantial carbon reduction in the next decade, and a near-zero carbon economy in a generation.
Those are not impossible ideals. They’re doable – using the right tools. Dramatically reducing carbon emissions is not a crazy idea, but the way Ontario is proposing to get to a low-carbon economy almost certainly is.
Ontario went about it all wrong
A decade ago, the government of Ontario started driving up electricity costs with a simple objective in mind: It wanted to reduce greenhouse gas emissions from the production of electricity. This was the right objective. But the way it went about it was all wrong. Instead of encouraging the electricity sector to be as efficient as possible, the government essentially ordered it to become costly, inefficient and irrational. Some of this was motivated by fantasies of industrial policy – look, Ma, we’re subsidizing the Green Jobs Of the Future! – and some of it was driven by an insistence on ignoring basic economic advice, much of it coming from the government’s own experts.
The result is that the cost of generating electricity in Ontario has exploded, even as power costs plummeted elsewhere. Between 2004 and 2014, power generation costs in Ontario increased by 74 per cent, according to the auditor. This benefits no one. The higher prices don’t come from carbon taxes; they come from higher electricity production costs. And that imposes a heavy cost on the economy.
However, because prices were rising, Ontarians started using less energy. Power use dropped by 7 per cent between 2006 and 2014. But at the same time, thanks to subsidies to encourage greater power production from green sources, the province’s generation capacity grew by 19 per cent. As a result, the province is now a major exporter of electricity – sold at prices far below the cost of production. The more power the province exports, the more taxpayers and ratepayers lose.
Ontario could have chosen a different route. Instead of politicians completely remaking the electricity sector on a whim, introducing inefficiencies by deciding what power technologies to back and how much to subsidize them, Ontario could have done the opposite. It could have set a carbon-reduction goal, imposed carbon taxes on carbon-generating fuels – and left it to producers and consumers to figure out how to most efficiently respond by reducing their own costs and emissions. It should have taxed dirty power and let the market figure out the cheapest way to get to lower emissions levels.
More enthusiasm than knowledge
Nearly a decade later, this week’s leaked document on its upcoming greenhouse-gas strategy suggests Kathleen Wynne’s government has not learned from her predecessor Dalton McGuinty’s mistakes. Glen Murray, a minister with more enthusiasm than knowledge, is in charge of the environmental file; last time around, George Smitherman was the designated enthusiast.
Ontarians should be worried. …
Read the full story here
charles stickley said:
WELL THIS IS THE DEATH OF ONTARIO. I am an immigrant here in Canada. What puzzles me is the fact that Ontarians are very complacent when it comes to what should be the greatest FRAUD committed by the liberal policy makers since the GAS PLANT debacle. The green energy projects and most of all the WYNNE TURBINE effort in Ontario is the biggest money making or the biggest money grab in history and will be carried by the people on their backs for the next couple of decades. The facts are out there that we are being led by stupid government people into the largest lies in the history of Ontario. The time is coming when people will see what they have allowed this government to do to their future.So what are the people doing about it? very little. It reminds me of Germany in the 1930’s when a paperhanger and x soldier took control of a country and the people supported him blindly into the greatest war in the history of the world.And the people followed him blindly until their country was leveled with millions left homeless and millions killed. Its the fact here that very few people want to get involved in what the government in power is doing. I went to 4 Hydro Rallys in Ottawa and the biggest one had about 70 people show up out of the millions that are being charged higher Hydro rates. WELL the lambs are still following the leader to the slaughter house. You thought that your rates were high now but they will be increased by 100% if nothing is done to stop the runaway train with the engineer being the Queen or King
of this evil empire Darth Vader Kathern Wynne. The Canadian people have to unite together to STOP THIS TRAIN and they should look at what the future holds for Ontario Highest rates in the world( almost there now) biggest loss of industry (in the process of doing this with the auto industry) higher hydro bills makes economy going down the toilet(higher hydro cost means less spendable money for familys for things other than food and shelter.There is talk that the Wynne Government wants to tax the well water used by millions of rural residents because this trains wants more money from the people by putting a use meter on the well discharge
It is up to the people to stop the politicians in Toronto because they are our biggest enemy. They are allowing this foolish spending on GREEN ENERGY PROJECTS where the people will be able to breath cleaner air but will be eating Campbells Soup’, if they are lucky, for the rest of their life.
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