McGuinty’s gambit little more than smoke and mirrors

By Randall Denley, The Ottawa Citizen   
Who’d have thought it possible, but Premier Dalton McGuinty’s government drifted a little farther away from reality this week with its plan to borrow money to artificially lower your electricity bills. The premier is living in a fantasy world where we pay alternative energy producers unrealistic prices for the power they generate, then pretend it’s not pushing up our bills.

By shifting costs from power users to taxpayers, McGuinty is really just taking the money from your left pocket instead of your right. This clumsy attempt to mollify those concerned about high power bills will cost $6.4 billion over five years. You’ll pay all that later, with interest. And the Liberals think this will make us vote for them next year.

The government would have us believe that the gambit is affordable because the provincial deficit will be only $18.7 billion, $1 billion less than a previous estimate. Surely McGuinty and Finance Minister Dwight Duncan must realize that a somewhat smaller deficit doesn’t generate new money to spend. It’s not like a surplus, guys.

If McGuinty manages his own finances the way he manages this province’s, expect to see him at the soup kitchen soon.

“We’re doing what families do. You’ve got to make a judgment call as to how much you’re prepared to borrow in order to address the pressures of the day,” McGuinty said Wednesday. Huh? Families that would borrow to pay their hydro bills would have to be in dire straits indeed. It wouldn’t take a great deal of financial literacy to know that this strategy would be a step on the road to bankruptcy.

Among the many unattractive aspects of McGuinty’s plan is the fact that the 10-per-cent subsidy will offer greater rewards to power hogs than to those who scrimp and keep their bills down. That undermines the government’s conservation message.

The 10-per-cent reduction in our power bills is really a bit of smoke designed to distract us from the most troubling number in Duncan’s financial update. The government hasn’t released its long-term energy plan yet, but this report presents numbers from it that projects a 46-per-cent increase in power rates over the next five years.

Makes the bogus 10-per-cent reduction look pretty small, doesn’t it? The government attributes 44 per cent of this to spending on generation and transmission and 56 per cent to its green-energy program. That’s the bill for all the expensive wind and solar deals the government has signed.

The government did its best to blur the bad news on power rates, with Duncan claiming that your actual power bill would rise only 3.6 per cent a year on average for the next five years, after his 10-per-cent cut was taken into account. It’s certainly fair to look at the bottom line on the power bill, not just the power rate, but Duncan conveniently decided not to include inflation in his calculation. The real average annual increase is 5.6 per cent, including the inflationary increases power generators and distributors expect to get.

What Ontario needs is a plan for lower-cost electricity, not a plan to pretend the cost is lower. That will inevitably mean importing more power from Quebec, which has a surplus of power at an affordable price. It will also mean simplifying the alphabet soup of agencies that is managing the steady increase in Ontario power rates. It will mean not signing any more green-energy contracts at prices that are wildly unrealistic. You don’t build a competitive industry by offering prices that are out of sync with what others would pay.

We might want to ask ourselves what makes power so much different from other things that we buy. The price should reflect the real cost, not some artificial political number. Ontario got scared out of a free market in energy prices when the former PC government tried it and prices went up. The government-controlled market hasn’t been any better. If you had a real market for power, the green-energy projects you’d see would be ones where the price was competitive. That’s the only type we need.

The only thing more disappointing than McGuinty’s plan to borrow our way to a brighter future was Progressive Conservative leader Tim Hudak’s decision to lamely play along. No person who claims to be fiscally conservative should support a plan to borrow to pay power bills. By doing so, Hudak not only passed up a great opportunity to differentiate himself from McGuinty, he positioned himself as yet another guy who will do anything to buy your vote with your money.

Contact Randall Denley at 596-3756 or by e-mail, rdenley@ottawacitizen.com

6 thoughts on “McGuinty’s gambit little more than smoke and mirrors

  1. Well wrote article summing up the frustration of citizens in this province who want a Premier with a reliable long term plan for hydro that doesn’t leave us in the dark, broke and with very little desire for setting up businesses here.
    The only business looking to cash in on the crooked deals of McGuinty is Samsung. What a lousy track record this Premier has, but if his way of running this Province is how he claims to run his family, than debt incurred on top of debt is fine by him.
    Ugh, not a good example for the next generation.

  2. Excellent article.
    Same theme different paper.
    In the Toronto Star–Friday Nov. 19 article refers among other things in the article “Province to borrow to pay for rate break” the author refers to
    “Teranet, owned by Borealis Infracture, will provide electronic land registration and writs services for another 50 years beyond the original 2017 date of the contract.” Duncan also revealed Ontario Taxpayers are receiving a $1 billion windfall from the Province’s Teranet land registry system–under a secret deal done without a public lender.”

    Does anyone know what this means?
    I find it ominous.

  3. There are no national security issues involved here so how dare the government make secret deals.

  4. Everyone, including those living off the grid will pay for the government’s useless green energy program. Even though the monthly electricity bill is going up it is not enough to cover the massive amount of money proposed to be spent.

  5. “McGuinty is really just taking the money from your left pocket instead of your right.”

    This is consistent with a government that on every file, can’t tell right from left or more importantly -right from wrong!

    __________________________________________________________________

    “Every Ontarian is a conserver and generator of sustainable energy either through a household or through a local community owned business, contributing to the rapid transition to 100% sustainable energy.” -OSEA vision statement.

    So if we all do what OSEA wants and get off the grid and demand tanks, our taxes will increase to keep the pockets of these greedy bastards suitably lined!

    Nice little scam the Green Energy Alliance hatched eh?

    11 months and counting down to what, a possible PC majority where on-the –fence-about –green-energy Hudak sits?

    Some democracy this is!

    B.B.W.

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