Financial Post, Parker Gallant
According to the Globe and Mail, Ontario Premier Kathleen Wynne says her province “is ready to shield Canada from the economic tsunami caused by declining oil prices and a sinking dollar.”
Ms. Wynne’s comments came after an RBC report estimated the fall in oil prices will actually help the Canadian economy by boosting household purchasing power by $8.9 billion this year. With annual Ontario gasoline consumption of 16.4 billion litres, a permanent slide in the price of about 25 cents (from $1.20 a litre to 95 cents a litre) should translate to about $4-billion annually in the hands of Ontario consumers.
Premier Wynne went on to say: “I don’t wish for low oil prices and a low dollar for Alberta,” she said. “But at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then that’s a good thing.”
If lower oil prices are a good thing, what can the premier say about the higher electricity prices she is responsible for? Ms. Wynne cannot have it both ways. The cut in gasoline prices, in fact, will only replace a portion of the cash the Liberal government’s Green Energy & Green Economy Act (GEA) annually extracts from consumers on their electricity bills. If one goes back to 2009 when the GEA was passed into law and compare the price of electricity with today’s prices, the hit to Ontario’s ratepayers (including manufacturers) is about $4.5 billion per year. Read article