Ontario residents paying double the national average hydro prices, says Fraser Institute report

During the reported period, energy price in Ontario increased by 71 percent, almost twice Canada's average increase of 34 percent. 

Torontonians’ electricity bills were highest among major Canadian cities, according to Fraser Institute report.

The report titled ‘Evaluating Electricity Price Growth in Ontario' by Taylor Jackson, Ashley Stedman, Elmira Aliakbari, and Kenneth P. Green, was published in July 2017.

The report pointed out that affordable electricity appears to be a growing challenge for Ontarians.

It said, "In fact, electricity prices in Ontario have risen substantially over the last decade, placing a burden on many Ontarian households. Indeed, the province of Ontario has the fastest growing electricity prices in the country and its cities have some of the highest average residential monthly bills in Canada".

“Ontario’s electricity prices have risen by 71 percent from 2008 to 2016, far outpacing electricity price growth in other provinces, income, and inflation…This was two-and-a-half times greater than the national average during the same period. … In particular, the growth in electricity prices was almost four times greater than inflation and over four-and-a-half times the growth of Ontario’s economy (real GDP)," said the Fraser Institute report.

Fraser Institute conducts researches into quality of life in Canada by studying, measuring, and broadly communicating the effects of government policies, entrepreneurship, and choice on their well-being.

The Institute said that prices significantly increased from 2015-2016, when they rose by 15 percent in Ontario, with Toronto and Ottawa experiencing the most significant price increases.

“Toronto’s monthly electricity bills (including tax) are $60 more per month ($720 more per year) than the Canadian average. Consumers in Ottawa pay $41 more per month ($492 more per year) on electricity bills than Canadians in other provinces. Montreal had the lowest monthly electricity bills for residential consumers at $83," said the report.

Torontonians paid an average of $60 more per month last year than the Canadian average of $141.

According to reports, Torontonians paid an estimated $1,000 more per year for electricity than residents in Vancouver and Calgary.

And Albertans actually saw their bills decrease in recent years, according to media reports.

Blaming the provincial government’s policy options and poorly structured long term contracts for high cost of electricity, the Fraser Institute suggested that the provincial government reform its policies to bring the price of energy down, closer to the national average.

According to media reports, Premier Kathleen Wynne did say at a Liberal convention last November that she had made a mistake by not paying attention to consumers’ rising hydro bills and had instead, focused too much on larger problems with the hydro system.

Glenn Thibeault, Ontario’s Energy Minister, agreed with Wynne that hydro bills proved to be a burden for many families in Ontario.

Ontario's independent energy regulator, Ontario Energy Board, which works to ensure a sustainable, reliable energy sector to help consumers get value from their natural gas and electricity services, announced last month that electricity prices will go down on July 1 due to government’s Fair Hydro Plan applied to different customers in different ways depending on how they buy their electricity as revealed by the Time-of-use (TOU) rates, which tracks time-of-use electricity rates since 2006.

Since 2006, the price Ontarians pay for off-peak electricity has gone up from 3.5 to 8.7 cents per kilowatt-hour – an increase of nearly 150 percent which means off-peak consumption accounts for roughly 65 percent of a residential customer’s bill.

Ottawa residents paid $41 more than the average and Montreal, comparatively, had the cheapest electricity bills among major cities in the country, with an average bill of $83 per month, or $58 cheaper than the national average in 2016.

“Given the critically important role that affordable electricity plays in peoples’ standard of living, it is time for the Ontario government to have a hard look at how their policy choices are affecting peoples’ lives. It is also time for the government to begin pursuing meaningful policy reforms aimed at lowering electricity bills for Ontario residents,” said the Fraser Institute report.

“It’s government choices that led to this consequence,” said Green, who is the senior director at the Fraser Institute’s Center for Natural Resource Studies.

“Really, they have to walk back from where they are toward where the rest of the world is going, which is natural gas, nuclear power, hydro (electric power) and not wind and solar power,” said Green.

Advantages of the cost effective option of natural gas -- which is being availed by most of Canada’s neighbouring countries and US -- should be adopted by Canada, Green added.

(Reporting by Asha Bajaj)

Image: Ontario Energy Board website