By Kenneth P. Green
and Taylor Jackson
The Fraser Institute
The Ontario Government has suspended its latest round of renewable energy plans – a move that will save consumers money.
While this may be a step in the right direction, the government’s “green dreams” have already done a lot of damage in the province. A recent story from the CBC tells the sombre story of an elderly Ontario couple who now have to make the trade-off between heating and eating.
They are in their 80s, surviving on pension incomes, and live in a small two-bedroom bungalow. For heating they use baseboard heaters and a wood stove. They try to conserve energy by using the BBQ for cooking and unplug everything they can. Despite these cost-saving measures, from January to August 2016, their hydro bills totalled $2,800 and they expect to spend about $4,300 by the end of the year. According to the CBC, these high costs have forced them to “cut down on entertainment and groceries – reducing fruits and vegetables and therefore not eating as well as they use to.”
Unfortunately, these types of situations are becoming a harsh reality for many Ontario families.
But how did we get here?
One of the main reasons is Queens Park’s costly green energy programs. For example, thanks to the Green Energy Act, introduced in 2009, Ontarians now pay ]double the average American cost of wind and three-and-a-half times the average cost of solar power in the U.S. All told, according to figures from the Ontario’s auditor general, Ontarians stand to pay $9.2 billion more for renewables under the current 20-year Feed-In-Tariff contracts than under Ontario’s previous program of competitive renewable procurement.
Indeed, the disparity between what Ontarians pay for electricity versus the rest of Canada is found in data compiled by Manitoba Hydro. Based on estimates, an Ottawa family who consumes 1,000 kilowatt-hours (kWh) of electricity a month could expect a monthly electricity bill of roughly $165.
By comparison, a family with a similar level of consumption in Vancouver or Edmonton could expect a monthly bill of around $105. In Winnipeg, around $85. In Montreal, less than $75.
The higher costs in Ontario represent extra money many families don’t have. It’s also understandable why, with prices like these, that more people in Ontario are in energy poverty – a situation where households spend at least 10 per cent of their household budgets on in-home energy use such as lights, appliances and heating – than in British Columbia, Alberta, Manitoba or Quebec.
Sadly, the situation is unlikely to improve any time soon. The Ontario government recently unveiled its Climate Change Plan, which includes many more high-cost policies such as subsidizing the purchases of electric cars. The government’s own document admits that measures like this will only have a very minor impact on greenhouse gas emissions, yet the plan to increase electric vehicle purchases may cost up to $277 million over the next five years.
While the suspension of the latest planned purchases of renewable energy is a step in the right direction, Queen’s Park should recognize that the province’s “green dreams” have resulted in serious consequences for Ontarians and their families.
Kenneth P. Green is senior director and Taylor Jackson is a policy analyst in Natural Resource Studies at The Fraser Institute.