Ontario electricity prices increased twice as fast as the national average over the past decade, and the average Toronto resident now pays $60 more per month than the average Canadian for electricity, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian policy think-tank.
“Electricity is a necessity, and Ontario’s high prices pose a serious burden for many families who, after paying their hydro bills, have significantly less money to spend on other important priorities,” said Kenneth Green, Fraser Institute senior director of energy and natural resource studies and co-author of Evaluating Electricity Price Growth in Ontario.
The study also finds that electricity prices in Ontario increased 2.5 times faster than Ontario income levels between 2008 and 2015 (the latest year of income data).
In fact, electricity prices rose a staggering 71 per cent (from 2008 to 2016), more than double the national average increase of 34 per cent over the same time.
Consequently, Ontario cities have some of the highest monthly electricity bills in Canada.
For example, residents in Toronto (the city with the highest price anywhere in Canada) pay, on average, $201 per month (including taxes)—an increase of $77.09 over the past six years. Ottawa residents pay $183 per month.
These high rates dwarf monthly electricity bills in Montreal ($83), Calgary and Edmonton ($109), and Vancouver ($114).
The study finds that Ontario’s high prices are directly tied to the provincial government’s phase-out of coal energy, poorly structured long-term renewable energy generation contracts and other policy choices.
What’s more, to address the high costs faced by residents, Queen’s Park has recently announced a plan to use debt-financing to artificially lower current electricity prices. However, this plan will result in new charges being added to future bills.
“The Ontario government and its energy policy decisions share a lot of blame for the current crisis in electricity prices,” Green said.
“Ontario residents need real policy reform to help make electricity affordable again, not just short-sighted shell games that borrow from future ratepayers to subsidize current bills.”