Ontario Government Introduces ‘Relief Plan’ For Hydro Consumers

 A Foreword by Doug Draper, publisher of Niagara At Large

Have you Niagarians on the Ontario side of the river opened up your Hydro One bill lately?

Ontario Finance Minister Dwight Duncan

Might give you more than a shock than you would get from sticking your finger in a light socket.

Energy costs are obviously a major concern for residents in Niagara, Ontario, given the comments and email Niagara At Large has received in recent months, and  in that spirit , this site is posting the following media release from the Ontario government and its finance minister, Dwight Duncan, released this November 18, on new measures for offering some “relief” to hydro consumers.

We encourage you, our readers, to follow this up by sharing your own comments – good or bad – on this government announcement. Our American neighbours may wish to join in with a few of their own ideas or concerns. You can post your comments at the bottom of this site.

Ontario Introduces Electricity Cost Relief – McGuinty Government Introduces New Measures to Help Ontario Families and Reduce Debt

NEWS November 18, 2010
 
The Ontario government today introduced the Ontario Clean Energy Benefit (OCEB), which would provide a 10 per cent benefit to help consumers manage rising electricity prices for the next five years.  The OCEB, which would help more than four million residential consumers and more than 400,000 small businesses, farms and other consumers, would take effect on January 1, 2011.

In order to have a clean, modern and reliable electricity system that includes renewables and creates jobs, the government has made significant investments.  While necessary and unavoidable, these investments are increasing electricity costs.  Over the next five years, residential electricity prices are expected to rise by 46 per cent, after which price increases are expected to moderate as Ontario will have largely completed the transition to a cleaner, more reliable system.

Ontario is emerging from the global economic recession.  By continuing its prudent approach to fiscal management, the government is on track for a deficit of $18.7 billion in 2010-11.  This is a $1 billion improvement over the 2010 Budget projection, and is almost 25 per cent lower than the $24.7 billion deficit projected a year ago for 2009-10.
 
The government has negotiated the principal terms of a proposed agreement to renew its long-standing business partnership with Teranet, by extending Teranet’s exclusive licences to provide electronic land registration and writs services in Ontario for an additional 50 years.  Under this proposed agreement, Teranet’s owner, Borealis Infrastructure, would provide the province with an upfront payment of $1 billion, which would be used to reduce the province’s debt.
 
This debt reduction would decrease Ontario’s ongoing borrowing requirements and would save up to $50 million in annual interest costs.  When added to the $1 billion reduction in the deficit, this payment means the government is borrowing $2 billion less than forecasted.  Beginning in 2017, the province would also receive annual royalty payments from Teranet, which are expected to be approximately $50 million in 2017-18 and to grow in future years.

 
These measures build on the government’s Open Ontario plan to create new jobs, boost economic growth and protect the progress Ontario families have made in their schools and hospitals. 
 
QUOTES
 
“Ontario is emerging from the global economic recession.  Since May 2009, more than 180,000 new jobs have been created, and this year the deficit projection has been slashed by almost 25 per cent.  With the changes we’ve made, nine out of 10 taxpayers are paying less income tax.”
– Dwight Duncan, Minister of Finance

“For a long time, governments of all political stripes have neglected the electricity sector, and that’s why we have made the necessary investments to build a cleaner system and to ensure the lights go on and stay on.  Ontarians are asking for some assistance with rising costs, especially their electricity costs, and every little bit helps during these lean times.”   
– Dwight Duncan, Minister of Finance

QUICK FACTS

§ §         Since May 2009, employment has increased by 2.9 per cent or 186,100 net new jobs.  As of October, Ontario has regained 75 per cent of the jobs lost during the global recession.
 
§ §         The 2010-11 revenue outlook, at $107.7 billion, is nearly $800 million more than the 2010 Budget forecast, largely reflecting stronger economic growth in 2010.
§ §         Total expense in 2010-11 is currently projected to be $125.6 billion – 0.2 per cent lower than the 2010 Budget forecast, due to a lower interest on debt expense projection.  This is consistent with the government’s approach to controlling the rate of growth in spending while protecting core public services.
§ §         As outlined in the 2010 Budget, the government continues its comprehensive review of all government programs and services.  To date, this review has identified more than $260 million in additional potential savings through both programming and administrative expenditure reductions.
 
§ §         In 2010-11, the estimated cost of the proposed OCEB is $300 million, with an estimated full-year cost of $1.1 billion next year.  These costs are accommodated within the fiscal plan as a result of the government’s prudent approach to managing its finances.
LEARN MORE
 
Read the 2010 Ontario Economic Outlook and Fiscal Review.
 
Learn more about how the government is helping families.
 
Read about the government’s proposed agreement with Teranet.
 
Read the mid-year update of Ontario’s financial results and economic performance.
 
Learn more about Open Ontario.
  
HELPING ONTARIO FAMILIES
 
November 18, 2010
 
Ontario’s economy is emerging from the global recession.  However, many Ontario families are still feeling anxious and uncertain about their ability to make ends meet.
 
Through the 2010 Economic Outlook and Fiscal Review and the Open Ontario plan, the McGuinty government is taking action to help Ontarians who are feeling the pinch of rising electricity prices.
 
ONTARIO CLEAN ENERGY BENEFIT
 
For a decade, Ontario made little investment in new supply and transmission infrastructure. 

By 2003, there was no plan for conservation, no plan for supply to match demand and about 25 per cent of Ontario’s electricity came from dirty coal.  Energy infrastructure was under stress and in decline.  The electricity system lost a net 1,800 megawatts of power capacity – the equivalent of Niagara Falls running dry.
 
With investments in new clean generation made by the McGuinty government, Ontarians have been able to count on a reliable electricity system that ensures the lights stay on while air quality continues to improve.  In addition, the Green Energy and Green Economy Act, 2009 investments will create more than 50,000 jobs.  Clean energy manufacturing plants are opening in communities like Sault Ste Marie, Guelph and Windsor to serve the Ontario market and to export made-in-Ontario solar panels and wind turbines.
 
In order to have a clean, modern system that includes a significant proportion of renewables, ensures reliability and creates jobs, investments in Ontario’s electricity system will need to continue.  While absolutely necessary, these investments are increasing electricity costs.
 
The government is proposing direct relief through a new Ontario Clean Energy Benefit (OCEB).  The OCEB would provide eligible consumers with a benefit equal to 10 per cent of the total cost of electricity on their bills, including tax, effective January 1, 2011.  The benefit would help more than four million residential consumers, and more than 400,000 small businesses, farms and other consumers.
 
The OCEB would help Ontario families through the transition to a cleaner electricity system.  Every little bit of assistance helps during lean times.
 
The following is an example of the impact the proposed OCEB would have on monthly electricity bills:
 
Customer (Monthly Consumption) Current Estimated Monthly Bill Estimated Bill after Ontario Clean Energy Benefit Monthly Benefit*(10%) Yearly Benefit*(10%)
Typical Residential800 kWh $128 $115.20 $12.80  $153.60
Small Business 10,000 kWh $1,430 $1,287 $143 $1,716
Farm 12,000 kWh $1,710 $1,539 $171 $2,052
Source: Ontario Ministry of Energy.*Typical 2011 monthly benefit for a consumer. Benefit amount will vary based on actual price, consumption and location.
 
Due to the length of time required to implement this change, the proposed OCEB price adjustments would appear on electricity bills no later than May 2011, and would be retroactive to January 1, 2011.
 
In 2010-11, the estimated cost of the proposed OCEB is $300 million, with an estimated full-year cost of $1.1 billion in the next fiscal year.  These costs are accommodated within the fiscal plan as a result of the government’s prudent approach to managing its finances.
 
In addition to the OCEB, the government will also be outlining a strategy through its Long-Term Energy Plan, which will carefully balance cleaner generation, job creation, reliability and cost.
 
TAX SUPPORT FOR ONTARIANS
 
Today, nine out of 10 Ontario taxpayers are paying less income tax than they did a year ago.
 
As part of the Open Ontario plan, Ontario’s Tax Plan for Jobs and Growth and announcements since the 2009 Budget would provide tax relief of $12 billion to people over three years.  Through the plan, the government is delivering both permanent and temporary tax relief, including tax credits that put money into the pockets of Ontario families and individuals.
 
To help even more Ontarians, the government has recently introduced a number of new tax credits and enhanced some existing ones.
 
Northern Ontario Energy Credit
 
A new Northern Ontario Energy Credit (NOEC), introduced in 2010, will help people in northern Ontario with the higher energy costs they face.  This credit provides up to $130 for a single person and up to $200 for a family (including single parents).  Through the NOEC, the government will provide northern Ontarians with roughly $110 million in energy credits over the next three years.  Over half of all northerners will receive relief.
 
Children’s Activity Tax Credit
 
A new Children’s Activity Tax Credit (CATC) has been proposed to help parents with the cost of enrolling their children in activities that encourage them to be healthy and active.  This would be the only tax credit in Canada that provides for a broad range of children’s activities.  Parents would be able to receive up to $50 per child per year (up to $100 per child with a disability) towards the cost of these activities.  Parents would be able to claim this credit in addition to the federal children’s fitness tax credit.
 
The federal children’s fitness tax credit is non-refundable — it reduces the amount of income tax a person pays.  People who do not earn enough to pay income tax do not benefit from non-refundable tax credits.
 
Ontario’s proposed credit, however, would be refundable so that people would get the credit even if they pay no income tax.  This would allow more lower-income families to benefit.
 
The CATC would provide more than $75 million to 1.8 million children in about 1.1 million Ontario families each year.
 
Ontario Energy and Property Tax Credit
 
The proposed Ontario Energy and Property Tax Credit would provide relief for both sales tax on energy and for property taxes for low- to middle-income Ontarians.  The government has proposed to enhance this relief for Ontario seniors by making 50,000 more seniors eligible for this credit, and by proposing increased relief to about 690,000 seniors who already benefit from the credit.
 
This tax credit would provide up to $1,025 annually for eligible seniors or up to $900 annually for non-seniors.
 
Overall, the proposed Ontario Energy and Property Tax Credit would provide $525 million more than the property tax credit relief provided in 2009, for a total of about $1.3 billion annually to 2.8 million Ontarians.
 
IMPROVING RETIREMENT INCOME SECURITY
 
Many Ontarians are worried that they haven’t been able to save enough to maintain their standard of living in retirement, and are feeling insecure and uncertain about their financial future.
 
The government is committed to strengthening the retirement income system and helping Ontarians secure a stable retirement.  The government has introduced two bills on pension reform – the most significant reform to pension law in a generation.  Bill 236 was approved by the Legislature in May; Bill 120 is currently before the Legislature.
 
Ontario’s comprehensive plan to improve retirement income security for Ontarians consists of three key elements:
 
§ §         Modernizing Ontario’s Pension Benefits Act to enhance the reliability, security and affordability of employment-based defined benefit pension plans.
§ §         Supporting a modest, fully funded and gradual increase to the Canada Pension Plan to ensure that working Canadians have an improved pension.
§ §         Working with other governments and pension partners to develop new and innovative ways to expand the range of institutions that can set up pension plans and the range of people who can access them, including the self-employed.
 
PROTECTING CONSUMERS THROUGH STRONG FINANCIAL REGULATION
 
The 2010 Economic Outlook and Fiscal Review introduces significant measures that would protect consumers and investors, and modernize financial regulation in Ontario.
 
The government is proposing amendments to the Ontario Securities Act to allow the Ontario Securities Commission (OSC) to develop and implement a robust regulatory framework for over-the-counter (OTC) derivatives.  These amendments would allow for new rules specifically designed for OTC derivatives and would also include derivatives within the scope of existing insider-trading offences.  The OSC will undertake significant consultations in developing the rules that support these proposals.
 
Additional proposed amendments to Ontario’s Securities Act would provide for regulatory oversight of credit rating agencies, and strengthen the oversight of alternative trading systems, which are securities marketplaces that perform some of the functions of an exchange.
 
In addition to promoting fair and efficient capital markets, these reforms would help Canada deliver on its international financial reform commitments and assist in a seamless transition to the new Canadian Securities Regulator.  To meet the needs of Canadian capital markets, the national regulator should be centred in Canada’s financial capital, Toronto.

(Visit Niagara At Large at www.niagaraatlarge.com for more news and commentary on matters of interest and concern to our greater binational Niagara region.)