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Ontario’s Electricity Rates and the Fair Hydro Trust

Fair Hydro Trust Bonds have just been announced and are coming to the financial markets shortly.


How does this impact you? This is how the current Ontario Liberal government is funding the 25% rebate on electricity rates. Quite simply, it’s more debt, but on the books of Ontario Power Generation, not on the government’s books.


From Richardson GMP: ” ‘Cost-recovery bonds’? That’s what they’re calling the inaugural sale of debt by issuer Fair Hydro Trust, the special purpose entity created by Ontario Power Generation. Recall last year in response to political pressure due to rising electricity rates, the Ontario LIberal government announced it would be lowering electricity bills for residential consumers, small businesses and farms as part of a significant restructuring of how the costs of operating the electricity system are treated. Electricity rates have been rising in Canada’s largest province due in large part to the cost of fixed-price contracts entered into with clean energy generators over the last decade. The Province’s blueprint, known as the ‘Fair Hydro Plan’ contemplates an immediate 25% reduction in electricity rates for eligible consumers. At the same time, it keeps the amount payable to generators of electricity (through the clean energy contracts and otherwise) unchanged.”

Still reading?


Let’s flip to the People’s Guarantee for a minute.


The further 12% reduction in electricity rates proposed as part of the PC Party Platform will be funded by returning Hydro One dividends to ratepayers, instead of putting them into the government’s general coffers.


After all, if you’re an electricity ratepayer in Ontario, shouldn’t you be able to participate in the profits of this publicly owned utility? Otherwise, the profits are effectively just another tax.


Which, by the way are subject to HST, another tax, and are paid with our incomes, which have already been taxed.


Tax upon tax upon tax.




Let’s fix it! Time for change.

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