Thursday, March 26, 2015

Ontario Removes the Clean Energy Benefit and Removes Debt Retirement Charge, Adds Electricity Subsidy for Poor

So Ontario has plans to remove the Clean Energy Benefit, that reduced electricity prices for Ontarians ("by providing a 10 per cent rebate on applicable electricity charges and taxes") at the end of this year. In a sense the taxpayer was paying for that as it pretty much came out of the provincial budget so in some sense it is better since ratepayers should be responsible for all electricity costs. That will be better for the provincial budget, starting in the 2015-2016 fiscal year however obviously worse for a lot of Ontarians since they will be pay more for electricity.

The Clean Energy Benefit was always ironically named, considering the province's Green Energy program certainly didn't make electricity cheaper. Orwell would be rolling in his grave.

At the same time, the provincial government is getting rid of the debt elimination charge, however that is a lot smaller than the Clean Energy Benefit. According to this Star article, the energy minister Bob Chiarelli says the average Ontario hydro bill will increase by $120 per year due to the changes.

The province also announced a program to subsidize the electricity costs of the poor. From the same article:

"Chiarelli said the proposed Ontario Electricity Support Program will slash the monthly electricity rate for a low-income family by $20 to $50 a month.

Under the plan, a family of four with an annual income of less than $28,000 would be eligible for a $38 monthly ‎credit for a total of $456 per year.

“For many low-income Ontarians paying their monthly electricity bill is a real challenge. In comparison to other residential consumers in the province, low-income Ontarians spend a proportionally higher percentage of their income on electricity per month,” Chiarelli said.
“Families and households should not have to choose between turning on the lights and putting food on the table,” he said.

The minister said the Ontario Electricity Support Program is expected take effect Jan. 1, 2016."

So the middle class (lower middle class for that matter) gets the boot. I'm not opposed to helping the poor, however this is another means tested program that incentivizes staying poor and effectively raises their marginal tax rates. However high electricity prices (caused by the province's Green Energy programs) does obviously affect the poor quite substantially.

Basically the province is subsidizing the poor and also subsidizing the rich investors in sun and wind projects. Fantastic.

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