Canadian Union of Public Employees (CUPE) - Ontario

Canadian Union of Public Employees (CUPE) - Ontario

June 09, 2014 15:07 ET

Leaders ignore real reasons for high Hydro rates

TORONTO, ONTARIO--(Marketwired - June 9, 2014) - Hydro rates are sky high. Industry and business are being gouged. People have trouble paying their hydro bills and the economy is very weak.

One person, a Conservative MPP from London, has a solution: "Power at cost, for the people."

That's right, a Conservative pushing for public power. Not only did he push for it, he got it.

This was 1905, and that person was Sir Adam Beck. Business and industry leaders, tired of being gouged by private power producers, backed Beck's plan to make power publicly owned and produced "at cost."

In 1906, electricity in Ontario became publicly owned and produced. Rates dropped by more than half.

Sadly, after generations enjoyed affordable electricity in Ontario, governments have been privatizing power. The result?

Today, $1.5 Billion is taken out of Ontario's economy by private power every year, and rates have skyrocketed.

Before deregulation, the money now funneled into profits went out to businesses and citizens in the form of low and stable rates provided by Ontario Hydro and municipal electric commissions. Business and industry prospered with the competitive advantage of "power at cost," providing millions of good jobs for nearly a century.

What happened, and how did Ontarians end up paying twice what businesses and citizens do in Manitoba and Quebec?

It began with Mike Harris. In 1998, without a hint of irony, his Conservative government undid what Sir Adam Beck worked so hard to create. They passed legislation to deregulate Ontario's public power.

Promising "lower rates," the Harris government changed Hydro One, Ontario Power Generation and municipal utilities from "at cost" commissions into "for-profit" corporations.

The question he was repeatedly asked was, "how do you get lower rates when you add in profits to generators, profits to distributors, profits to retailers, dividends to investors and commissions to commodities brokers?"

There was never a good answer. And today it is clear why: You don't.

Only one thing stopped the costly privatization of public power from happening faster. At Christmas time in 2001, Mike Harris announced the sale of Hydro One, the province's distribution system. The Ontario Electricity Coalition partners, the Canadian Union of Public Employees (CUPE) and the Communications Energy and Paperworkers (now Unifor), took the Harris government to court and won, proving that the Harris government did not have the right to sell Hydro One. It was a good day for the people of Ontario - privatization had been stopped.

But it hadn't been stopped. It was just done more subversively.

In the 2003 election, the NDP were successfully making public power a key election issue. Suffering in the polls, Liberal Leader Dalton McGuinty came out echoing the NDP's "public power" promise. That became one of his litany of broken promises. Instead, he brought in "smart meters" and "time of use pricing," which created enormous room for profits to be funneled into a new electricity market. His government's energy privatization scheme used terms like "community power" to mask privatization of green energy, and ultimately led to the gas plants scandal, which forced McGuinty from office. It's a scandal that simply could not have happened under Sir Adam Beck's old public power system.

Before deregulation, electricity was 4.3 cent a kilowatt hour, now it is 12.9 cents That's a 300 percent increase. In other words, Hydro prices have risen at 10 times the rate of inflation.

We're in an election again. There is still time to press candidates for affordable, reliable public power.

Kathleen Wynne is continuing this costly scheme of deregulation and privatization. The Liberal promise that "smart meters" would save you money was false. PC Leader Tim Hudak, who supported and voted for Harris' legislation to deregulate electricity, has amnesia about the Conservative record on Hydro. The plan he voted for, promising lower rates, has been soundly proven to be a failure.

How about the NDP, who so recently led a strong campaign for public power? Andrea Horwath is promising a hydro rebate, but will not utter the words "Public Power." She claims to be on the side of small business, which is getting badly hurt by high hydro rates. The NDP was right about electricity deregulation in the 2003 campaign and could today capitalize on that position. Why is Horwath refusing to do so? HST rebates certainly aren't going to solve the problem.

All three parties are promising jobs. Good jobs, in the private sector in Ontario have always been directly linked to at-cost, non-profit, public power rates.

This can all be paid for with lower rates, as was done over 100 years ago, by eliminating the profiteers.
Here's what needs to happen to create jobs and fix Ontario's economy.

  1. Close the electricity market
  2. Regulate rates
  3. Legislate real conservation measures that will protect the environment
  4. Change municipal and provincial utilities back into "power at cost" commissions

What are the costs to Ontario's economy if we don't have a debate for Public Power during this election? Election after election the real reasons for skyrocketing hydro rates are ignored.

Businesses and citizens in Ontario need to know that there is not one example of electricity deregulation working anywhere in the world. Why do we have it here?

Contact Information

  • Paul Kahnert, Retired Toronto Hydro worker
    and spokesperson for the Ontario Electricity Coalition
    from 2001 to 2010,
    905-887-5546

    Craig Saunders,
    CUPE Communications,
    416-576-7316