Fraser Forum

The human cost of Ontario’s electricity failures

Printer-friendly version

Over the last few months, a number of news reports have explained the hardships many Ontario families endure as a result of the government’s costly electricity policies.

The latest tragic story comes from Global News. It spotlights one Ontario couple who are unable to afford their bills and have been without electricity for three months. The couple has also had to jerry-rig a gas-powered generator into their home’s wiring to provide “just enough electricity to keep the power running and fridge turned on for about four hours a day.”

While this situation is tragic on its own, it’s but one of many that Ontario families now suffer through.

Indeed, to gain some perspective on how many Ontario families might be struggling, consider the measure of energy poverty—a situation where households spend at least 10 per cent of their household budgets on in-home energy use such as lights, appliances and heating.

In a recent study we estimated that in 2013, approximately 400,000 Ontario households were in energy poverty, based on their spending on electricity, natural gas and other energy sources used within the home. That’s 7.5 per cent of all households in the province. And that estimate doesn’t include the money Ontarians spend on another crucial energy source—gasoline.

And let’s be clear, much of the high electricity costs Ontarians now face could have been avoided, as they stem from policy choices made at Queen’s Park.

Ontario’s foray into renewable energy (largely derived from the 2009 Green Energy Act) is one of the chief culprits behind the rising costs. One study estimated that in 2013, Ontario’s “solar and wind systems provided just under 4 percent of Ontario’s power but accounted for about 20 percent of the average commodity cost.” This same policy has also led to Ontarian’s paying double the average American cost of wind and three-and-a-half times the average cost of solar power in the U.S.

Finally, although Ontarians will soon face the new costs of cap-and-trade, the province recently cancelled its latest round of renewable energy procurement, which should save Ontarians some money.

But much of the damage has already been done and Ontario’s electricity system continues to produce the real human costs of misguided government policy.


Blog Category: 

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.