Ontario Introduces Electricity Cost Relief
McGuinty Government Introduces New Measures to Help Ontario Families and Reduce Debt
Ministry of Finance
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.
- 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.
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."
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."