When you host The Agenda, you’re fortunate to have exclusive access to the most important politician at Queen’s Park on budget day: the minister of finance.
Over the course of almost three decades, I’ve interviewed nearly all of them. Most of the treasurer’s budget-day interviews are just a few minutes long and for the various nightly newscasts in the province. But we have always billed our interview on TVO as “the most in-depth budget day conversation the minister will have,” because we have a format that allows for some long-form journalism to happen.
The other nice thing about a longer interview is that you can get into more than just the bare-bones headlines of a budget. You can actually spend some time on issues that others can’t or won’t pursue. For me, that’s meant doing a deeper dive into one issue that rarely gets much attention, despite its being one of the highest-spending items in the budget.
Those of us who live in houses, condos, or apartments pay a monthly electricity bill. (If you’re a tenant, there's some chance it may not be extra but instead built into your rent.) Would you be surprised to know that taxpayers across the province help subsidize the cost of your electricity use?
Maybe not.
Would you be surprised to know that the subsidy for fiscal year 2024-25 as revealed in Tuesday’s budget is going to be $7.3 billion?
I bet yes. In fact, I’ll go further and bet that you’re shocked. That’s a lot of money, right?
Every year, I ask the finance minister why that number is so high. And for the past two years, Peter Bethlenfalvy has said we need to subsidize electricity prices because it gives Ontario a competitive advantage over other jurisdictions.
Then we do a bit of a well-worn, unrehearsed pas de deux. I come back at him with the fact that my electricity use (and come to think of it, his as well) is being subsidized. That’s right. Two guys, both of whom earn six-figure salaries, are having their electricity use subsidized.
“How does that make any financial sense?” I’ll ask.
Last year, Bethlenfalvy tried to have a little fun at my expense by saying that he listens to all Ontarians when it comes to budget policies and that I was the first person to lobby for increasing my electricity costs going forward. He said he’d take that under advisement for next year’s budget.
Well, I guess the Ontarians he consults didn’t offer the same advice — because if you read this year’s budget, you’ll see that electricity subsidization jumped more than a billion dollars.
The idea I tried to champion was that people who make decent incomes don’t need the province to subsidize their power usage. In fact, doing so acts as a disincentive for us to use less electricity. I’ve always been told by energy experts that the best electricity-generation program is conservation. Using less power means not having to spend billions on building new nuclear or gas plants. Paying people’s hydro bills hardly encourages them to conserve. In fact, you could make the opposite argument — that doing so encourages more profligate energy use. After all, the bigger the house, the higher the electricity use and the bigger the taxpayer subsidy.
Last year, I suggested to Bethlenfalvy that maybe he ought to look at means-testing the subsidy. I would definitely want people living on a lower income to keep their subsidy. They need it. But why should the province send me $9 a month to help me pay my hydro bill? Call me crazy, but I think that makes little sense. I’d much rather see that money go to other programs directed toward people who really need them.
During Tuesday’s budget lockup in the basement of the Whitney Block, I asked the treasurer about this issue again.
“That’s something you asked me about the budget last year,” he responded. “I’ve got a good memory, right?”
Apparently, he does. Bethlenfalvy went on to describe all the things the government has done to save citizens $8.4 billion in taxes and fees since the Tories took office in 2018. But he never actually answered the question of why the subsidy isn’t being means-tested, other than to say, “We’re always looking with an open mind at everything, but right now is not the time to put more costs on people.”
My smart-aleck follow-up: “So you are content to subsidize the electricity use of millionaires in this province?”
“I’m content to help all 16 million Ontarians,” the treasurer responded. “And I think we’re doing as much as anybody in the country to help people.” Then he pivoted to blast the feds for their plan to increase the carbon tax on April 1.
Anyway, I admit I really shouldn’t be in the business of telling finance ministers what they ought to do. But for some reason, this issue has stuck in my craw for years. The current Progressive Conservative government didn’t introduce this subsidy; it was created by a previous Liberal government to protect people when hydro rates went through the roof. It was supposed to be temporary. But this government has not only done nothing to reduce the subsidies, but also put them on steroids.
Do you think you could spend some of that $7.3 billion more effectively? I’ll bet you could.
When I interview the finance minister tonight at 8 p.m., I’ll no doubt bug him again about this. And I’ll remind him that at least some of that $7.3 billion could be used for much more useful purposes.
I suspect I know how he’ll answer. “You already asked me about that, Steve. But I’m happy to take it under advisement.”
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