Fraser Forum

Ontario government subsidizing sector it’s been demonizing

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So, here’s the thing. In terms of public policy, Ontario’s government is engaging in what can only charitably be referred to as public policy “inconsistency.”

On the one hand, Ontario is officially in the forefront of green energy and environmentally-friendly public policies whether it’s promoting the GTA Greenbelt, or promoting public transit and shutting down GHG-intense energy sources. On the other hand, Ontario is busy subsidizing the sector that is busy generating the pollutants and emissions these green energy policies are trying to reduce.

Ontario had shut down its coal plants and has been transforming its energy sector into a future of eco-friendly sustainable energy policies via wind and solar subsidies that have raised the cost of electricity in the province to the point of bankrupting individuals and businesses. The price of power in Ontario has skyrocketed to the point where the Premier Wynne has been forced to publicly acknowledge the hardship endured by many homeowners and businesses.  

Ontarians now pay more for electricity than residents of many other provinces and U.S. states. The price of off-peak power has rocketed up 149 per cent over a decade while mid-peak power has shot up 76 per cent and on-peak is up 71 per cent. By way of comparison, inflation in Ontario over the same period was only about 18 per cent. This has aggravated businesses and residential users and has helped plunge the premier’s popularity to below 20 per cent and two-thirds of Ontarians essentially disapprove of her job performance.

So what is the Ontario government doing now?

It’s spending more than $100 million (the federal government is handing over another $100 million) to help Ford Canada establish a research and development centre where it will develop a new V8 engine—which seems odd given the emphasis of current governments in both Ontario and Ottawa on energy efficiency and sustainability.

This is of course being sold as a boost for automotive research in Ontario and investment in advanced manufacturing. However, in reality it’s simply corporate welfare. And what’s worse, it’s corporate welfare subsidizing the activities that Ontario’s government has spent the last decade telling us are bad for the environment.  

It’s increasingly difficult to fathom how government on the one hand can make decisions that force a transition to more expensive power sources as part of a strategy of environmental sustainability, and then on the other hand continue to subsidize a sector that has been demonized as a source of polluting emissions and via its main product—the automobile—also been castigated as a generator of urban sprawl.

Moreover, these subsidies merely pile onto the other subsidies that have been effectively provided for producers of wind and solar energy via lucrative long-term contracts with high guaranteed prices.

Not only is the Ontario government engaging in the practice of corporate welfare, it is subsidizing activities at cross-purposes to one another. This is simply madness.


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