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Why does Ontario's electricity cost so much? A reality check

Ontarian pay steeper rates for their power than any other province, and a decade's worth of policy choices have made it that way. Adrian Morrow and Tom Cardoso address the key questions about how we got here and what the province could do to fix it


Electricity prices in Ontario have soared in the past decade. Since 2006, the top rate for power has risen four times as fast as inflation.

The problem has aggravated voters, piled on costs for business – particularly factories and other industrial enterprises – and remained one of the most persistent hot buttons for the province's politicians.

Facing record-low approval ratings, Premier Kathleen Wynne last September announced an 8-per-cent subsidy for residential and small-business bills, which took effect Jan. 1.

How did we get here? How high are electricity prices exactly? How does Ontario compare with other jurisdictions? And what can we do to drive rates down?

The short answer is that a series of policy decisions – most significantly, upgrading infrastructure and signing fixed 20-year deals with private companies to produce electricity – have increased prices over the past decade.

It hasn't helped the government that a series of controversial decisions, such as cancelling two gas-fired power plants for political reasons and privatizing Hydro One, have intersected with electricity policy and attracted blame for the high prices. While the cancellation of the plants has driven up rates, it's a relatively small part of the overall increase; the Hydro One privatization, meanwhile, has not yet had an effect.


Ontario's electricity prices are far higher than those in the rest of the country. Quebec, for example, enjoys rates less than half of those in Ontario. The international picture is more complicated. Ontario rates are generally significantly lower than those across the border in New York and about half what Germans, Danes or Italians pay.

The bad news, for consumers and the government, is that rates likely will not be coming down any time soon.

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