Electricity Prices in Ontario Increasing Faster than Household Income

How to Prepare for Your Post-Debt Life

What may have been well-known to Ontarians for years is now being backed up by a recent study: if you live in Ontario, your electricity bill will take a good chunk of change out of your budget.

The Fraser Institute recently published a study called “Evaluating Electricity Price Growth in Ontario” that contrasted the high costs of electricity in the province to the rest of Canada. It found that from 2008 to 2016, the price of electricity grew 71 per cent, while the average increase across Canada was 34 per cent. Within just a year-span from 2015 to 2016, electricity costs in Ontario increased by 15 per cent – more than double the national average growth of six per cent during the same period.

Rapidly growing hydro costs likely wouldn’t be such a concern if the economy was keeping up. However, from 2008 to 2015, electricity prices in the province rose 2.5 times faster than household disposable income in Ontario, and over four times greater than inflation and the GDP.

What major cities are spending on hydro

Using data compiled by Hydro-Quebec, the report also compares average monthly residential electricity bills (including taxes) in major cities – specifically for the typical household that consumed approximately 1000 kWh per month in 2016:

  • Montreal: $83.08
  • Winnipeg: $97.50
  • Calgary: $109.19
  • Vancouver: $114.68
  • Halifax: $166.80
  • Ottawa: $182.51
  • Toronto: $201.23

On average, the Canadian household spent $141 per month on electricity last year. This means, families in Ontario spent $60 more per month on average, or $720 more per year.

While it may not come as a surprise to some, Toronto proved to have the most expensive electricity bills, coming in at $201.23 per month.

Looking more at the province’s two major cities, the study reveals that those living in Ottawa paid about $41 more than the national average per month, and those living in Toronto spent about $60 more.

The starkest difference is seen between Montreal and Toronto, with Toronto spending $118.15 more per month or about $1420 more per year.

The cause of rising electricity prices

The Fraser Institute cites different renewable energy policies, bad long-term energy contracts, and exporting at a loss to other locations as possible reasons why Ontario’s electricity costs have inflated by so much. For example, the Green Energy Act was introduced in 2009, but the 2015 Auditor General’s report stated that consumers are paying $9.2 billion more for energy under new contracts for the renewable energy.

The province of Ontario also produces more energy than it can use, but generally exports any excess energy. This should, in theory, mean a profit for the province, but the Ontarian government is selling the energy for less than it costs to produce. So, in the end, it’s the people of Ontario who have to make up for the loss.

Late last year, Premier Kathleen Wynne admitted during the Ontario Liberal Party’s annual general meeting that the rising costs of electricity is the government’s fault, but promised it would be rectified.

Since then, the provincial government cut the eight-per cent provincial portion of the HST off hydro, and later announced the Fair Hydro Act, which would see an overall 25 per cent reduction in electricity rates this year in comparison to last, starting July 1.

Easy ways to save on hydro

While the provincial government seeks ways to cut down rising electricity costs, there are small changes we can make around the house to cut our own residential hydro bills.

Use less hot water

  • Take shorter showers, even if by just a minute.
  • Fix leaky faucets.
  • Turn the water off while brushing your teeth or shaving.

Go unplugged

  • Unplug electronics that aren’t used often. This could be a fan, an electric can opener, a video game console, the PVR, a juicer, etc.
  • Unplug or simply get rid of old refrigerators or TVs. Old appliances tend to use a lot of electricity in comparison to modern electronics that are built under new regulations to save a certain amount of energy.
  • Recycle the old desktop computer and go for a laptop.

Change the way you do laundry

  • Wash your laundry in cold water.
  • Cut the amount of loads you do per week by waiting until you have a full load.
  • Ditch the dryer and just hang dry your laundry.
  • If you still need to use the dryer, toss in a dry towel with the load to cut drying time.

Let there be (necessary) light

  • Turn off unnecessary lights and use natural lights. Opening a single south-facing window in the evening can make a big difference in lighting a room.
  • Turn off ceiling lights and go for lamps or under-counter lighting at night.

Minimize your central air and heat use

  • If you have electric heat and air conditioning, lower your thermostat during the winter or increase it during the summer by at least 2°C to start seeing savings.
  • Opt for long pants and sweatshirts instead of shorts and t-shirts during the winter. Remember, it’s not summer, even when you’re indoors. So dress comfortably, but warmly.
  • During the summer, close the blinds to block the afternoon sun from coming in and overheating the home.
  • Avoid using the oven as often during the summer as it heats your home as well.

Make changes in the kitchen

  • Keep the fridge between 2°C and 3°C and your freezer at around -18°C  for optimal efficiency.
  • Don’t use the heat-dry setting on your dishwasher.
  • Use the microwave for certain jobs instead of the oven.

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