The Ontario government has removed the 8% provincial portion of the HST from your hydro bill, effective January 1, 2017, provided that your demand for electricity is 50 kilowatts or less; your annual hydro consumption is no higher than 250,000 kilowatt hours; or, you operate a farming business. While this rebate will provide some relief, it does not address the root causes of your skyrocketing hydro costs.
The government’s hydro initiatives announced on March 2 are expected to provide some additional short-term relief to many of Ontario’s small businesses and farms, starting June 1, 2017. However, this will come at the steep price of an estimated $1.4 billion in interest costs alone every year. Furthermore, the recent initiatives do not directly address key small business concerns, especially on time of use (Smart Meter) pricing. The government’s failure to focus now on fixing the real issues in the hydro system could end up costing Ontarians even more.
Please see our response to the government’s March 2 hydro announcement here. This summer, we will begin to verify whether small business hydro bills reflect the government’s promised reductions, and whether the promised reductions will be consistent and ongoing.
Affordable, predictable and stable hydro costs are a key component of keeping the province’s firms competitive in a global economy. Unfortunately, over the past three years, the vast majority of Ontario’s small- and medium-sized businesses (85 per cent) have seen hydro rates balloon, even though they’ve used the same amount of hydro and implemented energy-saving measures.
In fact, hard-working Ontarians have been punished for their conservation efforts with rate hikes to make up for the revenue shortfall resulting from consuming less energy.
CFIB continues to call on the Ontario government to address the core issues facing the energy sector and to better align energy policy with the realities of operating a small business.
When we met with the Minister of Energy in November 2016, we recommended that he and his government implement the following solutions:
- Eliminate all time-of-use (Smart Meter) rates for small businesses and implement a lower cost rate system on the first 3,000 kilowatt hours (kWh) of electricity consumed per month.
- Accelerate the removal of the Debt Retirement Charge from commercial hydro bills, which is currently slated for April 1, 2018.
- Require the display of the “Global Adjustment” fee on all hydro bills to increase transparency.
These ideas were well received by the Minister. We look forward to hearing more from the Minister on whether the government will act on them.
We expanded on these ideas in our Long-Term Energy Plan (LTEP) submission of December 15, 2016.
We launched an Action Alert to collect signatures from small businesses who are fed up with their high hydro costs and want government to act now on the suggestions we outlined to the Minister. Make your voice heard – sign the Alert today!