$7 Billion Energy Deal Needs Independent Review

Everyone should, on the surface, be excited about a $7 billion-plus investment in the Ontario economy.  At the same time, it is important to know the details.

Premier McGuinty announced last week an untendered, sole-source deal with Korea Power Electric Co. and Samsung. This is a 25-year deal to supply 2,500 megawatts of wind and solar power. The cost of the electricity is also a concern. Today we pay approximately 6 cents per kWh. This new green energy will cost 13.5 to 19 cents per kWh for wind and 44.3 to 80.2 cents per kWh for solar.  That is up to 10 times more. For example, if your electricity bill is $100 per month today, it could rise to $1,000 per month under the McGuinty government’s new green energy program.

I am also disappointed that the McGuinty government is partnering with offshore energy firms rather than looking to made-in-Ontario expertise in our own Durham Region. As Ontario’s energy capital, Durham Region is home to leading energy sector businesses, education and research facilities at University of Ontario Institute of Technology and the power plants at Pickering and Darlington.

Before Ontario contributes close to half a billion dollars towards this green energy deal, we need an independent review that will ensure the interests of taxpayers are protected.

Ontario taxpayers should be aware that there will be an incentive of over $450 million in the agreement. (It’s called an “economic development adder.”) It will add about $1.60 cents to a residential electricity bill over the lifetime of the contract.

Ontario PC Leader Tim Hudak said last week that Dalton McGuinty must call in Ontario’s Auditor General to review his multi-billion dollar energy deal. He added that Auditor General Jim McCarter should also be asked to ensure that the sole-sourced deal does not break Ontario’s procurement rules.

There are well-founded concerns over this government’s track record on energy contracts. In 2007, the Auditor General found that Ontario ratepayers will pay $1.5 billion more than they should thanks to a deal Premier Dalton McGuinty signed with Bruce Power. Everyone wants to see new investment and economic opportunities for Ontario citizens. What we also want is openness and certainty that the promises made are kept.

Ontarians to Pay More and Use Less Power

Smart meters are already installed in most Ontario homes and it’s only a matter of time before they are used for their intended purpose of charging Ontarians according to the time they consume electricity. Hydro One has recently told its customers that they’ll be switching to Time-of-Use (TOU) pricing beginning in 2010 and through 2011. TOU pricing means that what you pay for electricity depends on the time of day or day of week and varies with the season. Under Time of Use metering, rates would be 9.3 cents/kWh for power used during peak periods; 8 cents/kWh for mid-peak; and 4.4 cents kWh for off-peak consumption. You will be paying more.

Premier Shuffles Cabinet, But Game Unchanged

For the most part, nothing has changed as a result of the McGuinty government’s cabinet shuffle last week. Key architects of the tax-and-spend approach remain at their posts. In fact, by keeping Dwight Duncan as Minister Finance, Sandra Pupatello as Minister of Economic Development and Peter Fonseca as Minister of Labour, Premier McGuinty is not signaling any new direction in his economic plan.

Opposition Leader Tim Hudak had this observation on the cabinet shuffle: “It will take more than a fresh coat of cabinet paint to hide the fact that this is the core same team that delivered record job losses, a $25 billion deficit, a billion dollar eHealth scandal and a $3 billion HST tax grab.”

It is interesting to note the number of ministers who have disappeared from the cabinet table within the past year. These include Michael Bryant, George Smitherman and Jim Watson who had already resigned. Departures as the result of last week’s cabinet shuffle include Ted McMeekin, Donna Cansfield and Aileen Carroll. Some observers suggest that the departure of the Ministers last week is a sign that they are making plans to seek new opportunities rather than to run in the next provincial election of 2011.

One of the more significant shifts in the cabinet was in the agriculture portfolio. Carol Mitchell, who has no previous cabinet experience, was appointed from the ranks of government MPPs to become the new Minister of Agriculture. Leona Dombrowsky was shifted to the Education portfolio and the longtime Education Minister, Kathleen Wynne, was dispatched to the lower-profile Ministry of Transportation.

Summer Company Program Taking Applications

Students who want to create their own summer job by starting a small business are invited to apply online through Ontario’s Summer Company Program. You can learn more atwww.ontariocanada.com . Summer Company is for students 15 to 29 years old. If your application is accepted, you will be eligible to receive up to $1,500 to put toward start-up costs and up to $1,500 upon completing the program. The deadline is May 6.

Ontario Schools Have New Nutrition Standards

Candy, energy drinks and fried foods are among the items that will be “expelled” from Ontario’s schools, according to new standards that are expected to be fully in place by September of 2011.  Under the Healthy Food for Healthy Schools Act, 2008, 80 per cent of the new school menu must include products with the highest levels of essential nutrients and lowest amounts of fat, sugar and sodium. While I agree with these goals, I wonder what parents who make the lunches or teachers who supervise our children think.

I may be reached at 905-697-1501 or 1-800-661-2433 and at john.otooleco@pc.ola.org.