Here’s a hot issue that Tim Hudak thinks will bring down the Ontario government: Higher hydro bills.
And here’s the Tory leader’s bizarre pitch to bring those bills down: Stop collecting for our hydro debt, by brazenly declaring it paid in full — even though it’s still there.
Ignoring our debts is a strange notion coming from Ontario’s once-proud Progressive Conservatives. But Hudak has calculated that by profiting from voter frustration, and banking on voter folly, he can cash in on voting day, Oct. 6.
His plan is a scam — a classic tale of buying votes with taxpayers’ money. And a parable of how elections are won in an era of short attention spans.
A warning to readers: The PCs are counting on you tuning out the details.
So test yourself: You can read on — and see how the Tories toy with you. Or stop here — and prove the PCs are right that people won’t follow the fine print.
Look at your hydro bill. You may have noticed a monthly “Debt Retirement Charge” (DRC) that averages $5.60 per household. Hudak promised last month to eliminate it from residential bills — saving ratepayers about $76 a year after taxes. What’s remarkable about the Tory strategy is that the DRC monster they now pledge to kill off is a Frankenstein of their own creation — dreamed up by the old Mike Harris PC government in 1999.
The Harris Tories wanted to privatize Ontario Hydro, but had to off-load its old debt of $21 billion. They conjured up a Byzantine road map for repayment: Its successor companies (OPG for power generation, and Hydro One for transmission lines) would allocate all their future revenue and tax streams to help pay down that debt. Unfortunately, all that projected cash flow — estimated at $13 billion — still wouldn’t cover off the massive debt payments, leaving a yawning gap.
So the Harris Tories came up with an even more exotic financial concept, virtually unheard of at the time: the “Residual (leftover) Stranded Debt.” Sounds like a complex accounting concept, but it was really a financial fig leaf for a pile of unsustainable debt to be backstopped by hydro ratepayers (customers). This portion — the (leftover) unfunded liability — came to $7.8 billion, which is now supported by the DRC on your monthly bill.
As their Hydro privatization plans went awry and deregulation created chaos, the PCs panicked — freezing electricity rates and allowing the hydro debt to soar. When the electricity sector became politically toxic for the Tories, they lost power in 2003. The incoming Liberals started paying down the inherited debt, which slowly declined but is far from paid off. Now, the Tories hope to regain power by promising to drop the DRC from your bill — delaying the day of reckoning as they did in the past. History is about to repeat itself.
Full Article
Source: Toronto Star
And here’s the Tory leader’s bizarre pitch to bring those bills down: Stop collecting for our hydro debt, by brazenly declaring it paid in full — even though it’s still there.
Ignoring our debts is a strange notion coming from Ontario’s once-proud Progressive Conservatives. But Hudak has calculated that by profiting from voter frustration, and banking on voter folly, he can cash in on voting day, Oct. 6.
His plan is a scam — a classic tale of buying votes with taxpayers’ money. And a parable of how elections are won in an era of short attention spans.
A warning to readers: The PCs are counting on you tuning out the details.
So test yourself: You can read on — and see how the Tories toy with you. Or stop here — and prove the PCs are right that people won’t follow the fine print.
Look at your hydro bill. You may have noticed a monthly “Debt Retirement Charge” (DRC) that averages $5.60 per household. Hudak promised last month to eliminate it from residential bills — saving ratepayers about $76 a year after taxes. What’s remarkable about the Tory strategy is that the DRC monster they now pledge to kill off is a Frankenstein of their own creation — dreamed up by the old Mike Harris PC government in 1999.
The Harris Tories wanted to privatize Ontario Hydro, but had to off-load its old debt of $21 billion. They conjured up a Byzantine road map for repayment: Its successor companies (OPG for power generation, and Hydro One for transmission lines) would allocate all their future revenue and tax streams to help pay down that debt. Unfortunately, all that projected cash flow — estimated at $13 billion — still wouldn’t cover off the massive debt payments, leaving a yawning gap.
So the Harris Tories came up with an even more exotic financial concept, virtually unheard of at the time: the “Residual (leftover) Stranded Debt.” Sounds like a complex accounting concept, but it was really a financial fig leaf for a pile of unsustainable debt to be backstopped by hydro ratepayers (customers). This portion — the (leftover) unfunded liability — came to $7.8 billion, which is now supported by the DRC on your monthly bill.
As their Hydro privatization plans went awry and deregulation created chaos, the PCs panicked — freezing electricity rates and allowing the hydro debt to soar. When the electricity sector became politically toxic for the Tories, they lost power in 2003. The incoming Liberals started paying down the inherited debt, which slowly declined but is far from paid off. Now, the Tories hope to regain power by promising to drop the DRC from your bill — delaying the day of reckoning as they did in the past. History is about to repeat itself.
Full Article
Source: Toronto Star
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