Commission on the Reform of Ontario's Public Services

Chapter 12: Infrastructure, Real Estate and Electricity
While we understand that the government initiated the OCEB to help with the transition to
higher prices associated with the shift to cleaner energy supply, the program distorts true cost
of electricity and discourages conservation. In addition, we foresee that the sudden end to
such a generous incentive will be difficult if concluded as planned on Dec. 31, 2015, as it will
create a considerable price shock to ratepayers. We are wary of the possibility that the OCEB
would remain on the provincial treasury and thus risk Ontario’s ability to return to a balanced
budget in 2017–18. This is further complicated by the fact that the OEFC is not guaranteeing
that the Debt Retirement Charge (DRC) will be removed in lock-step with the OCEB,
suggesting this may not happen until as far out as 2018. 15 Any soft landing provided by
removing the cost of the DRC simultaneously with the expiry of the OCEB would evaporate if
such a delay were to occur.
Finally, the opportunity costs associated with the OCEB are substantial. The <strong>Commission</strong>
strongly believes there are more effective uses for the over $1 billion per year spent on this
initiative. The <strong>Commission</strong> would be satisfied with a gradual phase-out of the OCEB. However,
a more aggressive timeline or an immediate cease to the program would be welcomed.
Recommendation 12-10: Eliminate the Ontario Clean Energy Benefit as quickly as possible.
Although the OCEB is the largest electricity rate subsidy in Ontario, it is not the only one.
A number of programs target specific customer types (e.g., small or large volume) or certain
areas of the province. Each of these initiatives may offer relief to consumers in terms of energy
costs (electricity, gas, oil, diesel, etc.), but over time could discourage conservation, leading to
higher costs, and should periodically be revisited to ensure they are meeting policy goals and
represent value for money.
Recommendation 12-11: Review all other energy subsidy programs against measures of
value for money and achievement of specific policy goals.
15 Ontario Electricity Financial Corporation, 2011 Annual Report, p. 2.
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