LEGISLATIVE ASSEMBLY OF ONTARIO
ASSEMBLÉE LÉGISLATIVE DE L'ONTARIO
Tuesday 17 June 2003 Mardi 17 juin 2003
Tuesday 17 June 2003 Mardi 17 juin 2003
The House met at 1845.
ORDERS OF THE DAY
ONTARIO ENERGY BOARD
CONSUMER PROTECTION
AND GOVERNANCE ACT, 2003 /
LOI DE 2003 SUR LA PROTECTION
DES CONSOMMATEURS ET LA RÉGIE
DE LA COMMISSION DE L'ÉNERGIE
DE L'ONTARIO
Resuming the debate adjourned on June 16, 2003, on the motion for second reading of Bill 23, An Act to amend the Ontario Energy Board Act, 1998, and the Municipal Franchises Act in respect of consumer protection, the governance of the Ontario Energy Board and other matters / Projet de loi 23, Loi modifiant la Loi de 1998 sur la Commission de l'énergie de l'Ontario et la Loi sur les concessions municipales en ce qui a trait à la protection des consommateurs, à la régie de la Commission de l'énergie de l'Ontario et à d'autres questions.
Mr John O'Toole (Durham): It's my pleasure tonight to speak with respect to Bill 23. For those viewing and those listening to the few members who are here, Bill 23 is An Act to amend the Ontario Energy Board Act, 1998 ... in respect of consumer protection, the governance of the Ontario Energy Board and other matters.
Actually it's quite interesting. In preparing my remarks tonight, I went through Bill 23 and found it to be affecting a number of pieces of legislation in its nature, more specifically the Municipal Franchises Act, as well as the Ontario Energy Board Act, 1998. I really think you have to look at this in context. I know the outgoing chair, Floyd Laughren, with the resources and the mandate he had at the time, did yeoman's service and, I believe, did the best that was possible under the circumstances in a very dynamic marketplace.
The Ontario Energy Board, I think under the leadership of the Minister of Energy, the Honourable John Baird, introduced this bill on May 6. I believe it's a bill that's aimed at making this, as is said in the legislation, specifically a very consumer-protecting and consumer-oriented piece of legislation. It certainly is my honour to speak on this bill.
The procedures and initiatives undertaken to improve the services of the Ontario Energy Board will contribute to increased consumer assistance and a greater public information contribution by the Ontario Energy Board, as those persons know that the energy market needs to have a very strong and effective voice under the able leadership of the incoming chair, Howard Wetston. His long and distinguished service, both on the bench and, more recently, on the Ontario Securities Commission, will serve him well. He certainly is the capable navigator, if you will.
I'd like to take a moment and acknowledge the Premier and of course our Minister of Energy, as I have already, for recognizing the need to improve the process and meet the responsibilities for change at the Ontario Energy Board.
As you heard, on October 7, 2002, Premier Eves ordered a review of the function of the Ontario Energy Board and Minister Baird committed to conduct a review and report back to cabinet within 100 days.
1850
That review was an extensive consultation process. I should say to you on the record that Mr Baird came to my riding, met with some eminent leaders in the energy field -- senior executive people, mostly former members of OPG, then Ontario Hydro -- and I think I could comment very fairly in saying they came away very impressed with Minister Baird's carriage of this particular piece of legislation.
The Ministry of Energy posted a consultation paper on their Web site and received a large number of responses. I participated in that process myself by arranging a community meeting. In addition, Mr Baird met personally with a wide range of energy stakeholders, groups and organizations. Submissions were presented, consultations were undertaken, views were offered and opinions were shared. I might say, in the most fair-minded way, we wanted to make sure that consumers' interests were matched and that the industry mandate was there and was up to the challenge that lay before us with respect to the market in the energy field.
Throughout these hours of dialogue, the government listened to the people of this province. They indicated that they wanted more information on energy matters. They told us they wanted input into the hearings process. They expressed their desire for decisions made in meaningful time frames, effectively eliminating retroactive charges. The issue of retroactive charges has reared its head over the last while, more recently in the natural gas field, and certainly the minister has heard that. They spoke, we listened and we acted. Bill 23, the bill we're discussing tonight, is the result of those discussions.
In bringing forward this legislation, it is incumbent on us to understand the role of the Ontario Energy Board. Therefore, I'd like to take a few moments to highlight for my colleagues on all sides of the House the functions and duties of the Ontario Energy Board and how this proposed legislation would improve this very vital and important organization.
The Ontario Energy Board is an independent body with regulatory oversight of both natural gas and electricity matters. It provides advice on energy matters referred to it by the Ministry of Energy, as well as the Ministry of Natural Resources.
In the electricity sector, the board is guided by a number of objectives. It would suffice here to suggest the five issues that I'm aware of: (1) to facilitate competition in the generation and sale of electricity and facilitate a smooth transition to competition; (2) to protect the interests of consumers with respect to price and the reliability and quality of electricity service; (3) to promote economic efficiency in the generation, transmission and distribution of electricity; (4) to facilitate the maintenance of a financially viable electricity industry; and (5) to promote energy conservation and energy efficiency.
I would have to say that Steve Gilchrist, as the minister in charge of alternative energy -- I think that's it -- is certainly charged with the broader issue of conservation as well as efficiency. I know that in our more recent budget remarks there was a commitment, on behalf of the people of Ontario to save energy.
As I previously noted, the Ontario Energy Board also has regulatory oversight for natural gas in our province. The board's objectives in this area are as follows: (1) to facilitate competition in the sale of gas to users; (2) to maintain just and reasonable rates for the transmission, distribution and storage of natural gas; and (3) to promote energy conservation and energy efficiency consistent with the policies of the Ontario government.
Consumer protection is one of the most important functions of the Ontario Energy Board. To ensure an adequate level of consumer protection in the energy market, the board has developed codes of conduct for gas marketers and electricity retailers and has established a complaint resolution process for energy consumers.
In the energy sector, the board sets transmission and distribution rates and approves the budget and fees of the Independent Electricity Market Operator, often referred to as the IMO -- budget and fees. In addition, the Ontario Energy Board licenses all market participants including the IMO, generators, transmitters, distributors, wholesalers and retailers. The board also monitors markets in the electricity sector and reports to the ministry on the efficiencies, fairness, transparencies and competitiveness of the market, as well as reporting on any abuse or potential abuse of market power. The board may also be asked to review the IMO rules and market rules and consider appeals for IMO orders.
In the natural gas sector, the board regulates Ontario's natural gas utilities, which are required to submit the rates they propose to charge their consumers to the board for review and approval.
The Ontario Energy Board licenses all markets that sell natural gas to residents and small commercial consumers. Board approval is also required before a natural gas utility can sell its distribution system or amalgamate with other distributors. The Ontario Energy Board was established over 40 years ago and, as I have just outlined, has since that time been responsible for numerous important aspects of Ontario's energy sector. It has changed with time and adapted with circumstances. It has evolved and expanded, and it has served us well. However, with time comes the opportunity for refinement and improvement, and that is what Bill 23 is all about. I hope the viewers and those listening tonight see, as I've outlined, the strengthening of the role of the Ontario Energy Board.
I would say, most importantly, these proposed changes would ensure that the interests of the consumer are first. This government believes that an informed consumer is indeed a protected consumer. We believe that an informed consumer is a well-served consumer.
The Ontario Energy Board has up to eight full-time members, including a chair and vice-chair, plus a number of part-time members. Traditionally, the members have been appointed for a three-year term. We heard from consultations with the various groups and stakeholders that there needs to be more stability and consistency on the board. As a result, this proposed legislation, Bill 23, would set board member terms for an initial two-year period, with renewal terms of up to five years. With the messages we received and the action we have taken, this initiative would allow for the stability and consistency in the structure required for optimum management of the Ontario Energy Board.
Another concern raised during the consultation was the area of the board's day-to-day operations. Bill 23 would establish a management committee comprising the chair and two vice-chairs. The management committee would oversee the board's performance, the fee structure and the resources needed. This would then enable the board members to concentrate their full attention and energy on the important work of the hearings.
The review and consultation process provided the chance to strengthen and tighten the functions and duties of the Ontario Energy Board with a view to better serving the energy consumer. First and foremost is the protection of the consumer of energy. Bill 23 would allow for improved consumer protection and support, for example, by clustering interested parties and arguments together so that hearings are streamlined, with the same or similar points grouped together more effectively to strengthen the arguments and the decisions being made.
The Ontario Energy Board has regulatory oversight over both natural gas and electricity matters in this great province, as I've said before, and it is apparent that there have been differences in the regulatory process for natural gas and electricity. Bill 23 would examine ways to level the playing field and harmonize the powers of the Ontario Energy Board in order to eliminate these differences whenever possible and to streamline the regulation of both electricity and natural gas, which just makes common sense.
1900
In reviewing the possibility for improvements, the minister -- and in the board's procedures, we heard that there should be more focus on goals and outcomes. Under Bill 23, the board would establish an annual regulatory calendar with a statement of priorities. This would allow increased accountability and enhance, once again, consumer service and protection.
Bill 23, the proposed legislation, would require the board to promote greater communications within the electricity and natural gas industry groups as well as education of the consumer. As I stated earlier, this government believes that an informed consumer is indeed a protected consumer.
As the board's decisions have a far-reaching and significant impact on the citizens of our great province, we feel the Ontario Energy Board owes it to the consumers to communicate what it is doing in an effective, concise and consistent manner. As Minister Baird has previously stated -- and I listened very respectfully and at some length last night to him and Commissioner Gilchrist -- effective communication must be a priority for the board. The provisions in the proposed Bill 23 would allow for better information, thus giving people an opportunity to plan for themselves and their organizations.
We understand that energy is important to our lives and our economy. The protection of all consumers has been and continues to be a priority for the OEB. The board protects the interests of consumers with respect to price, by ensuring the reliability and quality of electricity and gas services and by maintaining just and reasonable rates for the transmission and distribution of electricity and natural gas and for the storage of natural gas.
The hearings, submissions and consultations told us that consumers wanted increased protection and safety. Bill 23, if passed, delivers on that very wish to protect consumers from excessive rate impacts of retroactive charges. This was a controversial issue. Bill 23 would require that every three months the board order how and whether amounts recorded in deferral or variance accounts must be reflected in gas or electricity commodity rates.
We all know the decision of the retroactivity charges that became a problem for party members from all sides of the House. This bill, Bill 23, deals with this is in a more timely manner. Furthermore, deferral or variance accounts not related to commodity rates must be reviewed every 12 months, or a shorter period if required by regulation. In addition, the board shall consider the number of billing periods over which such amounts must be divided in order to mitigate the impact on the consumer. That seems a fair and reasonable approach.
The consultation was, as I said before, exhaustive, extensive and inclusive. Concerns were heard and concerns were addressed. This proposed legislation of the Ontario Energy Board Consumer Protection and Governance Act reflects the input we received and our government's commitment to resolve the issues.
In closing, let me acknowledge the hard work of the dedicated staff of the Ontario Energy Board and the outgoing board, and recognize the record of service to the citizens of the province over the past four decades of the Ontario Energy Board. The changes and improvements of this proposed legislation will enhance and strengthen the operational tools of the board and allow the individuals of the Ontario Energy Board to better continue the traditions of service to the community and to the future.
We all know the importance of energy in our homes, in our communities and in the markets that keep this community strong. In reflecting, I heard the Premier respond today to a question from the NDP member from Sault Ste Marie that he understands the importance of the marketplace and the place of energy in that.
I do want say that over the last few months and years I've actually participated on some of the energy issues and find myself being far more educated on the issues, but I believe the member from Renfrew-Nipissing-Pembroke, perhaps the next speaker for the opposition party, has a greater history in this, and I'm very eager to listen to his response to Bill 23.
Some listening tonight would know that the Macdonald commission started to analyze the role of all the stakeholders -- the generators, the transmission, the distribution and the regulators of the energy market -- and realized that we had been in every respect subsidizing energy for many years. The select committee on nuclear looked at that generation component and the arguments, the capital commitments and the investments over time in that area, and we're seeing that play its way out now.
Certainly under Bill 35, and the role of the generators, the transmitters and other stakeholders in the community, and with Mr Gilchrist's significant work in the creation of alternative new, sustainable energy forms, there's more work to be done, which emphasizes the strengthened role and the necessarily strengthening role of the Ontario Energy Board.
I believe this government, under Minister John Baird and the leadership of Premier Eves, is on the road ahead, is on the right track. Having a strong regulatory body like the Ontario Energy Board under the able and respected leadership of the new incoming chair, Howard Wetston, I believe the consumers will be the winners at the end of the day as we restructure the issues around energy and the price of energy that consumers, businesses and individuals pay.
I urge all members to listen, to examine Bill 23 closely and to recognize that it's the right thing to do. We've just got to take the time to understand that now is the time to move forward on this very important establishment of the Ontario Energy Board for the consumers of this province.
The Acting Speaker (Mr Michael A. Brown): Questions or comments?
Mr David Ramsay (Timiskaming-Cochrane): Thank you very much, Mr Speaker, and I certainly know one of the reasons we're here tonight discussing this piece of legislation -- and I'm sure you're well aware and many members of this House are -- because last September or late August, in our mail in our constituencies we received a letter from Union Gas. It said, "We're putting through an application, and think we're going to get approval of it in a couple of weeks, to get a retroactive rate increase for gas that was consumed by gas consumers in your constituency two years ago. We just want to let you know that this is what we're doing."
I immediately wrote the past chair -- who has been mentioned here, and who I think had done a good job on the energy board -- and certainly the Premier about this, understanding exactly what the reaction was going to be. Within a few months, as people got their notices through their gas bills that this company, unlike any other consumer provision company, was able to charge for a product that was consumed and paid for in good faith at an approved and agreed-upon price by this government agency -- to be able to come back and retroactively charge again for that product just got people so angry. That provision should be absolutely struck out of the board's mandate. That never, ever should be allowed to happen again.
The companies need to come before the board and plead their case as to exactly what they should be charging for the product. The rate should be set by the board for all the people of Ontario, and that is it. Once the people have consumed and paid for that product, never again should the board approve a retroactive rate increase for those gas companies to go back and get more money for that product.
Ironically, Union Gas is owned by a very large multinational company in the United States that made a multi-billion dollar profit last year, that didn't need this extra money at all, only to enrich Duke Energy, only to enrich their shareholders' pockets. This piece of legislation had better cover that for sure, because that is something that angers the people of Ontario, and I understand that it doesn't.
Mr Gilles Bisson (Timmins-James Bay): I'm interested in a couple of comments in regard to the honourable member's speech. As you know, we reported earlier today that yesterday Tony Martin and I were on the commencement of a northern tour in regard to what has happened to the northern economy. We were in the communities of Wawa, White River and Dubreuilville. Some of the comments he makes are interesting, because they really miss the point altogether.
For example, in Wawa, one of the things we heard was from a municipality, which said that when the government made the original changes to the Energy Act, one of the things they did was that they exempted power utility companies from having to pay municipal taxes for infrastructure that they own within a community. For the town of Wawa, that means the power dams they had within their municipal boundaries are now no longer taxable, which means a $2-million loss of revenue for the municipality as a result of the government basically giving a huge gift to the corporate entities that are now in the energy market. They said, "You know what? You don't have to pay it." I say, when we have natural gas facilities within our communities, they have to pay municipal taxes on the infrastructure they have.
1910
It's interesting that the government, in setting up their privatized, deregulated hydro model, basically decided what they were going to do was give those corporations a gift. They say, "You don't have to pay municipal taxes," on the backs of those communities. I think that's rather unfair and unfortunate.
As we go around and talk to communities like Smooth Rock Falls, or operators in Cochrane or White River, wherever it is, they're all saying the same things. Your electricity deregulation and privatization is nothing but a disaster. Talk to the people at River Gold in Wawa. They're saying their hydro prices have gone up to the tune of $200,000 last year. Talk to the people in Dubreuilville -- a 75% increase in power bills. They can't afford to operate at those costs, and they're laying people off. It's nothing but an unmitigated disaster.
Hon John R. Baird (Minister of Energy, Minister responsible for francophone affairs, Government House Leader): I listened with great interest, as I always do, to the member for Durham. The member for Durham is always interested in energy issues. He represents probably one of the largest energy-generation facilities in North America, the Darlington nuclear plant, and takes a huge interest in the energy side of the equation. He looks after worker health and safety issues, he is concerned about the other Pickering initiative, and he pays a lot of attention to this. I've been impressed with the member and his interest in consumer protection. He's always looking out, whether it's for the residential consumer, someone who operates a small business or an industrial consumer. He has a substantial amount of experience as an executive at General Motors, and they are of course one of Ontario's biggest electricity consumers.
Whether it's the residential customer or General Motors, they depend on a regulatory regime that is a fair balance between consumer interests and return on investment that's fair and reasonable. The Ontario Energy Board, much as my colleague suggested, has to be that marketplace, in place of a market where it operates as a monopoly. Of course, it has to be there to provide consumer protection and ensure that the market rules are followed. The honourable member's remarks are a good contribution to this debate.
I say this because I am awaiting with great interest the speech from my colleague from eastern Ontario, Mr Conway. I'm awaiting his remarks. I hope he's going to look at this great bill and want to support it at second reading.
Mrs Leona Dombrowsky (Hastings-Frontenac-Lennox and Addington): I am happy to have an opportunity to make some comment on this bill this evening. I have to say that in my constituency office, energy issues certainly did consume a great deal of energy on the part of my staff.
Three of the areas that were of great concern in Hastings-Frontenac-Lennox and Addington were around consumer protection, and I would say to the minister and to the members of the government that you are late with this. It's like locking the barn door after the horse is out. Folks in my riding were fooled, duped and persuaded to sign agreements that were not in their best interests, and then those folks ended up calling a number of people, and many of them called my office for assistance to try and get out of those deals. So I think now consumers are more wary of who they allow into their home and what they sign, before they do that.
Another concern that I hear a great deal about in my office is delivery charges for energy. I had a gentleman send me his hydro bill. The actual energy charge on his bill was $69, and his total bill was $159. The difference was made up of interest charges, various taxes and delivery charges.
The third issue that I hear a great deal about in my riding was when the natural gas company sent its customers notification that they would be responsible for retroactive payments. People believe that this is bad-faith business, that they had paid their bills in good faith with an understanding that that was what they owed, only to find out some time later that they were going to be billed again for that energy. There is no protection in this act to address that or some of the other concerns of folks in my riding that I've mentioned. I hope the government is paying attention to that tonight.
The Acting Speaker: Response?
Mr O'Toole: I do appreciate the member from Timiskaming-Cochrane as well as the members from Timmins-James Bay and Hastings-Frontenac-Lennox and Addington and of course, very respectfully, the Minister of Energy here listening to this important debate tonight -- always on the job; the lights are always on. Actually, he's burning a bit too much energy.
The two issues I heard in the response were the retroactivity charge as well as the consumer protection. Both of these issues are strongly addressed in this legislation.
I think it's important to address the retroactivity issue. I think it's important, because I am looking at Bill 23. In the bill it says it is to protect consumers from excessive rate impact of retroactive charges. Bill 23 would require that every three months the board order how and whether amounts recorded in deferral or variance accounts must be reflected in gas or electricity commodity rates. So I'm pleased with those comments, that the members opposite will be supporting, as I understand it, Bill 23.
Being that their role is to be in opposition, I understand that they'll raise lots of issues. But the minister has said repeatedly that this bill technically is a consumer protection bill. I do want to conclude in the few remarks remaining that the member from Hastings-Frontenac mentioned consumer protection as well. I think the minister addressed it in his remarks, and certainly last night.
Many of the remarks I was asked to make tonight dealt with consumer protection.
In my final remark, I served on a couple of committees with Floyd Laughren when he was a member here. He then went on to serve in a very difficult time on the Ontario Energy Board. I'd like to publicly say that I know and respect Floyd. In the role and in the time he was there, I think he did a yeoman's job. I look forward to Howard Wetston. Out of respect, I think we should thank these people who serve the public for that.
The Acting Speaker: Further debate?
Mr Sean G. Conway (Renfrew-Nipissing-Pembroke): I'm pleased to join the second reading debate of Bill 23, an act respecting the Ontario Energy Board Act. I hope I will be excused somewhat if, in my remarks tonight, I reflect on a debate just about this time of year five years ago. My friend from Durham, Mr O'Toole, will remember when we were last seized of this matter with Bill 35, the so-called Energy Competition Act.
I want to say to the Minister of Energy, who's here tonight and who asked earlier this evening during the break where my colleagues were with this bill, that quite frankly my colleagues have some concerns about the bill; to be truthful, not so much about the mechanics of the bill, although there are some issues there, but as to the will of this government insofar as carrying out the stated intentions of the bill.
You might say, "Well, why such skepticism?" Well, I think the skepticism is justified on the basis of what was promised five years ago when we last dealt with this matter and all of the misery and pain and misadventure that has been foisted on unsuspecting electricity consumers in the intervening five years.
Let me say fairly and honestly to the government and to my colleagues in the opposition, it would not be a fair or reasonable thing to blame it all on the government, because in some respects there were aspects that no fair-minded, not even clairvoyant, individual could have imagined.
But I listened to some of the earlier speakers this evening, and I have acquainted myself with the debate of yesterday, when second reading began on this particular legislation, the Ontario Energy Board Consumer Protection and Governance Act, 2003. I must say that some of what I heard earlier tonight and read from yesterday's debate is precisely that which was promised five years ago. To many consumers, sad to say, we promised the moon and we delivered a thin slice of rancid cheese. I hope and I pray that we will have a better batting average going forward. I'm not going to be here to assess it, but I do expect that members on both sides of the aisle here tonight -- at least some of them -- will be here three to five years forward, when perhaps you will be reviewing this again.
1920
Let me say generally, but let me say directly, to all my friends on both sides of the aisle, the electricity question specifically is going to follow you, is going to challenge you, is going to haunt you, is going to bedevil you for as many months and several years into the future as I can imagine. I wish it were otherwise. I hope I am wrong. I cannot imagine a file that is going to be more important and more difficult for the provincial government in Ontario and the provincial Legislature than the electricity file in the next few years.
I reflect tonight, as I look at the intent of Bill 23, on where we were five or six years ago, when the then-Harris government endeavoured to meet the challenge of the electricity sector. I want to say this tonight: the essential problems that confronted Mike Harris, Ernie Eves and Jim Wilson in 1996-97 -- and you will all remember, those of you who were here, the conditions in August 1997. Remember those days? I think it was August 12. There was a big press conference. Bill Farlinger, the then-chairman of Ontario Hydro, was calling people together and saying, "It's a mess. It's a bigger mess than you could imagine." The nuclear power division of Ontario Hydro, which at the time represented over 50% of the generating capacity of Ontario's electricity system, was in dire straits. Mr Farlinger said at the time, quite remarkably, that the place was run by a "nuclear cult." He said that we couldn't continue. The old order was at an end, and the economic and social well-being of the province was in jeopardy if we did not make serious and structural change.
I would not have used the language that Mr Farlinger used, and I think there was, to use the language of today, a certain torquing of the problem. But make no mistake about it, a real and serious problem existed then, and in my view it is no less serious, no less pressing and no less challenging today than it was then.
I think it is useful to recall what the basic challenge is. The basic problem we've got in the electricity system, which the Ontario Energy Board -- approved by Bill 23, apparently -- is going to manage and supervise and regulate, is supply. We are confronted this summer with the prospect of several emergency generators being set up in eight or nine communities across Ontario -- the last time I checked, at a cost estimated to be something in the neighbourhood of $100 million -- to give us a standby emergency capacity if, as and when they're all installed, of something slightly more than 405 or 410 megawatts.
That is where we are today. We are at a point today where we need to put in place emergency natural-gas-fired generators in places like Kitchener and other communities -- Toronto -- to keep the lights on should we face, as some predict we might under certain conditions, power shortages to the point of brownout or blackout. That's where we are.
Now, I can't honestly stand here, and I don't intend to stand here tonight, and say to my colleagues or to the viewing audience that I have any magical answers; I don't. And you know what? There aren't any. All of us and all of you are going to have to come to terms with that reality. This is a debate -- and I'll be saying this probably for the last time -- that has been driven by altogether too much faith, hope, ideology and theology and, in my view, not enough honest, hard-headed practical reality. I can understand, Catholic that I am, the interest in and the predilection to faith, hope and whatever else.
Hon Mr Baird: Ideology and theology.
Mr Conway: The minister says "ideology and theology." That's not what I said in this particular sentence.
On Saturday night I watched Robert K. Rae, QC, being interviewed by Graham Richardson on Focus Ontario. I don't know how many of you saw the interview. I don't know whether my friends from Sault Ste Marie and Timmins-James Bay saw the interview. It is obvious that former Premier Rae is now unencumbered by the burdens of office and, being the Pearsonian Liberal that he always has been, basically told Mr Richardson and the viewing audience what he thought. What did he say? "I don't think it's a good idea to subsidize hydro rates. I mean, that's just dumb. It's dumb public policy, and to extend it for two or three years makes absolutely no sense."
Hon Ernie Hardeman (Associate Minister of Municipal Affairs and Housing): If the Bob Rae government had done that, we wouldn't have had that debt.
Mr Conway: Well, my friend from Oxford says that if every government had done it, we wouldn't have the terrible debt. More on that in a moment.
Again, Mr Rae on Focus Ontario on Saturday night says, "Well, right now the big problem here in Ontario is supply." He goes on to basically say, "We don't have enough domestic supply." In fairness to Mr Gilchrist in the debate last night, as I read the Hansard, he made a reference to that as well, the importance of domestic, Ontario-based electricity supply. That's the challenge; make no mistake about it. That's over 50%, or at least 50%, of the cost of a typical hydro bill, the cost of producing the electricity. In terms of Ontario's current situation, a lot of our trouble and most of our debt arises out of a very substantial nuclear power commitment that, while not all bad, certainly turned out to be a lot more complicated and challenging than anyone ever imagined.
But I want to --
Interjections.
The Acting Speaker: Order.
Mr Conway: I want to say to anybody who cares to listen -- and I don't mean to be difficult, because I know we're going to be out of here, and I'm going to be out of here for good soon -- that the challenge we are going to face is the supply challenge, and it is a very serious one. Our friend from Niagara Falls is here tonight and he, like several others I know, is aggressively championing Beck 3. Good for him. That, I think, will give us, if we're lucky, 600 or 700 megawatts of hydroelectric power. I haven't checked those numbers lately. They may be off a bit.
The Independent Market Operator told us a few weeks ago that in the next 10 to 12 years we in Ontario are going to require -- get this -- between 10,000 and 15,000 megawatts of electricity basically to replace a lot of supply that's going to go out of service in that next decade or decade and a half, and that does not take into account the growth pressures that are there, happily, because we're a growing province with a growing economy.
Ten thousand to 15,000 megawatts of new electricity capacity. Where are we going to get that? That's what the energy board, newly mandated with the passage of Bill 23, is supposed to regulate. Where are we going to get that, my friends?
I read with some interest two articles.
Mr Marcel Beaubien (Lambton-Kent-Middlesex): Windmills.
Mr Conway: Did my friend from Lambton say "windmills"? Well, let's hope there are going to be windmills. I do. I agree with those, and I think maybe Mr Gilchrist said it last night. I have said for some time that I think there should be a mandated renewable portfolio standard in Ontario's electricity policy, as there is in many other jurisdictions in North America and in western Europe. I hope windmills are an important part of that renewable portfolio standard.
1930
Let me give you one example. How many of you have driven the Lakeshore recently and have seen the windmill operated, I think, by Toronto Hydro out on the west side of Toronto? The last time I checked, Toronto Hydro -- and I might stand corrected but I don't think I'm wrong on this -- said they were putting power into the grid from that windmill at between nine and 11 cents a kilowatt hour. We are asking and expecting consumers today to pay a rate of 4.3 cents a kilowatt hour.
Windmills: I say to my friend from Oxford, absolutely. How could I, of all people, be opposed to wind power? But wind power at a price of nine to 11 cents a kilowatt hour? What's the shopkeeper in Pembroke, the farmer in Lambton or the lawyer in Nepean going to say when he or she sees 4- or 5-cent power replaced by 10-cent power, even if it is as virtuous as wind power? I will say as well, there is a niche market out there that will pay a premium price.
Let us not kid ourselves. Ernie Eves went to Mississauga last November to offer up the cap of 4.3 cents because he felt what all of us politicians felt through the summer and fall of last year: he felt the real and pressing political pain of price. That's why Mr Eves did what I suspect just about any leader of any government in Ontario would have done a version of at that time. It was, I think, about price.
Mr Speaker, I read with interest your comments last night about Wawa and the franchise area of Great Lakes Power, where you have observed and other members have observed that in the last year, the transmission and distribution part of the consumer bill for those 11,000 or 12,000 consumers served by Great Lakes Power, a private power company that's been in business in this province for nearly a century up in places like Wawa, Dubreuilville and Algoma district, has increased -- by what? -- 50%, 60%, 70%. Some relief offered in recent times, to be sure, but let me tell you, I see where the Wawa Legion -- did you tell us last night, Mr Speaker? -- now has a monthly electricity bill of $3,200. For those of you who know service clubs in small towns or large cities, can you imagine a service club like a Legion in a small community with a monthly electricity bill of 3,200 bucks? I'll bet you it's nearly double what it was not too long ago. For that service club, I am sure it is a real and pressing challenge as to whether or not they're even going to be able to stay in business.
I just reviewed today where we are after 11 months of the so-called open market. And remember what we're talking about here tonight. We're talking about a regulator that's going to protect consumers, particularly around price, service, transparency -- all of those good things. I read the minister's speech last night. It's hard to imagine that anybody could be opposed to the good intentions and the words that give effect to those good intentions.
But Jim Wilson said most of that, maybe not as well, five years ago: "Pass Bill 35, and I'm telling you, folks, service is going to improve, rates are going to go down, Hydro debt is going to go down, albeit slowly, and we're going to get all kinds of exciting good things happening in the electricity sector." I remember thinking, and I think I said on more than one occasion, "Minister, you're being too optimistic. I hope you're right. But how do you think price can go down when we start to layer into this electricity bill new charges and new taxes?" That's what you have to do to make this a level playing field.
My friend Mrs Dombrowsky commented a moment ago about the bill. Let me digress again. I got a bill for my cottage the other day.
Interjection: You have a cottage?
Mr Conway: I have a cottage. Foolish me, I have a cottage that is electrically heated.
Interjections.
Mr Conway: That's right. My bill for the period of March, April and May 2003, with a slight credit of $5.25, $398; price of electricity $166. The commodity charge is roughly 40% of the bill. I can imagine a senior citizen or someone who is not paid as good a salary as I am to understand these things -- not that I understand a hell of a lot -- looking at this and seeing cost for the electricity, 4.3 cents a kilowatt hour for this period, $166; basic service charge, $98; charge by volume, $30.18; transmission charge, $57.02; debt retirement charge, $24.85; GST, $26.38. You know, $240 of a $400 bill has nothing to do with the actual cost of the electricity. There are many of my constituents who would look at that and be puzzled, if not upset. I think all of us have had that experience.
Now, there are benefits, I think, with the so-called unbundled bill. We now see that there is a debt and it's got to be paid off. I personally like the idea of the debt service charge sitting out there as evidently as it does. But in the absence of my friend Jim Wilson, I have to say, sadly, that the stranded debt of Ontario Hydro has gone up by -- I'm guessing, and I think very fairly -- in excess of a billion dollars. At the point of disaggregation, the break-up of the old vertical company Ontario Hydro, on April 1, 1999, if my memory serves me correctly, the stranded debt was something in the range of $19.5 billion --
Hon Mr Baird: Twenty and a half.
Mr Conway: -- or $20.5 billion. It has gone up by -- the auditor, the last time I checked, reckoned it was at that time $700 million. And you know what, folks? Our cap, after 13 months, has added, at least for the moment, another $600 million to what I will call stranded debt. Now, people will say, "Not to worry. That's going to come down over the next year or two because more supply is coming into the system and that will produce downward pressure on price. Well, I'm a prayerful, hopeful kind of guy, and I hope it's true. All I know is that at the end of 13 months, the rate cap has added $600 million dollars of additional debt to the public account of the province of Ontario. By very conservative accounting, we are now looking at accrued debt that has risen, I'm guessing now, to somewhere close to $21 billion. That was not the plan, and I'm not here saying that there were bad people trying to figure out how to do that to make it worse, not better.
One of the things I've learned after a long period of time with this energy business is that you'd better have a balanced approach and you'd better be a little bit from Missouri, because something is going to happen to you that you just didn't plan.
To that, I want to make a passing reference to two articles that appeared in the press today. One of the articles appeared in the Globe and Mail and the other article appeared in the New York Times. Interestingly, both of them concerned the subject of natural gas.
1940
As I say, I've been around this debate for a while, and one of the things I remember listening to five, six, seven or eight years ago, when it was clear that the nuclear option was just turning out to be more complicated, more expensive and more troublesome than any of us imagined -- and nobody supported it more openly or consistently than I did. But about nine or 10 years ago it became the fashion for a lot of smart people in the electricity and the energy business to say, "Going forward, the next best hope is natural-gas-fired electricity. Why? Well, we've got lots of natural gas. There's an endless supply of it, it's relatively clean, better than coal, and we've got new technology that allows us to build these combined-cycle plants in a relatively short period of time."
Mr Garry J. Guzzo (Ottawa West-Nepean): And it was going to be cheap, too, don't forget.
Mr Conway: And it was going to be cheap, absolutely, I say to my friend Judge Guzzo.
Well, there were two articles today. This is from the New York Times, Houston, June 16:
"Short Supply of Natural Gas Raises Economic Worries
"The economy has been cool, and so has the spring in much of the country. Nonetheless, the United States is facing its most severe shortage of natural gas in a quarter-century. `You would have thought that the last big upsurge in prices a couple of years ago was a tremendous wake-up call,' said Gwyn Morgan, chief executive of EnCana, a Canadian company that is the largest independent natural gas producer and storage operator in North America. `But for most people it was not'" the wake-up call that he had expected.
Just let me read a couple of other things. The article by Simon Romero in today's New York Times goes on to say, "With natural gas promoted as a cleaner-burning fuel than oil or coal, nearly all the electric plants built since 1998 are designed to be fired mainly by gas."
Guess what? Demand for natural gas is up sharply, and supply is going in the other direction. Natural gas prices are substantially higher, in some cases nearly twice as high in recent weeks as they were just a year ago, and the prediction from many, including Alan Greenspan, is that they're not going to come down to those levels of recent times in the foreseeable future. Hopefully these experts are wrong, but the clear evidence is that the option for cheap gas-fired electricity generation may be decidedly less available than a lot of very smart people were saying just 10 years ago.
In today's Globe and Mail is an article by Patrick Brethour entitled "High Gas Price Seen as Block to Clean Power." Again, just reading a couple of paragraphs: "The soaring price of natural gas threatens to put a chill on the construction of gas-fired plants and," listen to this, folks, "boost the use of coal for electricity generation," in Canada and other places -- this all having a negative and deleterious affect on what it is that Kyoto is trying to do; namely, to better manage greenhouse gases.
Quoting Hans Konow, president and chief executive officer of the Canadian Electricity Association, "I think that strategy" -- the strategy of a greater reliance on natural-gas-fired electricity -- "is gone."
So two articles today, both suggesting that the most attractive option of just a few years ago is probably not as available as we thought it was.
Now, back to our price cap.
Mr Beaubien: No pipeline.
Mr Conway: My friend from Lambton rightly observes that even if you've got the supply, you've got the constraint of transporting it across a continent.
I was struck today by the Premier's comments. I appreciated what he said about an honest effort on all sides to deal with the Great Lakes Power situation. Because I haven't been privy, as the Speaker probably has been, to those discussions, I gather there is some ongoing debate to try to include the franchise area of Great Lakes Power in the rural and remote assistance program.
Interjection.
Mr Conway: Well, good for those folks.
Let's take a look at the latest numbers. You'll be happy to know that as of the last few days, the average blended hourly electricity price in Ontario since market opening May 1, is 6.02 cents a kilowatt hour. We're paying 4.3 cents. The average blended hourly electricity price since May 1 of last year -- so we're talking 13 months and a couple of weeks -- is 6.02 cents.
The Premier said something interesting today in question period. He said, and I don't blame him for saying it, "Hey, folks, the good news is yesterday the price was around 3.8 cents a kilowatt hour," I think he said.
Hon Mr Baird: This month.
Mr Conway: This month.
Well, I hate to tell the minister, do you know what it was about this time last year?
Hon Mr Baird: Three point eight cents.
Mr Conway: I think it was lower than 3.8 cents. I think if you check, it was down around 3.3 cents, 3.5 cents.
Hon Mr Baird: Three point eight cents.
Mr Conway: Well, I will check, but I remember looking very carefully at those.
This is a trough, folks. That price should be troughing now. We have had a very, very cool, wet April, May and early June.
Interjection: No need for air conditioning.
Mr Conway: Very little need for air conditioning.
Listen to these prices. In May, the blended price was 4.51 cents. In April, it was 6.16 cents. In this past March, the blended hourly price was 8.48 cents. In February, it was 8.86 cents. So we had months where we were actually paying about 50% of the actual price to produce the power. That's the reality of year one. So I say to the energy board, good luck.
I noticed in the debate last night that the Minister of Energy took some time to research my remarks in the Bradley committee, one of those sort of old senatorial committees we've got around here, where the senior senator from North Carolina sits there, very chief magistrate-like. We had Wetston in. He's a very impressive guy. I think the government has made a good choice, and I was pleased to see that the minister took as much time to research and recite my remarks of some weeks ago in that committee to the House last night.
I don't want to sound like too much of a whiner, but, you know, I well remember private discussions five or six year ago when some very good friends of the government and some very reputable, public-spirited individuals said, "Hey, gang, if you want to open this market, you better do a couple of things. You better change the regulatory environment over at the energy board. That's going to involve a different kind of person with a different kind of resource." Boy, that Marie Rounding was one very smart woman. Why did she leave us, I ask, parenthetically? One very, very able woman, having done a great job in that position, and she left. I think I know why she left. That was then, and this is now. All I'm saying is, Howard Wetston is a very able guy, but you know what? So was Marie Rounding.
It was only last year when my friend Colle, who always does these things in a more diplomatic way than I, observed --
Hon Helen Johns (Minister of Agriculture and Food): Mike Colle?
1950
Mr Conway: The member from Eglinton-Lawrence, I mean. He observed, "What were the staffing resources of this new electricity-natural gas watchdog?" This is now two or three years in the new order of things. What did my friend Colle discover? The energy board had four investigators and eight people at the call centre. There are, folks, over four million residential electricity accounts in the province. I don't need to tell my friends on both sides of the aisle: when we loosed those very, very interesting electricity marketers on unsuspecting grandparents and other consumers, you know what happened. The phones lit up in your office, my office, and, if you could ever get through to anybody at the energy board, at the energy board as well.
You know, the thing I like about Judge Guzzo is he's a very knowledgeable sports personality. He knows that if you're going to have a good football game, you'd better have clear rules and a darned good referee. Our problem was that we put the Leafs and the Senators on the ice with no clear rules, and the referee only showed up at the end of the second period. It didn't work. We have had, regrettably, a serious loss of credibility in the marketplace as a result.
I noticed last night that our friend the minister was at some pains to say nice things about our old pal the former member from Nickel Belt, Mr Laughren. I think it is an appropriate thing that nice things were said by the now-Minister of Energy about Mr Laughren.
Mrs Margaret Marland (Mississauga South): He's my old friend.
Mr Conway: Mrs Marland, the doyenne of this place, says, "He was my friend too." As usual, Margaret's instinct is always generous and very warm-hearted.
What did Ernie Eves say last November to Southam News? And, Margaret, Ernie was and still is, I think, a friend of Mr Laughren. I know something about the circumstances that gave rise to that appointment, and I don't think it was divine intervention that caused it to happen. But what did Mr Eves say to Southam News on November 8, 2002, as reported by April Lindgren? Premier Eves went on to charge that, "The Ontario Energy Board, who were supposed to protect consumers in the province of Ontario -- that is their primary function -- under the leadership of that great socialist Floyd Laughren, have sometimes seemed to protect producers and distributors more than they have consumers." It was not surprising that a few hours or a few days later, our friend Floyd simply said, "I think I'll retire."
So I was pleased to see the minister last night saying nice things, as Margaret Marland would say nice things, about Floyd Laughren, if not her old and close friend Bernie Ostry -- your greatest achievement, Margaret. I will go to my grave, I tell you, I will happily pay taxes for the rest of my days to the province, if only for that. Anyway, I digress.
Yes, we can have good people, very good people like Howard Wetston, but what is the capacity of the board and what is the will of the government to actually deliver the goods? What would I make of the government of Ontario as a senior citizen?
I remember one night a few years ago being summoned to Beachburg, a wonderful little community in my constituency, and there were a whole bunch of senior citizens who had just had the marketers blow through town. Interestingly, the worst of the lot were representing Hydro One. I'm telling you, those dear souls were worked over in the most unbelievable fashion possible. If that wasn't bad enough, when they went to seek redress from government agencies, it was even more discomfiting.
We were going to do a whole bunch of things then. We didn't quite deliver. We took on a lot. The minister says, "I want to know, Conway, what's your disposition to Bill 23?" I have to say I've been there. I've stuck my neck out further than most people because, trust me, I say to both sides of the aisle, this is a really interesting challenge. This is grade 12; this is calculus, this is the hard chemistry, this is going to keep you up at night and it ain't going to go away. I have walked this walk longer and further than most of you, and I've got many more sins of both omission and commission than you do. The longer I'm around, the more skeptical and the more questioning I become.
Let me digress again. I read last Thursday in the Toronto Star an article that sent me through the roof. I'm telling you, I just cannot -- and I have to be careful because I'm probably going to use some lumberyard or locker-room language that will get me in real trouble. A headline in the Star of last Thursday -- "Pickering a Failure of Planning: Official."
Let me read a couple of paragraphs:
"Ontario Power Generation neglected to do basic planning for its project to restart the troubled Pickering A nuclear generating station, says the company's nuclear chief operating officer.
"Pierre Charlebois told the annual meeting of the Canadian Nuclear Society that performance at Pickering A, which is $1.2 billion over budget and three years behind schedule, is" -- to quote the chief nuclear officer of our company, I say to Howard Hampton -- "`very disappointing.'
"The latest cost estimate for returning the station's four reactors to service is" not the $800 million we were told six years ago, but "$2.5 billion," and rising. But there's more. Quoting Charlebois again, the nuclear chief operating officer at OPG:
"`We did not structure this project properly as a project with a project execution plan and scope and controls around that,' he acknowledged.
"`And we did not structure it in such a way that we had an integrated approach to control of the engineering and the assessment.... Much of that paperwork was incomplete or misfiled.'"
I want to say, particularly to my friends in the NDP, that's our company. We can howl and yell at great length, and we should, "That's Brascan." Hey, folks, this is us, this is our company. It is one shareholder, us, and it was the very thing that brought us to our knees six years ago. People like myself and Laughren and O'Toole, we sat there -- and John has an excuse; he wasn't there like some of the rest of us in the 1970s and 1980s, when this was the magical solution. I repeat, it wasn't all bad; it was just a lot more complicated, apparently, to manage and make work and fix up than we were ever led to believe. But having been through all of that, having been brought to the absolute brink of whatever, in 1997 we are told what? "Listen, we don't have the resources to fix them all up. We, the government of Ontario, our company, are going to rehabilitate Pickering A and we're going to, with your blessing hopefully, committee, Legislature, farm out that Bruce project to a third party."
We reluctantly, all of us, agreed. I think in retrospect it was a good decision. But our company was going to take two or three years, spend 800 million bucks and by the year 2001 have the four units at Pickering A back on-line. Trust me, we need it. We took off-line in 1997 something like 16% or 17% of the baseload capacity of Ontario's electricity system to fix it up. We took away, we took out of production 4,600 megawatts of, I think all of it, baseload supply -- not windmills, not hydroelectric stations -- the draft horses that run this system 24 hours a day.
The deal we were offered, and with a fairly high degree of assurance from our company and its managers, was, "We'll get those four units at Pickering A back on-line by about 2001 for a cost something a little less than a billion bucks." Today is June 17, 2003. What have we got? We do not yet have any one of those units -- hopefully we'll have unit 4 soon. But isn't that always the way? "It's just tomorrow, Minister; it's just next week, Legislature."
2000
Of course Mr Charlebois has never come to the energy board or to a public panel; he'll probably go to the Barnes Group. But I read in last week's Star that it's just been a gol darn boondoggle. Well folks, that's the juice that's to get us through the night: 4.3-cent power with this kind of operation? I don't mean to be difficult. I feel like my integrity is on the line. Many of you weren't there. I listened to the evidence. I bought the story one last time. And I looked like a fool. Do you know who actually looks good on this? Norm Sterling and the Deputy Minister of Finance, Mike Gourley. They were people who said, "You know, I think you need to do more due diligence. I think there are other questions." They got the back of the hand and away we went. Here we are. I hope and pray that it's going to get fixed.
The energy board? Good people, good mandate. I guess one of my questions is what the hell are they going to be supervising if we don't solve some of these problems? I repeat, we are 13 months into this market and we have spent -- well, if you take money out of the market mitigation plan, I guess it's close to $2 billion, to kind of subsidize rates through a very difficult year. But netting out of that is at least $600 million that's been added to the debt.
So I say to my friend the minister, I hope it works. You've heard from my colleagues Pat Hoy, Dwight Duncan and others, and my friend Ramsay just a moment ago said that a lot of consumers are very, very angry about the retroactive charges, and the bill appears to deal with that. I think that's a good thing. I hope it works.
There is some concern. I see in my file some correspondence from the Ontario Public Service Employees Union. They make a very good point about being careful. They observe that you've got pay for performance in a crown agency that is now going to basically pay for its operation by the fees and other income it generates as a referee. OPSEU makes a good point. If you want the referee on the ice, depending on his or her salary, for the number of fines that he or she assigns, it's a fair question. I presume that there are ways to deal with that. But make no mistake about it: I don't care how good the referee is, we've had good referees before. Again, I say to the minister, Bill 35 -- you just couldn't have more power. I don't want to bore you with it, but boy did you give yourselves sweeping regulatory power. In fact, I could argue that, in most respects, Bill 23 is redundant. One of the things, actually, that this Tory party has done --
Mr Beaubien: Be nice.
Mr Conway: Well no, I think I'm trying to be factual. It's a tendency that's showing up in other parliamentary systems as well, which is, "Let's just pass the big omnibus bill." Nutrient management is one of my favourites. It's all about good intentions, details to be worked out in the regulations. Well you know, I was the minister once. God. I remember when my back was to the wall, having to massage Norm Sterling's famous bill -- you know that separate school bill? Boy, the regulations under Section 10 of the old Education Act got me through a long, dark night. I have a feeling that when the Legislature passed that bill, it never really intended that entitlement, but I don't know that for sure.
The question I have is how are you going to meet the supply challenge?
Interjection: That's the whole issue.
Mr Conway: The whole issue, my friend from Kingston says, and it isn't going to be easy. You know I'm always reminded that George Bush went to the White House and basically said, "I'm not Bill Clinton and I'm not even daddy. You know what? I am not going to spend as much time as recent presidents obsessing about Palestine." I think George Bush has found out that you can't be President of the only superpower and not spend a lot of your time on Palestine.
Well, I've got some sad news for members of the Ontario government and the Ontario Legislature: you can't be here and in this business without confronting the reality of Hydro, as we used to call it. It is the lymphatic system of one of the great economies of the developed world, and it's in trouble. It's in trouble. Not, I think, unsolvable trouble, but remember again what happened a year ago.
I'll never forget that scene out in Mississauga. There was my pal Ernie and that nice couple. They seemed like a very nice young couple -- bright, with I think a couple of kids and I'm guessing about a 2,500-square-foot home someplace in Mississauga.
Hon Mr Baird: It was bigger than that.
Mr Conway: It was bigger than that? All right; fair ball. Ernie was there saying, "Ah, relief. Relief at last." Then discussion ensued, and I remember at the end that one of the couple said, "Thank God. We can now keep the Christmas lights on."
I just wanted to weep. I thought, "My guess is, you can keep the Christmas lights on forever. I want to know, is there air conditioning in that house? Has anybody talked to you about what it costs to air-condition a 2,800- or 1,900-square-foot house on a very hot summer and fall for hours, days and weeks at a time?" I suspect nobody has, and I suspect that, like a lot of us, that bright young couple with kids and a mortgage and two jobs has more to worry about than figuring that stuff out.
Somebody said earlier in this debate that public information is an important part of this. You bet, it's important. You tell farmers -- and you don't generally have to tell them this. They know that when the water gets low in the well, you start to change your behaviour, of necessity. Well, folks, thinking about electricity, there isn't much water in our well. We are behaving as though we are sitting on one of the great springs of history. We ain't. We have a lifestyle now that suggests we can't operate, we can't live, we can't work in southern Ontario without air conditioning most of the time, and even in here tonight it feels air-conditioned. I assume it's hot and humid outside. I want to say to the audience that, thanks to you, it's cool and comfortable in this chamber tonight, and it's not just the presence of our friend the sheriff from Brockville.
But I'm serious. There is not much water in the well. Bob Rae said it the other night. I forget his words. How do you suppose you're going to get people to conserve if we have a pricing regime that simply insulates them from any kind of reality?
Don't misunderstand me. You're all running for re-election; I'm not. I understand the pressure to avoid pain and to encourage pleasure, particularly as you get close to an election, but conservation without any kind of price signals? Again, I say to my Liberal friends as well as my New Democratic colleagues and my Tory relatives and associates, let's look at the options.
Chrétien has a good line. He likes to say on occasion, "People want to go to heaven, but nobody wants to die first."
We know that there are nuclear problems. Apparently, according to the New York Times and the Globe and Mail today, natural gas is both more limited in availability, at least the cheap stuff, and more expensive. By the way, I think it now takes, to bring natural-gas-fired electricity on-line, something like six and a half cents a kilowatt hour. I think that's roughly the number. Hydroelectric comes into the grid at around two or two and a half cents. Coal -- John, help me. About four cents? Three and a half or four, depending on how dirty it is. Nuclear -- well, that's always the great mystery, but we price it, I think, around four or five, with a fair bit of the bill being parked on some siding.
Mr James J. Bradley (St Catharines): A lot of the bill in the future.
Mr Conway: Of course. My friend Bradley says, "A lot of the bill in the future," and he's right. Of that $21-billion stranded debt, make no mistake, a big whack of that, the largest chunk of it, I'm sure, has to do with the nuclear commitment, but you can thank your lucky stars that Darlington is down there just running 24 hours a day. I was part of a group that was not going to complete Darlington, but we did, for reasons that I don't need to get into tonight.
2010
I don't care who the government is -- and I want to say again in an ecumenical way to my NDP friends, I've been reading Howie's book. The way I read the book, the leader of the NDP is certainly recognizing that prices have to go up. He's not opposed to private power.
Do you know, for example, that something like $3 billion, $4 billion or $5 billion of our stranded debt has to do with the non-utility generation agreements of the late 1980s and the early 1990s? Let me repeat: of that $21-billion stranded debt, something like $3 billion, $4 billion or $5 billion has to do with that very well-intentioned experiment in private power, but it was mom-and-pop private power called non-utility generation. Much of it was done, happily, with good intent, by the NDP and has ended up producing a very different kind of financial reality than that which was imagined 10 and 12 years ago. I see my friend from Sault Ste Marie looks a bit incredulous, but I think I'm correct on that.
But the question remains, when we peak now, we need 25,000 megs. Last August 13, we hit an all-time summer peak of 25,414 megawatts. This past January 22, we peaked at 24,145 megawatts. I'm not sure that the latter -- I think the one last August is an all-time peak, but we're in the neighbourhood of 25,000 megawatts. Remember what I said half an hour ago? You need, in the next 10, 12 years, at least 10,000, probably 15,000 megawatts just basically to replace what you've got now. Where, my friends, are you going to get that in a way that is affordable and environmentally acceptable?
We're going to pass a bill here that's all about protecting consumers. I certainly want to protect consumers in the Ottawa Valley and across the province. I think all of us are sensitive to the shocks out there, particularly in a resource economy. Farmers in my area, lumber operators, very large consumers of electricity, some of the shocks they've taken in the last couple of years around the electricity bill are well known.
Yes, we're going to pass Bill 23. I want to know what kind of ice is this regulator, this referee, going to be skating on? How are you going to do it?
Mr Bob Wood (London West): What are the solutions?
Mr Conway: The solutions? Well, I say to my friend from London --
Mr Bradley: You'll steal them.
Mr Conway: Listen, I am not worried, but I tell you it's going to be interesting. If somebody comes to you in the next few years offering to you to be the minister responsible for electricity policy, that's the day you might want to be out.
Interjection.
Mr Conway: Well, the current minister has some work to do. Margaret, I was stunned. Young Baird doesn't know the difference between Hugh Macaulay and Bob Macaulay. I'm not going to tell Hugh that the minister has him mixed up with Bob. That may have been a slip --
Interjection.
Mr Conway: It was probably a slip. But there was a day in this place 40 years ago, let me tell you, when if your name was Robarts or Frost, you would not ever mistake Hugh Macaulay for Bob Macaulay. I can't tell that story publicly, but there was a famous incident involving Bob Macaulay as he exited this place, having been minister of everything but not ultimately the minister of the one job he wanted and the Tory Party was not prepared to give him.
But the answer is going to be a mix of a whole bunch of things, some of which you're not going to like. You're going to have to look at a mix of things. You're going to want to have, I think, some very aggressive demand-management, and it's going to be politically difficult, because you can't go to heaven without some penance first. You better start this public information campaign soon, because the longer it is left, the more difficult it's going to get.
Mr Bradley: Don't give them a reason to advertise.
Mr Conway: My friend Bradley, who tends to obsess about these things, and I think with good cause, makes the point that there's lots of money to advertise around. Some of those health ads, for the life of me, I just don't get. They're so completely banal in their feel-good quality that I don't think you're getting value for money.
Now, the one I saw with Ernie the other night offered seniors the property tax rebate, the mortgage interest deductibility and peace in the education system, in just 30 seconds, and I thought, "Now, that has a nice little bite to it."
Mr Bradley: But did they show Ernie in the ad?
Mr Conway: They did, actually. There was just a flash.
Mr Bradley: Not the latest one.
Mr Conway: The one I saw just before the 11 o'clock news Sunday night on Global Television was actually, I have to say, quite effective. It was almost like those old Davis ads you'd see in the early 1970s. It just wanted to pull you in.
The problem is, the ad is transitory; this thing arrives every month or two. The hydro bill isn't going to go away. So I say in conclusion --
Mr John Gerretsen (Kingston and the Islands): Give him another half hour.
Mr Conway: No. I say in conclusion --
Interjection: Unanimous consent.
Mr Conway: I'm here to talk about Bill 23, you understand.
Mr Bart Maves (Niagara Falls): You have a minute left.
Mr Conway: I have a minute? I've tried to restrain myself. You see, I was at this sale five years ago. I bought this car, I road tested it, and you know what? On a dark and stormy night someplace between Niagara Falls and Pelham, I was kind of left on the roadside by a promise that didn't quite match performance.
The good thing about our system of government is they come and they go. People like Margaret and Bradley and I are cursed with the memory -- and the sheriff, of course, although he's a step apart. Actually, the sheriff had an interesting story in Gananoque this winter which was a little less well-known than Great Lakes Power, but I'll tell you, Gananoque Light and Power certainly produced.
At any rate, the question is, remember the problem that brought us to our knees six years ago? It is no less serious and no less threatening today than it was then; I think it is somewhat worse. Certainly I like Howard Wetston. I think the mandate he has should be a good one. But in the last five or six years, some similarly good people had an almost equally strong mandate, and for whatever reason -- a lack of commitment, a lack of will, a lack of resources -- promise did not match performance. That's why I resume my seat somewhat skeptical about the rollout of Bill 23.
Mr Tony Martin (Sault Ste Marie): I have to say that I found the presentation very interesting. It certainly engaged me in some thought. The member certainly makes a very thoughtful argument for caution in front of this issue. I don't think it's as simple as turning it over to the private sector and then washing your hands of it. This is a very complicated and difficult challenge for government. It has been for a long time, and I think the argument he makes that it will be for a long time is correct.
For the government to simply -- as it has done with so much of what it's tried to manage over the last eight years -- turn this over to the private sector and think that all the problems are going to go away is just not correct. And, in turn, in finding that it's difficult, to turn around and begin to look for scapegoats -- like Ontario Hydro and Eleanor Clitheroe or the Ontario Energy Board and Floyd Laughren -- is short-sighted, narrow and shallow, to say the least.
There are things that we can do. The member for Renfrew spoke of Howard Hampton's book. I think he called it a treatise on theology at one meeting I was at. But it's certainly a good read, if somebody wants to get --
Mr Bradley: How much does it cost?
Mr Martin: I forget what it costs. I got this one for nothing from Howard.
Interjection: Full value.
Mr Martin: Full value, yes.
I don't know what the cost is, but it's probably available at your local bookstore. It's worth the read if you're interested at all in the history and some of the proposals that we're putting forward. I also recommend for your reading another little book called Public Power that we put out recently, which will also give you some detail as to what we would do in front of this very challenging issue.
2020
Mrs Marland: I want to use this two minutes to make some comments. I have to read your riding, Sean, because Renfrew-Nipissing-Pembroke is such a long name. I do want to say, with possibly only six sitting days left in this session, and knowing that this member is not seeking re-election, that you are going to be missed tremendously in this House. In my humble opinion -- and I've only watched for 18 of your 28 years in this House -- you're the kind of member who has served his constituents in an exemplary manner. But you have also served the whole parliamentary system in this chamber for 28 years in a wonderful way, in my opinion, albeit you have served in a different party than I serve in. But no matter where you have sat in this House, we have all recognized your tremendous intellect and your tremendous oratory skills.
I have always said that when you were speaking, most of us, whatever we were doing, would put it down to sit and listen to you, as we did with the Honourable Robert Nixon, the Honourable Bob Rae -- may I say Ian Scott? -- and some other people in this House. You've set a very high standard in terms of your service, Sean, and I would personally like to wish you continued health and great success in your future life.
Mr Gerretsen: Much in the same tone as the member from Mississauga just mentioned, I too want to compliment the member for Renfrew-Nipissing-Pembroke. I totally agree with her. He's one of those speakers to whom members who are here in the House, at any given moment while he's giving a speech, listen. I think one of the reasons we listened to him is because, as he did in his hour-long speech on this hydro situation, he did it in a very non-partisan way. He dealt with the issues, with the history of this particular hydro situation over the last 20, 30, 40 years, and particularly the last five or six years. He also presented it in such a way that he didn't claim to have all the answers to this, other than to say that certainly the current answer that's out there, guaranteeing people the rate of 4.3 cents per kilowatt hour, is not the ultimate answer.
I know that his oratory and his passion for this place will be missed in the years to come. There are very few people in this House who can bring the same knowledge and the same dynamic attitude to any issue the way he does. He has a method of delivery and a choice of words which are quite unique in this place.
I too want to congratulate the member and tell him that I can well understand that the issue for the next Parliament, and for years to come, is going to be an issue of supply. That's where the real problem is going to be. I wish him well in his future endeavours, just in case we don't come back here in the fall. It has always been a pleasure listening to the member from Renfrew.
Mr Bisson: To the member from Renfrew and all those other parts to his riding, I don't think this is going to be the last time we will hear him speak -- I really don't.
I hate to tell you, Sean, but there's a good chance they're not calling an election this fall, at which point you're going to have to be back here yet again on another hydro speech, because it's certainly not going to be the last of the issue.
I also want to say that the overall tone of what Mr Conway was talking about was to say, "This is a really tough issue," which it is. But the second part he talked about, as Mr Martin said, is that somehow or other, "We had to throw this into the private sector and let them worry about it. They'll probably figure it out in the end."
I think there are alternatives. My friend Mr Martin pointed out the Public Power book written by Howard. I want to say that I had to pay $21.95 to get my copy; he got it for free. I've got to talk to Howard tomorrow. This is certainly dissent in the caucus. I got a signed copy and he got a signed copy, so I'm going to go and double-check.
The point I make is that it's actually a really good read, because it talks about the history of where we've gone with public power in this province. If you read the book, it's as we understand, that we've gone through this debate before. We ended up going into the public power system because we originally had a problem, and the problem was that when the private sector was in its heyday, starting up Hydro as we knew it back in the early 1900s, there was chaos. It was bedlam. Prices were different, depending on whether you lived in Niagara Falls or Toronto. There were all kinds of issues, and from a competitive position, Ontario would not fare well inside that private system. So from the time of Adam Beck, it was moved into a public system, and we find ourselves, some 100 years later, having to go back through that debate again.
I think there are solutions. I think a lot of them, as Tony pointed out, are inside the Public Power document. You can find it at www.publicpower.ca. It talks about our vision, as New Democrats, of what you need to do to deal with many of these pressing issues.
Mr Conway: I want to thank the four members who spoke so kindly. Let me just make a couple of quick observations.
I say to Tony Martin, the member for Sault Ste Marie, it's certainly not my intention to scapegoat anybody. I want to be very clear: I think there is an enormously important role for public power. Does it all have to be central public power, run from Toronto and Ontario Hydro, or does local public power in Mississauga, Pembroke, Sault Ste Marie and Kingston have a role to play? And if so, what's the balance?
I personally don't believe that you should eliminate non-public generators from meeting some of that future demand, estimated to be up to 15,000 megawatts in the next 10 or 12 years. But in the public interest, it's going to be very important to bring that private power into the system in some way that meets public objectives.
But I say, as somebody who has more than a bit of sympathy for public power, what do we say about Pickering? This is our company -- I want to say lock, stock and barrel, but I really should say tube, tritium and trouble. What are we doing? Why would anybody give us licence to do any more, given our performance around Pickering A? That's not some foreign plutocrat; that's us.
The auditor came to this place a year ago -- Ms Martel and the chairman of the committee, Mr Gerretsen, were there -- and basically said, "I've looked at the Bruce deal. All things considered, I think it's, broadly speaking, acceptable," and in very diplomatic language he said to us, the owners of Pickering -- my words, not his -- "You should be going down the road to Pickering and doing a better job of figuring out what it is you want at that huge plant you own and are trying to operate." Just because we support something doesn't simply say we can do anything or have anything done in that connection.
To Margaret and to Mr Gerretsen, I say that you're very kind. Someone once said, "Flattery is fine as long as one does not inhale," and like Bill Clinton, I'll try not to inhale, especially with the sheriff in town.
2030
The Acting Speaker: Further debate?
Mr Maves: It's a pleasure to join in this debate on Bill 23, the proposed Ontario Energy Board Consumer Protection and Governance Act. If you're watching at home and listening to the debate, you'd never know that we are talking about the Ontario Energy Board, but that's OK -- it's not really OK by our own rules, but a lot of times, when we get into debate about a variety of issues in this place, members are given wide latitude.
I'm glad to follow the member from the Pembroke area. The Maves family of Niagara Falls -- my dad had 16 kids in his family, and they grew up on Drummond Road in Niagara Falls -- is a very well known family that I'm proud of. They started out in Pembroke many, many years ago. The first five children, I think, were born there.
This member is an interesting member, and it was interesting to hear some of the comments from the member from Kingston and the Islands and the member for Mississauga West in their two-minute comments, which are traditionally used for taking little digs at members after they've just done their speech or taking exception to what they said. They reserved their comments to compliment this member.
I kind of think of him over the past eight years as the Quasimodo of Queen's Park. He's not listening on the other side. He's the kind of guy who doesn't hang out in the bell tower, but he hangs out in the library and spends a lot of his time reading books, looking at journals and so on. Indeed, he's an excellent orator, I've listened to him speak, and the speakers on this side of the aisle who get the most attention and kind of our own riveting speakers -- Mr Stockwell, who has a totally different style, obviously. When Mr Conway gets up to speak, the place is usually quieter, the people tend to pay attention and listen, because he's a very good orator.
But I tell you, I've spent eight years and I've listened to a lot of his comments, and I've noticed that he has a very distinct pattern when he speaks. If anyone cares to go back and have a look at some of his speeches, he takes on that statesman-like air that he puts out there -- and that's very good, because that statesman-like air lends you credibility right off the bat -- takes on this non-partisan tone all the time, but he's a very sneakily partisan member. My friend from St Catharines, Mr Bradley, who also has a very statesman-like air and takes on that air quite consciously, is also a very sneakily partisan member quite often.
One other thing that the member uses in his speeches is he always throws in some historical references -- that again lends credibility -- throws in a reference to a book or a journal -- boy, this guy reads; he must be smart -- and all of a sudden everything that comes out of his mouth is treated differently. I don't think it always should be. I think that when we have these speeches in this place, you get great marks for style in politics, and actually politics is probably 90% style, but you have to listen for content. Quite often, when the member opposite gives these speeches he ends up being short on content. He has been in this place for many, many years; he has been around for the entire history, for the last 20-some-odd years, of Hydro in Ontario. He's right to say that these aren't new issues, but I've never really seen the Liberal Party or the member opposite come up with any real strong ideas on how to fix this system.
How we ended up here tonight is that when we came into office in 1996, we had the courage to say, "You know what? There are problems in this hydro system. We need to fix the system." We appointed a former Liberal cabinet minister, Donald Macdonald, to go out and do a study on hydro and come back and say what should happen with hydro, what do we do with hydro?
He did a province-wide consultation. I remember attending some of his consultations. I attended them here; I spoke with him personally; I attended some in Welland and the Niagara area. Everybody who attended those things agreed that there were a lot of problems with the hydro system in Ontario. The large power consumers in my riding, in Mr Bradley's riding, and Mr Kormos's riding in Niagara all knew there were big problems with the hydro system. The people who had local distribution systems -- people at Welland Hydro and Niagara Falls Hydro and St Catharines Hydro -- all said there were problems with Mother Hydro.
Obviously, I have a lot of Ontario Hydro employees in my riding. I have a lot of retired Ontario Hydro employees in my riding. In my riding it's not hydro; it's Mother Hydro. Everyone has known for many, many years that there are a lot of problems. So we said, "Mr Macdonald, here. You do some work for us and give us an indication of where we should go."
He did a report, and he said part of the problem we have, of course, is the huge accumulated debt that is not figuring into the price of power, that we're not truly paying the price of power over the years, that we can brag about the low cost of power we produce at Ontario Hydro but it's because we don't pay off the debt like a normal company would do. When you make a product, you have capital costs that go into that product, and those are always excluded. So we had a large hangover of debt we had to deal with. We had inefficiency. There's no doubt that everybody in Ontario knew Ontario Hydro was inefficient. The stories people can tell you about inefficiencies at Ontario Hydro and every aspect of it are legion. We needed to do something about that.
So we headed down this road of open competition. That was part of what we were advised to do. Who did we have along with us as we marched down this road? We had the Liberal Party of Ontario marching down this road with us in lockstep; they agreed. The critic for Hydro was Mr Conway. He agreed wholeheartedly every step of the way. In fact, the Liberals voted for our major piece of Hydro legislation, which took us toward competition.
Did they support the open market? Well, here's Sean Conway in a letter. It happened to be an invitation to a $350-a-person energy sector reception fundraiser for the Liberal Party. He says, "Throughout Ontario's electricity restructuring process, Dalton and the Ontario Liberals have been consistent supporters of the move to an open electricity market in Ontario." It's very clear from that quote; it's very clear from the way they voted. In fact, they voted in favour of one of our bills on second reading; on third reading, they voted against. It shows a bit of their ability to switch positions on an issue.
McGuinty was asked in December of 2001 what he would do about Hydro. McGuinty said, "I think that it's important that we move ahead with competition, both in terms of generation and in terms of transmission." That was when we talked about Hydro One and the private sector.
The members opposite sometimes say we're misquoting people. I turn to Hansard and I find a direct quote from Sean Conway, June 5, 2001: "Let me be clear: we need a competitive marketplace. The electricity market that we as Liberals envisage is one where we see a competitive market in the generation of electricity." So they've been very much in favour of this move to an open market and competition in electricity.
On the other hand, there are times when they've said they're opposed to it. As I said, they voted in favour of one of our electricity restructuring bills on second reading, against on third.
I just gave you some quotes of both Conway and Dalton McGuinty being in favour of an open market. Now there are quotes also out there about him being opposed to an open market. For instance:
McGuinty: "I have been very consistent with respect to Hydro One. I think it should be kept in public hands. I have been very consistent when it comes to generation; there should be competition."
Question: "So you're saying that you were misquoted?"
McGuinty: "If you take a look at the quote, it is a paraphrase...."
The next question to McGuinty: "You are going to cancel the competitive market?" "Yes," is his answer. "And what's left of the remaining competitive market?" "Yes," he says again. "At the wholesale level?" "Yes," says McGuinty. "So that will be gone," a competitive market will be gone under a Liberal government? "Yes."
They stand and lecture and give us historical speeches about Hydro. They complain that the direction we're heading in is wrong, but they never really want to give their solutions to these problems. As a government, you can't just stand and say, "It's too bad," and be critical of direction of different things. You actually have to legislate. You actually have to make decisions. This government has done that. I'm proud of what we've done and how we've moved through electricity, and we're not done.
The member talked about Bruce Energy. I was there when the Provincial Auditor brought in his report on Bruce Energy and the leasing agreement between the government and Bruce Power. I remember the opposition said -- because I was a member of the Provincial Auditor committee. They came in, it was their decision, their motion to that committee to have the Provincial Auditor do an audit. This is out of the ordinary. Not very often does the Provincial Auditor get asked by that audit committee to do an audit. He chooses who to do audits of in the government of Ontario. They said, "We want an audit of this deal." When he brought in his report, I remember the Liberals and NDP showing up, rubbing their hands with glee. They couldn't wait. They were salivating. They were going to find something wrong about this dirty deal that the provincial Tories had done with Bruce Energy, a private sector company with regard to Bruce Power. As Mr Conway has said, the auditor came in and gave it a clean bill of health. I watched their faces drop as we spent the first half-hour in camera reading this report. I watched their faces literally drop. There was nothing there for them to be able to go to the public and say, "They did this deal with the private sector, and look how bad the private sector is. Look how they're hurting Ontarians."
2040
But I saw a little twinkle in Mr Conway's eye, and I knew he had cottoned on to something. What he cottoned on to was a reference in that Provincial Auditor's report that said that the really good part about Bruce Energy and the lease to Bruce Energy was that a private sector company -- because we do have shortages and we do have impending and potential shortage of supply in Ontario as our economy continues to grow. The Provincial Auditor said one of the great things about the Bruce deal is that a private company put $700 million of their own money into refurbishing that plant, and they did it on time and they did it on budget. What Mr Conway caught in this report was a reference where the OPG staff said, "One of the things we like about the Bruce deal is that it frees us up to deal with Pickering."
"Aha," Mr Conway said. "If it has freed you up to deal with Pickering, why is Pickering so far behind and why is it so far over budget?" Great question. That highlighted one of the problems we're trying to deal with, with a competitive marketplace, and that is that historically, Mother Hydro had become incredibly inefficient, as monopolies tend to do. "Hence the reason why we needed to break up Mother Hydro in the first place," said Donald Macdonald and many others around this province, and why we needed to bring other people in to help us provide more energy.
Mother Hydro -- no matter which government has been in charge of it, they have had a great deal of difficulty in wrestling it to the ground and making it more efficient. And they're still not there. Proof of that is Pickering.
I've spoken to my employees, and I have many of them in Niagara Falls, and they'll say, "Well, you know, Bruce was a little different deal than Pickering. There were a few more technical difficulties in Pickering. It was a more difficult job to bring Pickering back up than Bruce." I'll concede you that. Not being an engineer, I can't tell you the truth of that, but I believe some of my employees in Niagara when they tell me that.
But what's clear is that it shouldn't be over a billion dollars over budget and it shouldn't be as late as it is. But part of the reason we need to move to open competition, part of the reason we have to have an open market, is because we need new generation and we have to rely on the private sector, like Bruce Energy did with Bruce Power, to put their money on the table and bring power into our grid. So we're doing that.
I know that the Minister of Energy is working very hard in trying to get a new tunnel in Niagara Falls, something we've worked on for many, many years. Potentially we're looking at a Beck 3 power plant. How else can we get more power on the grid? Well, I have to congratulate Minister Baird for a very aggressive program, a 10-year corporate income tax holiday for people who put their own generation on the grid and build new generation, 100% corporate tax write-offs in the year of acquisition for the cost of newly acquired generation assets, a capital tax exemption for newly acquired generation assets, full retail sales tax rebate for generation building materials and a 10-year property tax holiday for newly created generation assets and compensation to municipalities for lost property tax revenues.
These are great initiatives to drive the private sector to create more energy. Some of those companies I talked about that are in my riding and Mr Bradley's riding and Mr Kormos's riding are large power consumers who said, "Break up Mother Hydro. Bring in competition to the sector." Some of those people still want to build generation. Some of these steps bring it nearer to the reality of a possibility.
So I think those are important concrete steps that we took that we never heard any indication from across the way that those were steps that we should have been taking. We had to make a decision and we did that.
Now, Conway talked about Premier Eves not being happy with the Ontario Energy Board, and not saying nice things once upon a time about Floyd Laughren when he was chair of the energy board. Why was that? Because we had said to the Ontario Energy Board several times that what we wanted them to do was to put some paramount importance on protecting consumers. Clearly, when we opened up the market, when many municipalities had taken over local distribution facilities, they all applied for rate increases. They all applied for the maximum allowable 9.98% rate increase, and they all seemed to get it. The Ontario Energy Board, without blinking an eye, gave it to them. So hydro distribution rates went up all over the place, in every municipally-owned utility.
Where did those profits go? Well, half of them got divided up and they went through a neat little vehicle: half of them to the coffers of the municipality and half of them usually stayed within that utility as retained earnings to be used, perhaps, for capital reasons or perhaps, at a later date, to be flowed to the municipal coffers. We don't know, but I think Premier Eves was a little disappointed in the way that the Ontario Energy Board had, perhaps, lost its way and hadn't protected consumers, for example, when some of those applications came in.
We're moving now to make this commitment to change the Ontario Energy Board Act, to change the structure a little bit of the Ontario Energy Board, to try to make sure that they always know that protecting consumers will be of paramount importance. I remember in the past, Minister Wilson had to go down a similar road with the Ontario Energy Board when they didn't act in the best interest of consumers and he had to issue directives in the past.
Part of this bill that's before us tonight also deals with the concept of retroactive changes to rates that are given to gas companies, for example. Marcel Beaubien, one of our members, in his riding, where Union Gas applied for and was granted a retroactive rate increase to cover gas costs, was very adamant that this government take action on that issue. In the bill tonight, we are forcing the Ontario Energy Board to deal in more effective and better time frames and to remove some unacceptable lag times in their decision-making so that these retroactive increases don't occur.
2050
I'm coming to near the end of my time. I appreciate the comments from the member opposite. I always enjoy listening to him, but I always listen closely for that concrete Liberal position on an issue. Maybe some of the members of my party can tell me, maybe the minister can tell me, maybe one of the staff can tell me what the heck Liberal policy is on hydro in Ontario. I know what the NDP position is: it's Public Power. It's to go back to the old "Mother Hydro rules everything; the Ontario Energy Board has no teeth; let's go back to the old system, the way it was; let's continue to rack up debt in the province of Ontario." We know that's their position. We don't agree with it. All of the major power consumers, Donald Macdonald's report, the municipal utilities who went to all those hearings, don't think that's the right way to go; we don't think that's the right way to go. I know the Liberals don't think that's the right way to go, but I don't know what their position is. It would be nice if, in one of those long wonderful speeches that Mr Conway makes, he would take the time to very succinctly spell out the Liberal position on the issue of hydro in Ontario.
The Acting Speaker: Questions and comments?
Mrs Lyn McLeod (Thunder Bay-Atikokan): I appreciate the fact that after spending most of his time trying to mount a defence of his government's indefensible energy policy, the member for Niagara Falls did turn to some of the specifics of the bill. There are some aspects of Bill 23 which I wish he had touched on, because I think they deserve some clarification. To me, they are somewhat beyond understanding. I would have asked him some questions, perhaps, about the non-independence of the Ontario Energy Board from government once this bill is passed, but that didn't strike me nearly as much as the fact that in this bill the Ontario Energy Board is going to become self-financing so that the industry participants are going to be funding the regulator itself. It would have been interesting to hear government members explain how you can have what is essentially a rate-setting body in many instances as well as a regulatory body possibly operating when it is being funded by those very same regulators. I think that deserves some explanation.
I would have been interested in hearing the member for Niagara Falls talk a little bit more about this whole issue of the cooling-off period. I happen to think that's an important provision of this bill, that there's an extension of a cooling-off period for individual consumers who have signed contracts either for gas or for electricity from the independent retailers that this government has unleashed upon consumers, who know very little about the representations and sometimes misrepresentations that are being made to them when somebody comes knocking on their door to sell them what is supposed to be cheaper electricity. So I'm glad to see there's some extended cooling-off period -- although, talk about trying to close the barn door a little bit after the horse is long gone.
This is just gloss on what is an absolutely disastrous situation. Just on that issue of retailing, do you know who pays for the electricity, who picks up the electricity consumer that those individual retailers that have been freed up by this government when they can't deliver the electricity, particularly at 4.3 cents a kilowatt hour? Do you know who picks up the cost? The municipal utilities, most of whom have now been bought up by Hydro One, so we'll have a huge debt for Hydro One after --
The Acting Speaker: Thank you. Questions or comments?
Mr Martin: I find it interesting that the member from Niagara Falls, the birthplace of public power actually in the province, would be taking such a stand in support of his government's position on the way that we deliver hydro.
I just want to share with him a very short piece from Howard Hampton's book, Public Power, that I think you'll find interesting and maybe whet some appetite for more of the book. Howard says:
"I am at Niagara, downstream from the Falls, studying from a distance the Sir Adam Beck 1 generating station, still as impressive today as it must have been when it was built 80 years ago. Miniature waterfalls flow from the evenly spaced apertures that punctuate its broad expanse. Behind each of these openings, I know, is a mighty turbine that has already captured the energy of the falling water and delivered it to a transmission network that would, at a marathon per day, take more than two years to traverse. More impressive than these massive works, however, is the idea that gave them birth: the notion that co-operation, not competition, was the better way to light the future."
I suggest, as does Howard in his book, that if we want to offer something to our children, one of the things we could offer them is reliable, safe and affordable hydro to power all those things that they can dream possible in terms of economy, community and our personal lives. I believe that the government, instead of debating this bill, should in fact be solving the hydro problem with our Public Power platform. The Ontario Energy Board should be transformed into a public utilities commission. The commission should regulate the price of power and approve public sector generating projects.
This bill is a misguided attempt to make deregulation better. This is a bit like trying to make better typewriters instead of moving to computers. So I would suggest that the member from Niagara Falls take a look at the history of public power in this province and then rethink his position.
Mr Bradley: I enjoyed the speech from the member for Niagara Falls. I particularly enjoyed it, but I was looking for his reference to what we call Beck 3 in our part of the province. I think, in his heart of hearts, he's been an advocate of it for some time.
Dalton McGuinty and I were standing on the edge of the Niagara River. There was nobody there to push us over; Bart did not arrange for anybody to push us over, but we were on the side of the Niagara River many months ago advocating once again that the government proceed with a project we'd call Beck 3. First of all, it would be the enlarging of the tunnels to get more capacity for the existing generating station. I think there's now a commitment to look at the development of a third generating station there called Beck 3.
I read in the Niagara Falls Review that my good friend Mr Maves -- he'll correct me if I'm wrong -- said we couldn't afford it or it wasn't possible to proceed. He'll help me out with that. Mr Gilchrist, the energy czar -- what do they call him now? -- the commissioner of alternative fuels, was there to say that was not really practical to proceed with.
A few months later, when the government was in the midst of a huge crisis, who do I see standing on the side of the Niagara River but the Conservative members from the local area, along with the Minister of Energy, announcing Beck 3.
I'm always happy when the government accepts one of the suggestions or proposals of the opposition. I was surprised he didn't invite me down to be part of the announcement at that time, but I think he lost my telephone number and was unable to get hold of me. But it was nice to see the government proceeding with what was essentially a policy of the Liberal party, and I want to commend Mr Maves and the government on doing so.
Mr Maves: Let me start off with my friend from St Catharines, Mr Bradley. I hate to burst his bubble, but the idea for a third Beck tunnel and for the Beck 3 plant, which would be a third power plant, is one that's been around for many decades, and it predates even one of my predecessors, Mr Kerrio, who was the energy minister in Niagara Falls. Their plans and the concept was floated as early as the 1960s, and perhaps even 1953 was the first time that Beck 3 as a third plant was actually talked about and thought of. In fact, environmental assessments have been done in the past on the possibility of Beck 3. So that's a project that's been envisaged for many years.
I was proud that once we had implemented and decided to introduce tax cuts which would make the third Beck tunnel and possibly Beck 3 power plant feasible, we decided to move ahead with the Beck 3 tunnel. OPG had said for many years that the third tunnel may not be feasible in the current financial climate. So this government, by acting and bringing in many of the tax cuts that I read about earlier in my speech, actually for the first time made that project economically feasible. That's when we decided to move forward with the tunnel and to do a feasibility study for a Beck 3 plant.
Again, the member for Thunder Bay-Atikokan was actually the first person to really talk about the nuts and bolts of this bill tonight. I'll tell her that we were following the lead of Mr Conway, who spoke for an hour without really talking about the bill, and we took the liberty to speak about energy in Ontario in general. Even though I had thrown the challenge out to her that I would like to hear the Liberal policy on energy, she did fail to provide that. I'm hoping some Liberal gets up and clearly enunciates Liberal policy on energy in Ontario.
The Acting Speaker: Further debate?
Mr Jean-Marc Lalonde (Glengarry-Prescott-Russell): I am pleased to take part in this debate on a bill that is to amend the objectives of the Ontario Energy Board, which is to include promoting communications within the gas and electricity industries and educate consumers and protect their interests with respect to prices, reliability and quality of gas service.
I must say that since the very beginning of this hydro fiasco, the Eves government has made a mess of deregulation of the electricity market. First they were going to sell 100% of the hydro system. Then they were going to sell maybe 49%. Then maybe they would wait. Then, after a lot of pressure from Dalton McGuinty and the Ontario Liberals, they were forced to admit that they needed to make changes to protect Ontario's consumers, who were unable to cope with the high electricity prices caused by the Eves government.
2100
The reform of this bill should have been addressed way before today. They caused many Ontarians to become nervous with attacks of anxiety about whether they could afford to pay their hydro bills. Nobody -- I say nobody -- trusts this Ernie Eves government to manage Ontario electricity.
This bill addresses some of the problems in the energy industry such as supply, but until they get that in place, they will not have provided protection to all Ontario consumers who complain every day about the number of extra charges on their hydro bill.
We had Bill 35, we had Bill 100, we had Bill 210, and now today, we are debating Bill 23. It shows that we're trying to fix the mess that we have created.
In Bill 210, the Minister of Energy, John Baird, and the Premier led Ontarians to believe that all Ontarians would benefit from a guaranteed rate of 4.3 cents per kilowatt hour. This is the cap that was introduced in Bill 210. But soon after the passing of Bill 210, we found out that the farmers were not protected. So on January 21, the minister announced at the farmers' annual meeting that they would benefit from this cap of 4.3.
Then later, on March 18, we started calling the ministry. In the bill we had stated that nursing homes and retirement homes were to qualify for that cap of 4.3. They had forgotten. They forgot to include them. As of today, I was calling the Lise Ménard retirement home in St Isidore, and she told me she hasn't yet received that rebate that she's been qualified for since May 1. They were advised on March 18 this year that they would qualify.
Later, we kept the pressure on this government that it was unfair for small businesses or those people who were using more than 150,000 kilowatts per year. We decided to make an announcement on March 21, the day that I was at PPG, a windshield manufacturer in Hawkesbury that employs over 600 people. They told me on that day, when the cost of their energy was at 4.3 cents per kilowatt hour, it was costing them 99 cents for electricity per windshield. But at that time, the cost of the electricity was at 8.53 cents per kilowatt hour. They told me at that point that the cost per windshield was at $2.74. Not long after, they received another bill and the cost of hydro, like many other industries in the whole province of Ontario, was 10.55 cents per kilowatt hour.
At 3 o'clock in the afternoon on March 21, the minister made an announcement that, as of May 1, 2002, anyone using less than 250,000 kilowatt hours per year would benefit from this cap of 4.3. Those over the 250,000 kilowatt hours will get a rebate of anything that exceeds 3.8 cents per kilowatt hour. Mind you, everybody in this province, according to Bill 100, was supposed to be getting a rebate of anything paid over 3.8 cents.
Then, when the minister made this announcement on November 11, 2002, everybody thought they were getting a gift. The Premier said that everyone in Ontario would be getting a gift for Christmas of $75. Mind you, it doesn't pay these days to give a little gift before election time. But the people were pleased to say, "We are getting $75 as a Christmas gift." Mind you, the government made a saving of $750 million because they were supposed to give a rebate on anything exceeding the 3.8, and they decided to pass the bill to cap it at 4.3.
But those companies that are paying the 10.55 -- at one point they were paying 11.22 -- had to proceed with layoffs. They couldn't afford -- like PPG, for example. They have windshields. Just in hydro, it was costing them $3.50 per windshield in electricity. PPG is a large company which has four plants in Ontario: one in Hawkesbury, one in Oshawa, one in Owen Sound and one in Mississauga. They also have three other plants in the States. Whenever they get an order from, let's say, Toyota, Mazda or any of those companies, it goes to the head office and then the order is sent to wherever they can do it the cheapest. Talking of $3.50 per windshield, that is quite in excess of 99 cents per windshield. They decided to lay people off. Other companies on the Quebec border say, "If I was in Quebec, I would be paying 2.4 cents per kilowatt hour. My competition is in Quebec, so I have to close my plant and move to Quebec." It seems to me the government doesn't want to understand this.
I have a Mr Sabourin, who operates a large business -- well, I say a large business -- of 15 employees in Alexandria. His costs in electricity have gone up by $60,000 a year at the present time, due to the incompetence of this government toward hydro costs. Mr Sabourin has created a committee in north and south Glengarry to convince people to put pressure on this government. He told me that if anybody wants to call him in Alexandria, his phone number is 613-525-1032. We have already received some calls from Owen Sound, Sault Ste Marie, Windsor, Picton. People want to get in with him and boycott this government. They say, "Are we going to continue sending 4.3 cents per kilowatt hour, put the rest in distress, or are we going to start closing down every business for one day of the year?" It would go all over Ontario. If we proceed this way, it is really going to affect employment. Some employees are going to be affected, but this is going to be caused by this government, which really doesn't care about the small employer.
I've got Dairy Queens that at the present time are using a little over 250,000 kilowatts a year. I was up to a car dealer and he was telling me, "No, I'm paying the 4.3." I said, "Let me see your hydro bill." I looked at it: 10.55. The problem is, for most of those companies, their accountants are paying their bills and they think they're paying 4.3 cents. But given the fact that we are spreading the word like we're doing at the present time, all those small businesses, the job creators, are going get on this wagon and put pressure on this government. It's time to stop.
We spoke about having tax relief for seniors on the property education tax. We are now going to proceed to rent generators at a cost of $100 million. The tax break those seniors are going to be getting is going to cost this government $450 million. Let me tell you, if we had proceeded the other way, telling all the seniors in Ontario we would abolish all their transportation charges and all their delivery charges, all the seniors would benefit from this. When we talk about tax relief for seniors, the majority of seniors are not going to get a cent out of it because they already declare that on their tax return, that they are getting this money back.
2110
I was looking on the Internet just today, and I'm very surprised this government has not come up with any deal with any of the suppliers: New York, Michigan, Minnesota, Manitoba, and one, two, three, four, five -- they had five contracts with the Quebec government at a low rate. So for July, August and September, no deal has been concluded with any of the suppliers. We are going to export some hydro, but during the month of June we'll be buying 867 megawatt hours from the state of Michigan.
I remember last October. I just happened to be lucky: the government asked me to represent them in Beirut at the Sommet de la Francophonie. During the four days I was there, I spent those days with the Minister of Finance from Manitoba. He told me that they had met with the Premier at the time, Mike Harris, two weeks prior to May 1, and told him not to proceed with the deregulation. But the Premier, Mr Harris -- I still say this is the main reason why he decided to step down, because he knew that he had created a real fiasco within the hydro system of Ontario. The Minister of Finance of Manitoba, Greg Selinger, told me that they could have signed an agreement with Manitoba at 3.2 cents per kilowatt hour. We decided not to proceed with it. We decided instead to buy our hydro from Minnesota, who are buying this hydro from Manitoba. So we are paying US dollars at what cost? I did receive the cost of what we're paying for hydro today. From Minnesota we were paying $270.06 per megawatt hour during the month of May; from Michigan, $3,033.33 per megawatt hour -- that is in American dollars; and from Quebec, $139. I just can't understand. I can't understand why we are not buying more electricity from Quebec. Just last week there was a communiqué that came out that Hydro-Québec was offering hydro at a low cost to anybody from the States or any Canadian province. When I look at this report today, we have decided not to proceed and probably not approach the province of Quebec to buy hydro or the energy that we need in Ontario.
I have to say, yes, there is a time to create or come up with this Bill 23, but as long as there will be no political interference. We know in the past there has been quite a bit. I have to tell you that Hydro One at the present time has just about full control of any hydro in Ontario except a few municipal hydro companies. I presented a bill in the House here. The bill states very clearly that municipalities should have the power to buy from Hydro One any transmission line within their municipality or within a certain area around their municipality.
Within the village of Embrun, one side of the street where there's a major housing development is run by Embrun Co-Op Hydro, and the other side of the street is run by Hydro One. Hydro One said to extend this street, where there's supposed to be 100 new homes -- in a small village, I think it's pretty high. Hydro One said, "No, we cannot supply you with any energy before September." Those houses have been sold. Embrun Co-op Hydro is charging $50 for connections. Hydro One has decided they have full control whenever you want to hook up to their hydro lines.
Let me tell you, in a lot of projects in eastern Ontario prior to Hydro One taking over, the cost of connecting a house was $226. I made a statement in this House way back. They decided all of a sudden to increase the price to $968 without notifying anyone. Those houses were already sold, so the developer was losing in the area of $740. We asked them to justify the increase. Immediately after I made the statement, I went back to my office and received a phone call from Hydro One. They tell me, "No, we cannot justify it, but I think we have surcharged them by about $150." This is the system that we have with Hydro One. Hydro One at the present time has full control of some of the areas.
I'm just going to talk about the city of Ottawa at the present time. Before the amalgamation, the city had its own hydro, and now 11 municipalities came up to one municipality. The area of the former Cumberland township consists of 37,000 rural residents. They are paying an average of $250 more per year per household. When I look at the graphic they sent me, just to show you that Hydro One are trying to keep control and want to take over everything -- we know they paid big money to acquire municipal electric commissions.
If I look at the normal residential density in Ottawa, Hydro One's current rate is $23.70 for the delivery charge. Ottawa Hydro is $6.69. That is the fixed charge, sorry. The Hydro One delivery rate is 0.0133 and Ottawa Hydro's is 0.0122.
When I look at the rural area, urban density, the fixed rate is $12.52 for a fixed charge and $6.69 for Hydro One. So there's a big difference in cost, but they don't want to let Ottawa Hydro take over.
At the present time, it has been a fiasco.
The Acting Speaker: Questions or comments?
Mr Martin: I appreciate the opportunity to speak after the member for Glengarry-Prescott-Russell. He, I think, makes some very cogent arguments re why this bill isn't going to do the trick that the government suggested it needed to do. In fact, we've been clear and on the record in the NDP caucus in saying that this bill is nothing but another example of the government's continuing use of shell games to try to cover up mistakes that they made, and to divert responsibility and blame someplace other than at their front door.
We know from their handling of the hydro portfolio that when things got hot -- no pun intended -- they initially dumped responsibility and blame on Ontario Hydro and Eleanor Clitheroe. Then they turned to the Ontario Energy Board, to blame it for not doing that which it had no mandate to do, and then to ultimately blame Floyd Laughren. Then they brought in this bill, which is purported to give the Ontario Energy Board the kinds of controls necessary to make sure that as they deregulate and privatize the hydroelectricity system in this province, the consumer out there will have some confidence that somebody is minding the shop; that there are provisions and facilities available for people to make complaints and that they will in fact be dealt with.
Our review of this piece of public business is that in fact this newly revised OEB will not have that ability, if for no other reason than they haven't been allocated the resources to do the job.
2120
Mr Norm Miller (Parry Sound-Muskoka): I am pleased to add some comments this evening on Bill 23, the Ontario Energy Board act, in response to the member from Glengarry-Prescott-Russell. He was talking in his speech about property tax relief for seniors. Before the Legislature at the current time we do have Bill 43, An Act to provide Ontario home property tax relief for seniors, which was debated last week.
We, on this side of the House, happen to think that's a good thing. In fact, it's part of our election platform for the election that will be upcoming in the not-too-distant future, I'm sure. We happen to believe that seniors who are on a fixed income need assistance in paying for things like property tax but also their hydro bills. This act to provide Ontario home property tax relief for seniors will be a significant benefit to seniors in this province. It's going to be an annual savings of about $475 for the average bill; $450 million a year back in the hands of Ontario seniors.
I should point out that the Liberals have made it very clear that they're against this policy. In fact, if they are the government they are going to do away with this planned tax relief for seniors. I think we need to make that very clear. They've made it very clear if they by chance become the government, they're going to do away with this property tax relief for seniors.
We, on this side of the House, happen to think it's a good thing for seniors. They deserve to receive this tax credit, and we're looking forward to passing that bill in the next few weeks to help keep our seniors financially secure into the future.
Mrs Dombrowsky: With the regard to the bill that's being debated this evening, Bill 23, which the government would suggest is a bill intended to protect consumers with respect to their hydro rates, the member from Glengarry-Prescott-Russell referenced situations in his riding with regard to hydro customers who would use over 250,000 kilowatt hours of power per month.
The price control measures that most families enjoy, the price cap, is not extended to those people who would use above 250,000 kilowatt hours of power per month. In my riding, that is having a very negative impact for a number of business owners. One example is an individual who approached me and is the owner of a kiln; he dries lumber in his kiln. Of course you can appreciate that that kind of operation would use a significant amount of hydro, and he does not enjoy the cap that is in place.
I say to the members of the government who would suggest to the people of Ontario that this bill is going to ensure consumer protection -- I think it's very important for the people of Ontario to be aware that not all consumers are going to be protected. There are people, very probably in your communities, not so very far from you -- we're not talking about major corporations; we're talking about M&M meat shops, for example, or any kind of business where there would be compressors or machinery or equipment that would be required to run 24 hours a day. I say to the members of the government, what protection is there in this legislation for them? I was very happy that the member from Glengarry-Prescott-Russell made the point as well. I think it's very important that people in Ontario know that this bill will not do all they say it does.
Mr Maves: I just want to make a few comments here. I commended the member from Thunder Bay-Atikokan for actually speaking to the bill tonight. I just wanted to correct her on at least two of her mistakes, anyway.
She said that this bill will make the OEB become self-financing. She should know that it is already, always has been. This bill gives them a little bit more leeway for not having to get everything they want to do through cabinet.
She also said that municipal utilities will have to pick up the cost of the difference between the 4.3-cent cap and the market price, and that's incorrect.
My friend from Glengarry-Prescott-Russell wanted to know why we weren't importing power from Quebec. Part of the reason why we're not importing more power from Quebec is that we don't have the interconnectedness that we need to get more power from Quebec. We're currently working on an agreement with Quebec to actually put the connections in place, the transmission that we need to make importation of more power from Quebec a possibility. I think we're doing that with Manitoba also.
I'd like to finish off, though -- my colleague from Parry Sound-Muskoka mentioned that the Liberals were opposed to the seniors' tax credit, much to our chagrin. Some of my colleagues on this side of the table said, "Did they really vote against that? How could they be against tax relief for seniors?" I'm going to tell you how they're against tax relief for seniors. I'm going to read a quote from my friend Gerretsen from Kingston and the Islands, from Hansard. This is why, if you listen closely, colleagues, the Liberals are opposed to that tax cut. Gerretsen says of the seniors' property tax credit, "It goes directly contrary to the whole notion of government and what government should be all about, which is to collect taxes from people." So clearly the Liberals think it is their job, if they become the government, to simply collect taxes from people. That's why they voted against the seniors' tax credit.
Mrs McLeod: On a point of order, Mr Speaker: I would just ask that the member for Niagara Falls might wish to correct the record -- I won't ask him to do that -- when he reviews Hansard, just on the accuracy of what I had to say.
The Acting Speaker: Response?
Mr Lalonde: I'd like to say thanks to those who recognize the points that I brought to their attention.
The member for Niagara Falls, when he referred to the seniors' education tax -- let me tell you that at the present time, this government is going to invest $450 million. He says, "We don't like to collect taxes from seniors, but right now we're charging them transportation and delivery charges," of which everyone in this province could receive their equal share.
Another point also: we are going to proceed to spend $100 million just to rent generators. Have we contacted the federal government? At the present time, national defence has 300 generators, of which the majority are there in case of emergency. Have we contacted the federal public works to see if they could help us, without going through that $100 million expense? We know that they have them, because I have contacted them, but no one from this government has contacted them. You want to make yourself look good because you say, "We are going to spend $100 million just to make sure that we don't get stuck with brownouts," but we could save this foolish expense at the present time. That money could have been spent either on schools or health services, which we are going to spend just to get political benefit from this announcement.
The Acting Speaker: It being 9:30 of the clock, this House stands ad-journed until 1:30 of the clock tomorrow afternoon.
The House adjourned at 2130.