Ontario government pledges lower electricity costs

Mon Sep 12, 2016 1:46pm EDT
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OTTAWA, Sept 12 (Reuters) - The Ontario government pledged on Monday to lower electricity costs for residents of the Canadian province as it sought to provide balm for an issue that has become an irritant with voters.

In a speech that outlined the government's priorities as it attempts to galvanize support about two years into its rule, the provincial Liberals said they will introduce legislation that would provide an 8 percent rebate on electricity bills for consumers and small businesses.

The rebate would effectively remove the province's portion of sales tax charged to consumers and would go into effect at the start of next year. The Ontario Liberals hold a majority in the province's parliament, meaning the legislation would be virtually guaranteed to pass.

The government estimated that about five million households and small businesses will be eligible for the rebate, saving the average household about C$130 ($100) a year.

The Liberals also promised to provide additional relief to rural residents and to expand its program to encourage large businesses to reduce energy consumption during peak times.

Rising electricity bills have hurt the Liberals' popularity with voters. The party lost a by-election earlier this month to the Conservatives for a Toronto seat that had long been held by the Liberals.

In Monday's speech, the Liberals said that the rising costs over the past decade have been related to removing coal-fired generation from the electricity system. But opposition parties have called on the government to halt the privatization of utility Hydro One Ltd, which they have said is raising costs for consumers.

The government also reiterated its promise to balance the budget in the fiscal year 2017-18.

($1 = $1.3076 Canadian) (Reporting by Leah Schnurr; Editing by Phil Berlowitz)