(April 15, 2016) Ontario’s residential hydro customers will continue to use more of their paycheque to cover monthly hydro bills.

As they’ve done for the past eight years, residential electricity customers will see rate increases that far outpace inflation.

Beginning May 1st, the average price of power charged to Ontario households will increase by, on average, 8.9% from the same time last year. For those electricity customers on time-of-use (TOU) pricing – which now includes most customers across the province – some of the price hikes will be even more extreme.

For those customers consuming power between 11 a.m. and 5 p.m. – the “peak” period on TOU rates – the new rate will be nearly 12% higher compared to the same period last year. The off-peak and mid-peak rates will increase by 8.8% and 8.2%, respectively.

Using the latest figures from Statistics Canada, overall inflation in the last year in Ontario was 1.6% — or just a fraction of the increase in electricity rates (see graph).

The recent rate increase is part of a long-term trend. Since 2008, the rate charged to residential electricity customers in Ontario has far outpaced overall inflation during that time. While the average increase for the price of all goods (inflation) has increased by around 15% over that time, the off-peak, mid-peak and peak electricity rate has jumped by 118%, 83% and 105%, respectively (see graph).

A recent CPI study showed that in the last decade, Ontario rates have increased at the fastest rate in North America.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org or by phone at (416) 964-9223 ext 236