The Canadian Taxpayers Federation says Ontario's promised tax break on hydro bills will do little to put more money in your pocket.
The province is hoping to pop ballooning energy costs by offering an 8% rebate -- the equivalent of the provincial portion of the HST -- on your hydro bills, starting next year.
But Christine Van Geyn, the Ontario director for the Canadian Taxpayers Federation, says the Liberal government's carbon tax also comes into effect on January 1.
Van Geyn says, if you use natural gas to heat your home or drive a car to work, the province's cap and trade plans will cost you more than an HST rebate will save you.
"For the hydro benefit [you're expected to save] $130, and the average cost estimate for the cap and trade home heating tax is going to be $156. So, you'll actually be paying more with these government policies," she says.
What's needed to drive down electricity rates in the long term, Van Geyn says, is not a rebate.
She says the government needs to stop procuring renewable generation, because there's an oversupply of energy in Ontario.
"The government has committed to long term contracts above market rates," says Van Geyn. "They need to get out of these contracts in the cases where they won't be paying a penalty."
In some ways, she says it really is taking from one pocket and putting it into the other, as eliminating HST will result in about $1-billion in lost revenue.
"I don't like to refer to tax cuts as an expense because it is our own money, but how are they going to make up that billion dollars that they're going to be giving to us in a rebate?" says Van Geyn. "Well it's probably going to be in the form of other taxes, and we do know that the carbon tax is going to be one of the ways they make up that revenue."
The new carbon tax is expected to add $5 a month to your home heating bill, and increase gas by about $0.04 a litre.
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