QUEEN’S PARK – Thunder Bay Atikokan MPP Bill Mauro was up in Queen’s Park on Tuesday. Mauro was engaged in debate over Bill 109, the “Enhancement of the Ontario Energy and Property Tax Credit for Seniors and Ontario Families Act, 2010.
Here is the debate as it occurred in the Ontario Legislature:
Bill Mauro MPP (Thunder Bay Atikokan) : I’m pleased this afternoon to have a little bit of time to provide my comments on this particular piece of legislation, Bill 109, the Enhancement of the Ontario Energy and Property Tax Credit for Seniors and Ontario Families Act, 2010.
I’ve been sitting here for most of the afternoon, and when I arrived today—as most people will know, this is a proposed credit. Clearly, on our side of the House, we’re very hopeful that both opposition parties are going to find the capacity to support this when we get to third reading vote. From what I’m hearing, it sounds like that in fact might be the case, so we look forward to having their support on this particular piece of legislation.
I think for those who have followed the goings-on in the Legislature perhaps closer than others, they will know that this particular piece of legislation had its genesis some time ago. I’m going to give a bit of background on where we were and how this got started.
Some will remember that it was actually in 2009 that we allocated about $750 million to the property tax credit. That credit was for low- and middle-income Ontarians, and exactly how much you would have received was based on a formula involving your income and how much you had paid in property taxes or rent—I think it’s important to remind people who are following the debate that not only does this credit apply to those who own a home, but it also applies, should it pass, to those who pay rent. As well—a further piece of that—it’s important to note that people who live in a long-term-care home will be eligible for the energy component of this particular credit. So there are a couple of extra pieces that I think people need to be aware of.
Under the credit in 2009, singles who earned under $20,000 and couples or parents who earned under $25,000 would have been eligible for the full credit. That’s the 2009 position. What we have now is a new announcement today—this is the new credit that we’re now discussing—and that tax credit will be enhanced from about $750 million to about $1.3 billion. These changes will primarily impact seniors. We’re raising the income threshold for seniors. Single seniors who earn $25,000 or under will receive the full credit, and senior couples who earn $30,000 or under will receive the full credit. So we’re increasing the threshold for those two groups by $5,000 per category. This is going to extend the credit to 740,000 seniors in the province of Ontario, so we’re building on our support to them.
The amount you receive on the credit is going to be phased out gradually. Like most credits, this is income-tested. This isn’t unusual. It’s a progressive way to implement a tax system, and we’re doing that with this credit as well. So two cents on every dollar you make over the threshold is when you will begin to see the phase-out: approximately $20 per $1,000 or so.
In total, the Ontario property and energy tax credits will benefit 2.8 million low- and middle-income Ontarians. The enhanced credit will work like the current credit. The first payment will be a lump sum, but after that, beginning in July 2011, the payments will be stagered so that people have access to the money when they need it. In the same way that the Ontario sales tax credit and HST rebates were staggered, people will be receiving cheques throughout the year.
I’ll now talk a little bit about non-seniors. We’re going to see where a family or single person who owns or rents a home would be able to claim an energy amount of up to $200. In addition, they’d be able to claim a property tax amount of $50 plus 10% of their occupancy cost, to a maximum of $700. The property tax amount would not be allowed to exceed the occupancy cost. The maximum energy and property tax amounts that could be claimed would be $900—this is for the non-senior category. The total of these amounts would be reduced by 2% of the adjusted family net income, as I mentioned earlier.
Additional benefits to seniors: A senior family or a single senior who owns or rents a home would be able to claim an energy amount of up to $200. In addition, they would be able to claim a property tax amount of $425 plus 10% of their occupancy costs, to a maximum of $825. The property tax amount would not be allowed to exceed the occupancy cost. The maximum energy and property tax amounts that could be claimed would be $1,025. So this is very significant. The total of these amounts would be reduced by 2%, again, as I just said in the previous categories. So this is indeed significant, and that’s why we feel it is important to bring this legislation here, and we’re very excited that it sounds like we’re going to receive the support of the opposition parties on this credit.
I would say that in my seven years here—and I’m sure that for members who have been even longer than that, and there are many who have—very few issues tend to grab the attention of the public in Ontario like issues around electricity costs. I understand that, and that’s fine. That’s why I think, when we on this side of the House have the opportunity, that we get our feet as often as possible and speak directly to this issue.
Just last week—this one is, I guess it’s fair to say, easy messaging for the opposition parties and something they can have a lot of fun with. We acknowledge that over here. It’s easy to talk about tax increases. But unfortunately, what it seems is happening when this issue is debated is that the other half of the story is not being told.
Just last week I had the opportunity to be back in my riding of Thunder Bay–Atikokan. The Premier was there for almost a full day; we had a great day. The NOMA conference was on—the Northern Ontario Municipal Association. At the same time, the leader of the third party was in Thunder Bay. She took the time to hold a press conference—as is what they do, and that’s fine—and she talked about the impact of HST on hydro bills. Of course, that’s all she talked about.
This is the other half of the story that I made reference to earlier in my remarks. They don’t talk about the significant package of tax reforms that were introduced at the same time as the HST, thereby leaving out the full story. This property tax credit that we’re talking about here today, as I’ve mentioned in my opening remarks—and it was important to get it on the record. We’re talking about, for seniors and non-seniors, the energy component being up to $200, just in this credit alone. When the member from the official opposition from Parry Sound–Muskoka spoke, he made reference to the fact that the northern energy credit, which is additional to what we’re talking about today, was not available to people who would be receiving this particular credit.
We took the time to check. In fact, it’s information that is wrong. In fact, the northern energy credit can be stacked on top of this credit so that seniors and homeowners and renters in northern Ontario not only will be able to get up to $200 on this credit that we’re discussing here today, but they as a single will be eligible for a further $130 credit and they as a couple will be eligible for an additional $200 credit. It is indeed very significant.
People are calling this “modest,” but that’s when they only talk about the one credit, and they’re linking it all the time back to the impact of the HST on hydro bills and the cost of living. They’re talking about it as being modest in isolation. But that’s why I referenced the northern energy credit, and that’s why I referenced earlier the significant package of tax reforms that were introduced at the same time as the HST. They want to talk about the hydro bill and the ability of families and homeowners and renters in the province of Ontario to manage this cost.
One of the other significant tax reforms we brought in when the HST was introduced was a 1% reduction in the personal income tax rate of everybody in the province of Ontario, up to almost $37,000—$36,000 and change; so I’ll round it up to $37,000. That 1% reduction for those people in the personal income tax rate means $370 to them. If you’re a couple and each of you is earning $37,000, that 1% reduction in the personal income tax rate means $740 to you. If you earn $25,000, you get $250; if you earn $30,000, you get $300; if you earn up to the maximum of $37,000, it’s $370. Why is that important? Because when they talk about the HST and the impact on the hydro bill, they don’t talk about the other tax reforms that we’ve brought in.
Let’s think about the $370—if you’re a couple, $740 back in your pocket if you’re both earning $37,000. To use up $100 of what we just gave you back—and I’m speaking directly to the people in the province of Ontario. It’s important that if they’re going to remember anything about this debate, they might remember this piece. To use up $100 of tax relief that our government has given you through various measures, you have to spend $1,250 on something that was previously exempt from the PST. So if, by example, we use for the case of round numbers your hydro bill, which is the focus of the opposition parties, and if for the sake of round numbers we say that your hydro bill last year was $1,000—some people are paying more; we get that—but just for the sake of round numbers to give the example: If you paid $1,000 on your hydro bill last year, the 8% PST, as a result of the harmonization of the sales tax, will add $80 on your hydro bill. That’s if you spent $1,000 to accumulate an $80 expense. I just explained that if you earn $37,000, you’re going to have $370 more, and if you have a partner who’s earning $37,000, they’re going to get $370 more. That’s $740; you had to spend $1,250 just to use up $100 of it.
Today I’m talking about two other credits here. The one we’re talking about here today, called the Ontario energy and property tax credit, will give seniors and non-seniors an additional up to $200 more of energy tax relief. As well, people in northern Ontario, if they’re single, will receive up to $130 more, and up to $200 if they’re a couple.
I think it’s important that, after everything has been discussed on the tax piece, on the effect on hydro bills, we try to remember, with hopefully some clarity, that little example that I have laid out there for people when it comes to the language and the rhetoric that’s often used by the opposition parties to make this look, in my mind, much more onerous than perhaps it really is.
Now, much of the focus on this particular credit has been on the energy part of it, and I think it’s important that we remind people about the record of the other parties when they had an opportunity to manage the energy file. When the NDP were in power, two things of note, I would suggest, occurred.
Interjection: Only two?
Mr. Bill Mauro: There were many more things, but two things of note.
Energy prices in the province of Ontario under the NDP went up by about 40%, give or take. One of the things that I remember very clearly, that perhaps is even more egregious, is that under the Peterson government in the late 1980s, they had negotiated a deal to bring in 1,000 megawatts of very affordable, very clean and very renewable energy from the province of Manitoba—1,000. The deal was signed, and in the early 1990s under the NDP government, for their own reasons, which I’m sure we might hear a little bit about today, they cancelled that deal, which would have brought 1,000 megawatts in through northwestern Ontario and which would have been a huge, huge construction project for northwestern Ontario. They cancelled that project. That energy would have been online, had it gone forward in the early 1990s, somewhere around the year 2000, and the province of Ontario would have had the benefit of that power for around 10 years now. But they made a decision to cancel that project. We all have a history when it comes to managing power in the province of Ontario.
I listened to the member from Toronto–Danforth, who has a long history with these issues. With respect, I’m having a hard time understanding exactly where he is on it. He speaks very clearly and very often in opposition to nuclear. He spoke, perhaps not as directly, but indirectly, in opposition to the decisions that we’ve made on green energy. He has spoken very clearly against gas-powered energy, and he has spoken, obviously, very clearly against the use of coal. Well, we’ve got to make a choice.
The member from the official opposition, in his response to the member from Toronto–Danforth, talked about Quebec selling power for six cents a kilowatt hour—I think he said it was to Massachusetts—and compared the energy rates in Quebec to the energy rates in Ontario. Well, we all know that Quebec has always been cheaper. We wish we were that low. It would be wonderful. But we also all know that, in Quebec, they’re blessed to have the vast majority of their energy needs met by hydraulic power, and most of that hydraulic power has been in place for a long time. They’re blessed that way, just like we could say about British Columbia as well. They’ve been very fortunate.
I will also talk a little bit about the position of the official opposition when it comes to this as well. Previous speakers have spoken on this, and we listen to them respectfully when they get up and make their comments on our position on the energy file. But, again, many of us will remember as well, when we came into this position in 2003, what had occurred before we got here. That was that the Conservative government of the day was breaking up the old Ontario Hydro into four or five different private corporations and that the market would rule, that everything was going to be great. The free hand of the economy was going to make everything good. We’d have lots of power. It would be cheap. It would be affordable. More supply would come online—as is, I would say, their ideological predisposition, and that’s fine. They took that approach. It’s not an approach I would favour.
I think that if you go back to the Margaret Thatcher days, if they had paid a little bit of attention to what went on in England when that approach was tried, perhaps they would have seen that it was disastrous. It did not work well. But anyway, they went forward with it. Well, what happened there? That experiment, I guess we would call it, didn’t work quite so well.
In very short order, I think it was November 2002 when the market was open, the Conservative government of the day reversed their position in terms of allowing the free market to reign when it came to energy in the province of Ontario. They reversed their position and brought in a rate cap, because when they allowed it to go to the free market, as was predictable to almost everyone except them, prices spiked. There were concerns about demand. There was no investment being made in infrastructure. I can tell you, as somebody who lives in northwestern Ontario, when they tried to sell off Hydro One, the transmission infrastructure in Ontario—and the Conservatives were trying to do that—that concerned me greatly, because I’m not sure what private sector company would be able to find an appropriate rate of return on their investment, when you think about the infrastructure required in northwestern Ontario to supply electricity. I’m not sure how well that would have been maintained. But in any event, they changed their position. They flipped on it and they brought in a rate cap.
They’ve been talking to us about the price of electricity that we are now charging here in the province of Ontario. They capped it, as I recall, somewhere around four-point-something cents; I think perhaps 4.3 cents, give or take. They capped it. Well, the result of the cap was what? Stranded debt. The Conservatives made a decision, when they saw the folly of their way on the free market when it came to electricity, to cap the price so that the ratepayer, on their bill that arrived at their door on a monthly or a bimonthly basis, would not see a dramatic increase in price. But what was happening, of course, was that the true cost of electricity was not being paid for off of the rate base, but that the cost of electricity was now transferred to the stranded debt. And so a bulk of what exists there—I’m not sure what that number is; it’s in the tens of billions. I hear different numbers from time to time, so it’s hard to know exactly what the number is. It’s significant, and we do know that that decision added a significant volume of money to the debt.
The Conservatives made a decision that they didn’t want the ratepayer to pay the price, the true cost of electricity. That was their approach; we have had our approach.
I think, as you heard the member from Mississauga say earlier, every government takes a different approach to this. The prices that we are charging today in Ontario are being compared to prices that we were being charged 10 and 20 years ago. I’m not sure how anybody expects that to remain the case.
What we do know over here, on our side of the government, is that this is very important. We understand the value of affordable electricity, especially, I would say, to large industries in Ontario. It’s why, for about four or five years now, we have been bringing in very affordable pricing programs to support large industry in Ontario. It’s why in this budget of 2010 we further enhanced those programs significantly: a $450-million energy support program for large industry in Ontario; a three-year program at $150 million a year. There is more good news on that front. I think that we’ve announced that we haven’t done a good enough job of communicating to the public in terms of support for large industry—I think up to 230 or 250 of the largest energy users in the province of Ontario—that we will do a better job of ensuring that people are aware of in very short order.
I can see my time is almost up. I think it’s important. I would hope and repeat that people will remember the entire package of tax reforms that we have brought in over the last year and a half or so, remembering again the one example that I put on the table: personal income tax reduction. It’s 1% on the first $37,000, or $370. If there’s a couple in the same home, that’s $740 in your pocket. If your energy bill was $1,000, the HST adds 8% to it: That’s $80 over the course of a year, if it’s a $1,000 bill over a year. We just talked about $740. You have to spend $1,250 to use up $100 of tax relief.
The sky isn’t falling. We recognize the importance of this issue to the ratepayers in the province of Ontario, to residential users and to industry in the province of Ontario. It’s why we’ve taken the significant steps that we have on the tax reform side as we go forward on this front.
I look forward to the remarks from the members in the opposition and look forward to addressing them with my two-minuter.
The Acting Speaker (Ms. Cheri DiNovo): Questions and comments?
Mr. Norman W. Sterling: Well, the sky is falling. As the member wrapped up his remarks, he said, “The sky isn’t falling.” I’d like to tell him that the sky is falling because of the policies of the McGuinty government, where you’re going out and purchasing solar power for 80 cents a kilowatt hour when we’re paying six cents a kilowatt hour for in it our homes. Add the figures up. It doesn’t make sense.
As well, I’d like to point out to the member opposite that the stranded debt was not created by the last government. The stranded debt was created by the Peterson government from 1985 to 1990. I remember; I was sitting in opposition at the time. I couldn’t believe the amount of money—something like a $15-billion overrun on the Darlington nuclear plant. Their incompetence led to a huge, huge debt on Ontario Hydro at the time.
As well, at that time, they had another hare-brained scheme, and that was the introduction of non-utility generators, where they signed, like they’re signing today, 20-year contracts for power produced by natural gas generators at 12 and 13 cents a kilowatt hour when power was selling for four or five cents a kilowatt hour. Unfortunately, these long-term, 20-year contracts for buying power at 80 cents—40 cents, in some cases—per kilowatt hour are mortgaging the future of our children.
This government has made a bed for itself with regard to the misplacement of any logic towards our electricity supply. It’s not only going to hurt seniors in their homes, residents in their homes, but it’s also going to hurt the future of our economy and jobs for our children.
The Acting Speaker (Ms. Cheri DiNovo): Questions and comments?
Mr. Howard Hampton: I listened with interest to my colleague from Thunder Bay–Atikokan. He goes on, over and over and over again, about tax credits. But there’s a big problem. You see, people can’t afford to pay their hydro bill now, today. They’re not talking about a year from now or a year and a half from now; they’re talking about today. People can’t afford to pay their hydro bill today. Where I come from in northern Ontario, they’ve already turned their heat on, and they can’t pay their heating bill.
What is the response of this government? It is so typical of the McGuinty government to promise people that something will happen in the future; that next year, people will get a tax credit, or that next May, people will get a tax credit. But people can’t pay their hydro bill now. They can’t pay their heating bill now.
We’ve had many nights where we’ve already had frost. If you can’t pay your heating bill, and the temperature is down below zero—I don’t know about members of the Liberal government, but you’ve got serious problems, and telling people, “We promise this will be taken care of next May” or “This will be taken care of in the election a year from now,” doesn’t help pay the hydro bill or the heating bill today.
Let me tell you what happens when you can’t pay your hydro bill: You get a bigger hydro bill. Then you are told to pay a security deposit, which in some cases is in the thousands of dollars. And people don’t have the money now.
That’s the problem with this: another promise to do something in the future when people don’t have the money now.
The Acting Speaker (Ms. Cheri DiNovo): Questions and comments?
Mr. Mario Sergio: We don’t have to go up north to start the furnace already, according to the member from Rainy River.
Mr. Mario Sergio: Yes. We’ve already started it down here too.
I have to compliment the member from Thunder Bay–Atikokan for a very eloquent and detailed—details of the bill here.
I have to say that in my area I have a very large population of seniors: seniors as individuals and seniors as families. I can’t imagine either a family or one of those seniors saying that almost $100 a month in property and energy tax relief is not going to help them. Of course it is. I’ll tell you, it is. It’s a big help.
If we are saying, “It’s not enough,” well, maybe it’s not enough, but given the tough time that we have ahead of us, and with the prices of everything going up, we have to face ourselves, and they understand the fact that, yes, things are going up. If they have to make a reasonable living, things are going up. If we have to have availability of power so we can turn the heat on, then, yes, indeed, we have to pay for that as well. At least we have the luxury, you may call it, or convenience that we can just turn on the switch and say that at least we are comfortable. So not to appreciate that $100 a month at most for our seniors, that it’s nothing—I think we have to recognize that even in the circumstances, it’s a big help. I think because the government recognizes the need out there, it is doing this. I hope that as we move along, we may continue to assist and improve the situation.
The Acting Speaker (Ms. Cheri DiNovo): Questions and comments? The member for Thunder Bay–Atikokan has up to two minutes to respond.
Mr. Bill Mauro: I want to thank the members from Carleton–Mississippi Mills, Kenora–Rainy River and York West for their comments.
In regard to the comments from the member from Carleton–Mississippi Mills, my reference to the stranded debt did not say that the Conservatives started the stranded debt. What it was meant to do, I think I pretty clearly stated, was exhibit the policy position that they took. They tried to hide the true cost of power from the ratepayer by transferring it to the stranded debt. They had gone to a free market. It didn’t work. They capped the rates at 4.3 cents per kilowatt hour. “What the hell are we going to do with this? We’re going to transfer it to the stranded debt.” That’s what that point was. And that’s what they did. The record is clear.
The member from Kenora–Rainy River talks about next May, next month. No. In my 20 minutes, I had an opportunity to put on the record a couple of the examples of reductions that are in place now. I focused very clearly on the personal income tax reduction that took effect on January 1, 2010, fully nine months ago. We’re three quarters of the way through the year. People who are eligible for that in a home, if there are two people, at $37,000 a year, might have 600 bucks of that in their pocket already. So it’s not about next May. It’s there now. It’s already there, as well as the transition cheques, the first of which went out in July, some people receiving significant amounts—well, everybody receiving a good chunk of money on that one. So already there has been significant relief.
I want to thank the member from York West as well, who pointed out very clearly that the maximum under this particular credit that we’re discussing today is $200, but even if you get a reduced amount, even if you only get half of it because your income is higher and even if you’re only eligible for $100 of that credit, you’re going to have to spend on energy $1,250 before you use up that $100 of the credit.