WHEN FORMER U.S. PRESIDENT George W. Bush was informed of the gravity of the financial crisis in the autumn of 2008, with the accompanying need for a massive public bailout, the bewildered Bush is reputed to have said: “How did this happen?”

It’s a question that might well be asked of the current patchwork of energy policies in Ontario, as well as of the province’s dubious distinction as one of the highest-priced places for power in North America.

That’s right; resources rich, tax-base rich, real estate rich Ontario has electricity rates more appropriate for European countries with none of the above advantages.

How did it happen? The current trend is to blame the long-reigning Liberals. And, indeed, many of their policies seem ill conceived. The list of their missteps includes enormous, guaranteed premiums for power from sustainable but still highly inefficient sources such as wind and solar, as well as cancelling two gas-fired generating plants for purely political reasons.

But, as with most intractable problems, it’s not that simple. Before the body blow that Ontario’s manufacturers have taken in the post-financial crisis period, demand for electricity had increased steadily for decades. And Ontarians seemed enthusiastic about priming that pump. From the hopelessly wrong-headed “Live Better Electrically” campaign of the 1960s to the rush to nuclear power in the 1970s and the lack of careful, incremental planning for power conservation in the 1980s and 1990s, Ontario’s energy policies have been poorly researched and executed.

The results have not been good. According to a 2013 report, big companies in Toronto pay about 11¢ per kilowatt hour (kWh) for electricity, while the rate is 4.8¢ per kWh in Montreal, 5.45¢ in Chicago and 8.12¢ in Detroit. This is so even though demand for power has dropped sharply in Ontario since 2008 and the province’s utilities now pay other jurisdictions just to take their excess electricity at times. Often, those jurisdictions sell it to someone else.

Consumers are also getting whacked. In December, the minority Liberals released a long-term energy plan for Ontario. While that plan includes some steps to reduce the rate of future price increases – $15 billion was saved by cancelling plans for two new nuclear stations and an overly rich deal with Samsung Group for “clean” energy generation was renegotiated – households are still looking at a 33% price increase over the next five years. By 2016, households now paying $127 a month for power will be paying $167. Included in the increase is the phasing out of the Ontario Clean Energy Benefit, which was designed to cushion the impact of new costs associated with Ontario’s decision to pay above-market rates for electricity generated from sustainable sources.

The impact on businesses in the province is significant. With all costs rising, entrepreneurs are looking for ways to cut back. If they can’t, they may locate elsewhere and new businesses may not choose Ontario. By all means, the province should be looking for ways to diversify and stabilize its energy supply; the lessons of southern Ontario’s December ice storm made that clear enough. But policies that create such a large price gap between Ontario and its neighbours must be revisited.

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