Ontario Liberals hope hydro plan will douse voter anger

Premier Kathleen Wynne said "mistake" or "mistakes" six times while announcing her plan to cut the average hydro bill for Ontario residents and businesses by 17 per cent this summer.

Wynne was referring to decisions by previous Liberal, Progressive Conservativeand NDP governments that dumped a hefty chunk of the costs to rebuild the province'selectricity system on to the hydro customers of 2017.

But the thought must have crossed her mind that she had made her own big political mistake in allowing hydro prices to become the dominant issue confronting her majority government.

• Hydro rates to drop 17%, but Ontarians will pay for it later

The move Wynne announced Thursday will start to take effect on hydro bills this summer, about a year before the June 2018 election. Party brass knew they had to take action on spiking hydro prices to have any hope of winning, but they also know that this move aloneis nowhere near enough to let them coast to victory.

"I don't expect a celebration as we make these announcements,"Wynne told a news conference Thursday."People are struggling with electricity costs that are too much for their families to bear.

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"Our hope is that it will take enough heat out of the issue that people will be able to concentrate on everything else the government is doing," a senior Liberal official, who spoke to CBC News on condition of anonymity, said in an interview.

You can sense of how dramatically the Liberals felt they had to move by their insistence on pitching this plan as cutting hydro bills by 25 per cent. That figureincludes an eightper cent cut that has already happened, a rebate on the provincial portion of the HST that kicked in Jan.1.

It would seem that a cut of 17 per cent just doesn't sound juicy enough.

Last month, CBC News was the first to report the government was considering the plan that it announced Thursday. But at that time, they wereaiming for discounts in the range of eight per cent. Since then, Wynne's team realized squelching voter anger over hydro bills required something more significant.

"When you asked [hydro customers]what their expectations were, it was quite clear it needed to be much more than another eight per cent,"said the senior Liberal.

Party officials deny they set a target of a 25 per cent cutand built the policy around that number. Instead, they say they aimed to cut bills as much as possible while still being fiscally responsible.

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The cut is predicated on deferring costs in the electricity system over a longer period of time than originally planned. It will mean over a 30-year period, customers will pay as much as $25 billion in interest.

After hydro bills drop in the summer, there's a promise that rates won't be allowed to rise by more than the rate of inflation during the following five years. But there are no guarantees about what happens to rates after that.

'Bandage on a bullet wound'

The opposition parties hope voters will absorb all this fine print in the deal, rather than seeonly the immediate reduction to the bottom line on their monthly bills.

"I think the majority of people are going to be disappointed that this is just for show," said PC Leader PatrickBrown. "This is a bandage on a bullet wound."

NDP Deputy Leader Jagmeet Singh said the plan isn't designed tobenefit Ontarians in the long run, but to help the Liberals right now.

"The Liberal Party hopes ... to have a short-term impact that gives them a bump for the elections," Singh said in an interview Thursday. "It's a short-term vision to get re-elected, and people are going to see through that."