We have long argued that the Ontario government’s headlong rush to convert Canada’s industrial heartland to “green” energy would turn out to be nothing but a colossal waste of money. Since most alternative energies remain commercially impractical (that’s why they’re still alternative and not mainstream), the blind rush by Dalton McGuinty’s Liberal government to substitute wind, solar and bio energy for coal and oil was never likely to produce much new energy, just higher power rates for residential and industrial consumers. But even we underestimated the extent to which the Ontario Liberals’ 2009 Green Energy Act had failed in just over two-year’s time.
In one of the most scathing indictments of government mismanagement we have ever witnessed, Ontario Auditor-General Jim McCarter reported Monday that Mr. McGuinty’s green dream has rapidly become an $8-billion nightmare for Ontario taxpayers and electricity users. Almost no new net power will be generated by all the green-energy projects hastily funded since the bill was passed, but the average residential consumer will see more than $400 a year added to his power bill for a decade to pay for all the bad contracts with and subsidies to eco-friendly power suppliers.
Over the past year, the McGuinty Liberals have been forced to conduct a series of embarrassing climbdowns from their grand promises about the benefits that would flow from the switch from carbon fuels to renewables.
Last spring, the provincial government announced it would no longer push for the building of wind-power turbines in the Great Lakes or any other freshwater sites around the province. The technology, it suddenly claimed, was unproven. The decision was purely scientific, Energy Minister Brad Duguid insisted. It had nothing whatever to do with the turbines’ unpopularity with landowners who would also be voters in October’s provincial election. “There isn’t a lot of science on freshwater offshore wind,” Mr. Duguid admitted. “We need some time to review the science and we don’t have it today.”
Perhaps the Liberals should have realized that before they earmarked over $1-billion for the initiative.
But as Auditor-General McCarter pointed out several times in his annual report, this leap-before-you-look approach was typical of the McGuinty government’s haste to approve and fund environmental projects. For instance, hundreds of millions have been paid – and hundreds of millions more will have to be paid in the coming decade – to landowners who agreed to put up small-scale solar-energy farms on their property. Only after scores of these projects had been approved and paid for, though, did the Ontario government realize there was no economical way to connect all them to the provincial power grid, so little of this expensive electricity is reaching homes or factories.
Guidelines for ensuring public grants were going to worthy projects were ignored. Financial regulations were violated. Few cost-benefit analyses were performed nor business plans produced. Lower-cost alternatives were ignored, despite warnings from civil servants, and the whole scheme was largely designed by environmentalists and green-industry lobbyists – “stakeholders” in the government’s euphemistic rhetoric. “Normal due diligence for an expenditure of this magnitude had not been followed,” Mr. McCarter concluded.
If the same reckless approach were taken with shareholders’ money in a private company, securities regulators would almost surely recommend charges be laid against those behind such a scheme.
Heads should roll in this case, too. The trouble is, as Mr. McCarter also identified, much of the final decision-making was tightly controlled by Premier McGuinty himself. And we suspect Mr. McGuinty is unlikely to fire himself from Cabinet. Though re-elected with only a minority government in October’s vote, the Liberals are only two votes shy of a majority, and neither opposition Progressive Conservatives or provincial NDP are likely to topple Mr. McGuinty so soon after an election. The people of Ontario are likely stuck with him for the time being – as they are certainly stuck with the high costs of his green dreams.
While it’s too late for Ontario to avoid these costly mistakes, other provinces can still learn from them. Other provincial governments may be tempted to consider similar green-energy programs, either for environmental reasons or in the hopes of establishing a productive, lucrative and morally pure industry by the magic of government fiat and wishful thinking. Let Mr. McCarter’s findings be a warning for them: Don’t copy the McGuinty example. It is good for neither the environment nor for consumers.
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