Electricity tariffs: no to indexation!


In view of the next provincial elections of 1er next October, I advise the government of François Legault to abandon the indexation of electricity rates.

And I invite Prime Minister François Legault to announce it in the next budget that his Minister of Finance, Éric Girard, will table on Tuesday, March 22.

Forewarned is forearmed ! If he doesn’t, too bad for François Legault and his troop of CAQ candidates.

They risk being accused by the opposition parties of knowingly impoverishing Quebec households through Hydro-Québec, which is a real cash cow for the government.

As proof: Hydro-Québec’s contribution to the revenues of the Québec government reached the record figure of $6.13 billion in 2021. This includes Hydro’s net profit of $3.56 billion; income of $1.23 billion from the QST that we pay on our electricity bill; plus $1.34 billion in hydro-electric royalties and other taxes.

  • Listen to Michel Girard’s economic editorial broadcast live every day at 6:50 a.m. at QUB-radio :

RUNNING INFLATION

With inflation galloping since last October, it is to be expected that inflation from last September 30 (2021) to next September 30 (2022) will gravitate between 5.0 and 6.0% .

Why am I talking about this period from September 2021 to September 2022?

Because under the new Act to simplify the process for establishing electricity distribution rates that it adopted in 2019, the Legault government decreed that electricity rates would increase annually based on the change in the consumer price index during this 12-month period. The increase would subsequently come into effect on 1er following April.

With this new law, the Legault government withdrew from the Régie de l’énergie the power to question Hydro’s annual rate increase requests that it considered too high and, consequently, to revise them at the decrease. Now, the Régie will be called upon to rule on rate increases once every five years. A real prank!

To the great relief of the leaders of Hydro-Québec, they no longer have to parade before the commissioners of the Régie de l’énergie to defend their requests for increases.

This is how the 1er next April, Hydro-Québec will increase its rates by 2.6%, which increase is based on the change in the consumer price index from September 30, 2020 to September 30, 2021.

Last year, i.e. the 1er April 2021, Hydro had increased its rates by 1.3%, which was in line with inflation during the period from September 2019 to September 2020.

HOUSEHOLDS GET IMPOVERISHED

Over the past year, the economic recovery has been solid, but at the same time we have seen a marked increase in the prices of a wide range of products and services: food, gas, transportation, housing, interest rates, etc.

Inflation is now at a dangerously high level. This has the effect of “severely” impoverishing low-income and middle-income households.

Since Hydro-Québec is making solid profits, while bringing in a lot of money to the Quebec state in taxes and royalties, the Legault government should reconsider its decision to set annual electricity rate increases based on inflation. .

At the very least, it would be wise to cap Hydro’s rate increases at, say, 2%.




Reference-www.journaldemontreal.com

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