Fraser Institute says increasing cost of electricity, heat and gasoline hitting low-income households hardest
TORONTO - A new study by the Fraser Institute says the rising cost of electricity is increasing energy poverty in Canada, with more than one million households now spending more than 10% of their incomes solely on electricity and home heating fuel.
The fiscally conservative think-tank says these 1,086,860 households in 2013 — the last year for which statistics are available — represent 7.9% of all households, an increase of 9.4% since 2010, when the number was 7.2%.
When the cost of a third necessity for most families — gasoline — is added in, the number of households in energy poverty soars to 2,678,293, or almost one in five, at 19.4%.
These numbers will rise in coming years as Canadian governments pour ever-increasing amounts of money into expensive and unreliable green energy projects such as wind turbines and solar panels, as well as introduce carbon pricing.
The Fraser Institute study released Tuesday, “Energy Costs and Canadian Households: How Much Are We Spending?” by Kenneth P. Green, Taylor Jackson, Ian Herzog and Milagros Palacios, also found low-income households — those with an annual income of $47,700 or less — are hardest hit by energy poverty, which dramatically reduces their ability to purchase other necessities, such as food.
It warns: “The high incidence of energy poverty in Canada, particularly when gasoline expenditures are included, should be of central concern when policies regarding energy are devised. Policies that raise prices could exacerbate problems faced by families who are in energy poverty, or those on the cusp of energy poverty.”
Despite this, Prime Minister Justin Trudeau wants to create a national carbon price.
This will further hike electricity prices and the cost of most consumer goods and services, since they are created using fossil fuel energy, which produces greenhouse gas emissions linked to climate change when burned.
Meanwhile, in Ontario, Premier Kathleen Wynne’s Liberal government estimates the cap-and-trade carbon pricing scheme it will introduce next year will add $156 annually to the energy and gasoline bill of the average household in 2017 alone.
Premier Rachel Notley’s NDP government in Alberta estimates its new carbon tax, beginning in 2017, will add $320 that year and $470 in 2018 to the cost of electricity, heating and transportation for the average household.
Across Canada, the Fraser Institute notes, energy costs have risen faster than incomes, increasing 103% between 1994 and 2013, compared to an 87% increase in disposable income per person.
Canada’s experience mirrors that of the U.K., which has driven increasing numbers of its citizens into fuel poverty because of the high cost of heavily subsidized green energy.
One measure that would help slow the growth rate of fuel poverty would be a commitment from Canada’s federal and provincial governments that 100% of all monies raised through carbon pricing, which increases taxes and prices on consumption, will be returned directly to the public in income tax cuts and grants to the poor.
No government has made such a commitment, although B.C.’s carbon tax comes closest.