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MPP putting out call for tax audit

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In Energy
Feb 2nd, 2011
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Conservative rips into Liberals’ handling of debt retirement tax
By Cheryl Browne Special to the Examiner January 28 2011
Jeanneke van Hattem is frustrated by what she says is a veil of secrecy surrounding the debt retirement tax she’s been paying on her hydro bill for the past seven years.
As publisher of Focus 50 Plus magazine, van Hattem is one of millions of Ontario taxpayers who’ve been paying the charges on their hydro bill every month.
“I’ve always wondered when it was going to come off our bill,” said van Hattem.
Looking at her bill, she figures she’s paid about $7 a month since May 2004 to help pay down the hydro debt initially created to pay for the sale of hydro and the under-charging of usage rates back in the 1980s.
For van Hattem alone, that’s about $700 she’s shelled out so far towards the debt retirement charge, which was to have been paid off in 2012.
At a time of historically low interest rates, the Liberals now say the debt will not be paid until as late as 2018, with no explanation of why the date keeps getting pushed back, or where the money is going, said Garfield Dunlop MPP Simcoe North.
He’s calling for a forensic audit to explain why Ontario families paid $7.8 billion of a $7.8 billion debt, yet Premier Dalton McGuinty plans to extend the charge and collect an additional $1 billion a year for an additional six years, he said.
“Barrie families need to know why the McGuinty Liberals will continue to charge them $1 billion a year, plus HST, for a debt that should be on track to be paid off next year. Barrie families are rightly concerned that this is looking like a permanent tax grab,” said Dunlop.
“Although the McGuinty government expects hard-working Barrie families to pay this charge every month for an extra six years, they don’t want to tell Barrie families what they’re doing with this money,” he said.
However, Barrie MPP Aileen Carroll, was quick to point out that, before the Conservatives were voted out in 2003, they had increased the hydro debt from $19.4-billion to $20.5-billion.
She says the Liberal government began paying back the debt in 2004 and have paid $1 billion a year off since, leaving the debt at around $14.8 billion.
“We can’t stop collecting — we haven’t paid off the debt,” said Carroll.
Van Hattem said, while it’s not a huge sum, she’d like to know when it’s going to stop.
“If there’s a project they want to invest in, I’d be glad to give up my $7,” she said. “But not without being asked. I really don’t feel as though I’ve been given proper information about where this money is going.”
Based on residences consuming 800 kilowatts a month, the average hydro bill costs about $114 today, whereas those same homeowners were charged $53 in 1990.
Dunlop estimates homeowners have seen the cost of hydro rise 75% since 2005.
Now, with the HST charges, people who were hoping the bill would drop by 7% when the debt retirement charge was removed won’t see the deduction any time soon.
Carroll said they’ve been reducing the principal on the debt, but there’s still a fair amount to pay back from the, “(Mike) Harris/(Tim) Hudak disaster rate freeze during their attempt to de-regulate pricing.”
Carroll’s referring to the former premier and cabinet minister in the previous Tory government who were responsible for ignoring hydro issues such as investing in energy infrastructure, which didn’t produce adequate energy to meet the growing demand.
By freezing rates for customers and businesses, the debt continued to grow until hydro was sold.
The debt retirement charges on consumers’ bills began back in 2002.

 

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