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Province to help poor pay the bills

$2 million will cover hydro costs
$10 million will go to tenant aid

Toronto Star - March 29, 2004

by Caroline Mallan — Queen's Park Bureau Chief

Low-income hydro customers will get some relief from higher electricity rates under a $2-million assistance plan to be unveiled by the Ontario government today.

The Liberal government will also set aside $10 million to allow municipalities around the province to give tenants one-time financial aid to stave off possible eviction if they fall behind in their rent.

Social Services Minister Sandra Pupatello and Municipal Affairs Minister John Gerretsen will announce the new funding at the Woodgreen Community Centre. New hydro rates kicking in April 1 take the price from a flat 4.3 cents per kilowatt hour to a higher price based on usage.

The new rate will be 4.7 cents for the first 750 kilowatt hours used per month, and 5.5 cents for each kilowatt hour used above the 750 limit as the cash-strapped Liberals move to have consumers pay more of the true cost of power generation.

The Liberals say Ontario can't afford to keep subsidizing electricity prices at a rate that was costing taxpayers about $800 million a year. The April 1 increase will be the first time hydro prices have risen in Ontario since the previous Conservative government capped them at an artificially low rate in November, 2002 after it was forced to abandon a privatization plan that had sent rates skyrocketing.

When the province announced last year that the cap on electricity rates would be raised, they promised to put in place a plan for Ontarians on low or fixed incomes to help them cope with higher bills.

Pupatello told reporters last week she realizes that even a small hike in the electricity bill could place poorer Ontarians at risk of falling behind on their bills.

"We certainly hope that the increases won't be much, but when we talk about low-income people, a very minimal increase in a bill can have a big impact. It can just be the last straw and we have to recognize that," Pupatello said.

The overall increase in price is expected to be between 5 to 6 per cent of current bills.

A 14 per cent hike in natural gas prices is also supposed to take affect in the coming months.

Energy Minister Dwight Duncan said the impact of the hydro hike on consumers should be minimal, and that basic conservation measures should work for most people to offset the higher prices.

But many poorer people live in poorly insulated rental apartments and rely on electric heat.

Because of a lack of credit history, many poor people are not offered an equal billing program that spreads the cost of hydro over the course of an entire year, leaving them with very high bills in the winter months.

The $2-million fund, to be administered by municipalities, will offer one-time help to pay for arrears, security deposits or reconnection fees if a customer is cut off for non-payment.

On the rent plan, Gerretsen is expected to announce that $10 million in rent grants will be given to municipalities for an emergency fund for poorer people facing eviction because of unforeseen circumstances.

The Provincial Rent Bank, which mirrors existing programs in many cities across Ontario, is aimed at staving off homelessness by stepping in with one-time loans or grants.

The province currently provides $1 million a year to municipalities to help with locally run rent bank programs.

Those municipalities that do not already have rent banks will be asked to set them up.

Rent banks will offer tenants up to two months rent, once every two years, if they qualify for the program.

Existing rent programs typically spend about $1,500 for each tenant they assist.

For both the hydro and the rent assistance programs, the money will go directly to the utility company or to the landlord to ensure that the full payment is made.

With files from Canadian Press

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