Opportunity Cost - Subsidize Electricity or Fix Our Schools

Everything is relative. Even if Ontario were in surplus it is always valuable to judge a government on what it is willing to spend money on vs. what it is not. In the last week two stories have popped up.

First, McGuinty has decided to reject Drummond's recommendation that the $1.1 billion/yr subsidy on electricity enjoyed by all Ontarians, filthy rich and destitute alike, be cancelled. I say "enjoyed" because it's an apt description. We are enjoying cheaper power paid for by more debt, an obligation we are punting forward onto another generation. Don't look to the NDP or PC for critique on this given they agree energy subsidies should be expanded to home heating fuels as well.

Second, Broadview public school is in my riding not far from my home. It is old and in need of repairs. With 800 students it's a busy school. The school board prioritized it for repairs but the $4 million needed wasn't funded by the province. That story can be applied across the province as school boards struggle with insufficient capital funding to build new schools to accomodate growth and maintain older schools in established neighbourhoods.

Given a multitude of funding priorities what's a government to do? Does it:

• Continue to spend over $1.1 billion/yr subsidizing all residential electricity in Ontario, or scrap that rebate and spend much less on income tax rebates so that only lower income households are helped.
   
• Continue to let older inner-city school infrastructure decay due to lack of funds, or scrap a $1.1 billion/yr subsidy on electricity paid for by more debt, and instead use the "deficit envelope" to fix our schools.
   
• Do both! Go hog wild on debt, keep the subsidy, and go deeper into debt to fix schools.
   
• Do neither! Continue to let schools decay but at least not go $1.1b/yr more into debt. At least we'll be out of deficit faster and hopefully before the schools are irretrievable.

Or go 50/50.

Cut the "Clean Energy Benefit" to 5% and use the $550 million/yr of deficit spending Ontario was going to take on anyway to accelerate capital investments in schools. (That's also a jobs program). Also do full building-envelope upgrades to the schools at the same time, saving school boards operating costs on energy for decades to come.

At least then the debt we're asking our kids to pay tomorrow is spent on the schools they are in today.

I'd rather do that than save myself a few dollars on electricity. I'll just raise my thermostat 0.5C this summer and save it right back on air conditioning.