November 2, 2025
Carefully buried on the Friday of Halloween, and overshadowed by the build-up for the Toronto Blue Jays World Series games over the weekend, was an announcement by the Ontario Energy Board that the electricity generation costs charged to consumers would increase by 29 per cent as of November 1st.
Sensitive to the politics of electricity rates, the issue on which Premier Doug Ford’s government won its first mandate in 2018, the rate announcement was accompanied by a near doubling of the Ontario Electricity Rebate program for consumers provided by the province. The move seems designed to hide the cost increase from consumers, by increasing the subsidization of electricity rates through general revenues, already running in excess of $6 billion/yr. These are tax revenues that otherwise could be spent on core public services, like education and health care.
The cost increase is largely attributed to increased nuclear generation costs, along with unexpectedly higher spending on energy conservation. Latter may be explained by the greater uptake of provincial programs following the expiry of federal funding for home energy efficiency renovations under the Canada Greener Homes program.
The increase in nuclear generation costs represents a much more serious problem for Ontario taxpayers and electricity ratepayers in the future. The province has embarked on a nuclear expansion and refurbishment program, with the intention of increasing the portion of nuclear generation in Ontario from fifty to seventy per cent of electricity output. Independent estimates of the costs of this program, based on past results, and recent experiences and assessments in the United States, Europe and the United Kingdom, is in the range of $400 billion.
The federal and Ontario governments’ announcement of $3 billion in additional, taxpayer-funded supports for the construction of a small reactor project at the Darlington nuclear facility represents only a small portion of the anticipated $21-26 billion costs of the overall project. Given the lack of any other investors, it remains far from clear how, other than through electricity ratepayers, the province and Ontario Power Generation propose to cover its remaining costs. The same questions apply to the other projects that are to make up Ontario’s planned nuclear expansion program.
The Darlington reactor project itself carries with it a host of problems that make it an exceptionally high-risk undertaking. The current cost projections ($21-26 billion for four 300MW capacity reactors) are approximately double those of the last new build reactor proposal in Ontario ($22-26 billion for two 1200MW capacity reactors in 2009). That project was promptly abandoned by the previous Liberal government in the face of such estimates.
The Darlington project is based on a reactor design that has never actually been built or operated before anywhere in the world. The project has never been subject to a meaningful environmental assessment, and its construction was approved on the basis of an incomplete design. Serious questions over its technical and economic viability continue. The project is intended to be the leading example of the Small Modular Reactor concept. Other utilities, governments and private investors around the world, are already walking away from the concept as too costly and risky.
More broadly, it is important to recognize that Ontario’s electricity system, and the choices made around are governed by political directives. There is no meaningful review and oversight process around the cost and economic, environmental, climate, technological and safety risks, that may flow from those directives.
Ontario is in the unique situation of having been the subject of more efforts to develop and model alternative pathways for its electricity system, and the broader decarbonization of its energy system, than any other province in Canada. But there is no process to assess whether the directions set by the provincial government represent the best options for the province in economic and environmental terms relative to the alternative pathways that have been identified.
The focus of the province’s plans is on large centralized, high-cost, high-risk, and high-impact options like new nuclear power plants, and carbon-intensive gas-fired generation – whose output and emissions have quadrupled since 2017.
In contrast, independent studies, and even work done by the province’s Independent Electricity System Operator itself, have pointed in other directions. They have emphasized energy efficiency and productivity, renewable energy resources coupled with new energy storage technologies, and distributed energy resources (e.g. networks of household and facility scale rooftop solar and energy storage assets), as offering cheaper, lower risk and more flexible and adaptive pathways to decarbonization and energy sustainability in an environment of high economic and geopolitical uncertainty. These are the directions in which other jurisdictions around the world, with the exception of Mr.Tump's United States, are accelerating.
So far, Ontario Premier Doug Ford has shown no interest in these options. His government’s Halloween surprise cost announcements should make Ontario electricity ratepayers and taxpayers very worried about what may be yet to come.