Grow Up Canada!

So with energy prices super high, many Canadians are going to be feeling the pinch of high heating bills this winter. What are provincial governments (and possibly the federal government) doing though? They are going to dish out millions of dollars in subsidies to help shield hapless Canadians from reality. Here's reality: high energy prices are here to stay. What will happen next year? And the year after that? Are subsidies going to be permanent? I'm not saying that the government should do nothing. I don't think that people who now cannot pay for their energy should be forced to freeze to death. Fortunately, so far, the subsidies that have been adopted have been reserved for people with low incomes. Some people are hurting more than others though because the cost of living is higher in many cities. Irregardless, conservation should not be forced on the wealthy only. Everybody benefits people take steps to increase energy efficiency. The poor may well be the most inefficient users of energy given that they may have cheaper, less efficient appliances and housing. If there's a role for the government in all this, it is in promoting more efficient energy usage. Some are already doing this.

There is an even better, longer term solution though: Deregulate energy markets. In some provinces, consumers can sign fixed rate contracts for electricity and natural gas. Smart consumers wary of the risk of balooning energy prices fixed theirs earlier. By fixing their tariffs, consumers can protect themselves from volatile spot prices for up to 5 years (depending on who is providing the contract). Provinces that have not deregulated their markets usually don't have fixed rate contract available.

The moral of the story is this: consumers woudln't need the government to intervene if the government would only permit them to protect themselves. High energy prices naturally encourage consumers to reduce their consumption anyways. Deregulation would also encourage more private involvement and investment in the energy industry. So, it's time to grow up Canada. High energy prices are here to stay. The old ways of dealing with them (subsidies) just aren't going to work.

R