Who really pays your hydro bill? Ontario's electricity subsidies
Taxpayers now cover 23.5% of household electricity bills. A look at the programs, what they cost and why they grew.
Part of every Ontario household's electricity bill is paid by the province, and so by taxpayers. The subsidies keep monthly bills lower, but they don't lower the actual cost of running the power system.
The Ontario Electricity Rebate today
On November 1, 2025, the Ontario Electricity Rebate rose to 23.5% of the pre-tax bill for households, small businesses and farms. For a typical home using 700 kWh a month, it lowers the bill by about $36 a month. The increase was set at the same time as higher regulated prices.12
How much it costs
- Ontario's Financial Accountability Office estimated the province's nine energy and electricity subsidy programs would cost $118.1 billion over 20 years, and $6.9 billion in 2022-23 alone.3
- The 2026 Ontario Budget shows about $5.0 billion for energy programs in 2025-26.2
How we got here
- 2017: the Fair Hydro Plan cut rates by 25% through subsidies kept off the province's books, an approach the Auditor General criticized.4
- 2019: the Fair Hydro Plan was replaced by the Ontario Electricity Rebate.3
- January 2020: projected subsidies jumped to $5.6 billion a year, $1.6 billion more than the $4 billion expected just months earlier.4
- November 2020: the rebate rose from 31.8% to 33.2% as prices increased.5
- November 2025: the rebate rose again to 23.5% alongside new, higher prices.1
Why it matters
Subsidies hide the real cost of electricity from the people using it, and they compete with other spending as demand for power grows. The only way to lower the underlying cost is to need less power at the busiest times and to make more of it cleanly and locally.
What it means at home: an efficient home with a heat pump, good insulation and solar uses less of the most expensive power, whatever happens to rates and rebates.
Sources
Figures are as reported by the sources listed, at the dates shown. Older figures are included for historical context. Canadian Energy Standard is an independent company, not affiliated with any government, utility, generator or energy retailer named here.
- Ontario Energy Board, changes to electricity prices for households, small businesses and farms (November 1, 2025)
- Government of Ontario, 2026 Ontario Budget, Chapter 1B
- Financial Accountability Office of Ontario, Ontario's Energy and Electricity Subsidy Programs
- Toronto Star, Ontario's electricity subsidies surge by $1.6 billion (January 30, 2020)
- Ontario Energy Board, new electricity prices for households and small businesses (October 13, 2020)
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