Ontario's Bill 124 Wage Fallout Drives Hydro Rate Hike
The electricity system is seeking a 40 per cent rate increase this year largely to recover retroactive wages owed after the repealed wage-restraint law.
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Ontario's repealed wage-restraint law, Bill 124, continues to ripple through the public sector, with the electricity system now forced to recover the financial damage.
The Independent Electricity System Operator is seeking a $329 million recovery from ratepayers this year—a 40 per cent jump from last year. The IESO estimates this will work out to about 48 cents on an average monthly residential bill. The Crown corporation says the large increase is mostly a one-time correction and won't be repeated in coming years, when it projects increases of nine per cent and two per cent.
After Bill 124 was repealed in 2024, the IESO paid out roughly $45 million in retroactive raises and benefits owed to its workers. The organization funded it through reserves and debt because it couldn't ask for rate approval mid-cycle. Energy Minister Stephen Lecce has signed off on the plan; the Ontario Energy Board must also approve it.
Premier Doug Ford's 2019 legislation capped public sector salary increases to one per cent annually for three years. The government lost a constitutional challenge and repealed the law in 2024. Once repealed, workers sought retroactive compensation. The financial Ontario Accountability Officer estimated in 2022 the law would save $9.7 billion—but by 2024 projected the province would spend $13.7 billion on retroactive increases. The province also spent $4.3 million in legal fees.