Ontario’s electricity sector has been struggling with the increasing system costs, but the government’s rate subsidies that shift the costs to taxpayers are unsustainable, according to the latest report. The report (pdf), titled “Power Surge: The Causes of (and Solutions to) Ontario’s Electricity Price Rise Since 2006,” published Tuesday by the C.D. Howe Institute, found that the heart of the problem is the increased cost of supply due to high-cost energy contracts. With the province signing energy contracts when electricity consumption dropped lower than expected, the staggering cost of those contracts became the greatest problem for Ontario’s electricity system. To cover the rising system cost, Ontario governments have continually shifted the cost to taxpayers to keep total bills down. According to the report, the latest Ontario budget estimates show that the cost of rate subsidies have climbed to $6.5 billion—which translates to roughly 3.5 percent of total government expenditures. “To …