As big bangs go, it’s big.

And it goes like this: Get a bigger bang for the buck by borrowing money from future ratepayers — lowering the price for today’s voters.

The latest Liberal plan to blow up Ontario’s electricity system will slash hydro bills by roughly 25 per cent, year over year. But it’s not the first time politicians have tried to retain the reins of power by reining in the price of power.

With the 2003 election looming, then-Tory premier Ernie Eves froze hydro rates in a panic — piling on billions of dollars in debt. It didn’t work out so well.

Eves paid a price on the campaign trail, going down to defeat. And ratepayers spent the next decade paying down the accumulated debt from his gambits (including a failed Progressive Conservative attempt to privatize electrical utilities), courtesy of the inherited and much-hated debt retirement charge on their bills.

All these years later, Kathleen Wynne faced a similar power crisis — electrical and political — but chose a bolder strategy:

On the eve of the 2018 election, with hydro prices boiling over, she went all in — not just freezing prices but cutting them back. Her Liberals are promising even bigger savings for ratepayers in remote areas, on reserves, or in financial need.

But like her predecessors, Wynne isn’t cutting the cost of hydro much. She is mostly fiddling with the price.

That’s not semantics but economics. The Liberal plan essentially refinances and rebalances fixed costs that remain unchanged within the system.

First, the refinancing: It’s akin to extending the amortization period on your home mortgage from 20 to 30 years, easing the burden of high monthly payments today on the premise that you will still be enjoying that asset decades later. The trade-off, of course, is that you pay more in financing costs, adding $25 billion in additional interest payments spread over 30 years.

You get what you pay for — short term relief. And you pay for what you get — via long term debt.

Second, the rebalancing: It’s about expanded financial relief — for the poor, rural residents, and people living on reserves — transferred from the electricity system to the provincial treasury, on the grounds that social programs are more properly paid through a progressive tax system.

We won’t know if it all adds up until voters pass judgment on the plan in the months ahead. But given the rising hostility over hydro rates, the Liberals knew they couldn’t afford to wait any longer.

History, however, suggests hydro therapy rarely calms voters.

Former premier Dalton McGuinty brought in a 10 per cent “Clean Energy Benefit” ahead of the 2011 election to trump opposition demands for an HST holiday. Yet subsequent polling showed most voters were oblivious to the giveaway, giving the government no credit for the cut — which is why Wynne ultimately phased out the $1 billion-a-year program.

But under renewed pressure, the premier revived that benefit in January, this time dressed up as straight 8 per cent rebate on the provincial portion of the HST. Yet once again voters seemed unmoved by a fleeting tax break, forcing Wynne to go back to the drawing board this week to come up with a further 17 per cent reduction on hydro rates.

Taken together, the financial engineering pushes her over the psychological hurdle of a 25 per cent cut — not quite a Boxing Day or Black Friday discount, but it won’t go unnoticed. How will the government pay for it?

The remortgaging — essentially a second mortgage — will be hived off to Ontario Power Generation, the government-owned business enterprise that is one of the successor organizations to the old Ontario Hydro. For better or for worse, OPG boasts decades of debt experience. Conveniently, the borrowings won’t show up in the government’s annual budget, which is no small thing given the provincial debt now exceeds $300 billion.

Another chunk of the rate relief will be absorbed by the treasury. But the government still intends to meet its pre-election goal of eliminating its annual budget deficit this spring, thanks to robust revenues in a recovering economy.

Paradoxically, the government will be bolstered in its goal of a balanced budget by fresh revenues from partially selling off — cannibalizing — the transmission assets of Hydro One, another piece of the old Ontario Hydro (split up by the Tories in their own abortive privatization plan). Wynne went further than the Tories ever dared with her Hydro One sell-off, and is paying a political price — but also cashing in on the financial windfall when she needs it most.

Despite the dubious economics, will the latest rate relief prove to be smart politics? We live in a world — and a province — of increasingly transactional pocketbook politics.

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The government isn’t counting on the public to bow down in gratitude, or banking on the latest discount to serve as a magic channel changer. But if it dials down the volume or cuts down the static, the plan may at least give them the space to talk about something beyond Ontario’s perennial plague of high hydro rates.

And it will throw into sharp relief what really ails the party, amid the wave of public hostility over hydro that has driven down its support: Are people angry at Wynne because of high rates, or are they apoplectic about electricity costs because it serves as a convenient proxy for their antipathy to the premier?

Martin Regg Cohn’s political column appears Tuesday, Thursday and Saturday. mcohn@thestar.ca , Twitter: @reggcohn

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