The Electricity Act, 1998 imposes a charge, known as the Debt Retirement Charge (DRC) which is payable on electricity consumed in Ontario.
The Debt Retirement Charge is helping pay down the debt of the former Ontario Hydro. Although the debt was acquired in the past, the electricity generation and transmission infrastructure financed by the debt continue to be used by all Ontario's electricity consumers. For this reason, today's customers contribute to paying down the debt through the Debt Retirement Charge.
All revenue from the Debt Retirement Charge goes to the Ontario Electricity Financial Corporation, which is responsible for managing and retiring the liabilities of the former Ontario Hydro. About one-third of the debt is being retired through the Debt Retirement Charge. The other two-thirds are being retired through payments in lieu of taxes and dividends from Ontario Hydro's successor companies – Ontario Power Generation, Hydro One and municipal electric utilities.
By law, the Debt Retirement Charge will end when the Ontario Electricity Financial Corporation's assets and the estimated value of its other dedicated revenues from the electricity sector are sufficient to service and retire the remaining amount of debt and other liabilities. The Ontario Electricity Financial Corporation estimates that the Debt Retirement Charge will likely end between 2015 and 2018.
You can find information on the status of the Debt Retirement Charge in the Ontario Electricity Financial Corporation's annual report.
All distributors and retailers required to be licensed by the Ontario Energy Board (OEB) are required to register as DRC collectors.
You may also be required to register if you:
DRC collectors starting business after May 1, 2002 are required to register with the DRC program before selling or supplying electricity.
Self-generating users who will self-assess DRC are also required to register. This includes generators who generate electricity primarily for sale to another user and also consume self-generated electricity.
Further information is available in Guide 101 - General Information and in the Registration Package for the DRC Program [PDF - 100 KB].
Distributors, retailers and self-generating users are required to file their return on or before the 18th of the month following the end of a filing period. If the due date falls on a weekend or holiday, the return is due the next working day. Filing periods could be monthly, quarterly, semi-annually or annually. How often you file is based on the amount of DRC remitted.
Returns and payments may be made at any ServiceOntario Centre or Ministry of Finance Tax Office. The tax offices accept returns and payments in the drop boxes provided. Read more