Is the subsidy just to lower cost of living for the lowest incomes?

Would be very curious about the rationale for it if not. Why would you subsidize increased energy use

It applies to most private residential and small-scale business electric use. Rationale would be getting quite political, as you might imagine. But I suppose there are several justifications that are given.

One is to offset the cost to the consumer for phasing out fossil fuels. Coal has been shut down and wind and storage and new nuclear is being built. Politically it has been presented as a matter of fairness; poor people are least able to pay for increases or to retrofit. A kind of wealth redistribution. (Though when you remember large corporately-run farms are included in the subsidy it's maybe not the most progressive form of redistribution.)

In Quebec where they have a great surplus of hydroelectric they also partly subsidize residential electricity with the profits of the surplus sale to the United States. The energy is so cheap there than resistive heating is cheaper than natural gas for home heating. Avoiding dependence on oil and gas imported from either the US or western Canada, or rather trying to lessen that dependence, is a standing issue for both Quebec and Ontario.

The argument against deregulation of energy prices is that poor people won't be able to afford it. But if you create a program that subsidizes some reasonable amount of energy per person per month the price of electricity can go as high as it needs to. I don't know if that was rationale in Canada but it's one possible rationale why government might want to aubsiduze energy usage.