Ontario Must Act To Mitigate Rising Electricity Costs: Chamber Report
TIMMINS, July 8, 2015—The impact of rising electricity costs on Ontario’s business community must be addressed by the provincial government, according to a new report from the Timmins Chamber of Commerce, in partnership with the Ontario Chamber of Commerce (OCC) and 40 chambers of commerce and boards of trade.
With five recommendations that government and energy agencies should pursue to curb rising costs and keep businesses in the province, Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market is the result of the most extensive consultations ever undertaken by the province-wide network. To produce the report, the OCC conducted a year-long research and consultative process with over 100 businesses, energy experts, and government agencies.
The report is a timely one, according to a new public opinion research from Leger, which cautions that soaring electricity prices have reached a crisis point for Ontario businesses and consumers. The research finds that 81 percent of Ontarians are concerned that rising electricity prices will impact the health of the Ontario economy and the same percentage fear that rising electricity prices will impact their disposable income.
These numbers rise to 91 percent in northern Ontario, where concern over the negative impact of rising electricity prices on the economy is the highest in the province. Northern Ontarians are also the most concerned about the impact on their disposable income, with 90.8% believing the price of power will be felt in their pocketbook.
“Our business members continue to identify the price of electricity as one of their greatest challenges, regardless of their size or sector,” said Christine Bender, Chair of the Timmins Chamber of Commerce’s Policy Committee.
“We would urge the government to consider the recommendations in this report to mitigate the cost of doing business in Ontario. Such measures would make the province more competitive while helping to improve business confidence and protecting jobs.”
Industrial electricity rates have increased by 16 percent since 2013, and will increase by a further 13 percent over the next five years. Northern industries are particularly sensitive to these cost challenges, given the additional energy costs associated with the regional climate and distance to markets, said Bender.
This has been particularly evident in Timmins, as rising energy rates were a factor in the relocation of Glencore’s Kidd Metallurgical Site to its Quebec facilities in 2010.
“We certainly applaud the Ontario government’s recognition of the unique conditions faced by businesses in our region, as it demonstrated when it made the $120-million Northern Industrial Electricity Program permanent earlier this year,” said Bender. “It was a welcome move to help the North’s large industrial firms by helping them to reduce electricity costs. However, more needs to be done to protect Ontario’s competitiveness, and this report stands as a good starting point.”
Among the report’s five recommendations is a push to improve the transparency of electricity pricing as well as factors contributing to increased system costs. By publishing average electricity rates and disclosing the costs of important investments, government will be held accountable for future decision-making. Currently, less than half of Ontarians understand the drivers that contribute to rising electricity bills.
The report also urges the government to consider moving away from a central procurement model, and look at a more competitive capacity market structure.
The report also identifies options that the government should not take or that have low potential for containing costs, such as importing hydroelectric power from Quebec to replace nuclear generation and cancelling feed-in tariff (FIT) contracts. Though common suggestions, the costs associated with such moves would render either approach unfeasible. An analysis of all the options considered can be found at www.occ.ca, or the extended version of the report.
“The Ontario Chamber Network of 60,000 businesses consistently hears that the price of electricity is undermining their members’ capacity to grow, hire new workers, and attract investment,” said Allan O’Dette, President and CEO of the Ontario Chamber of Commerce. “The Government of Ontario has before them a number of decisions that must be made in order to bend the trajectory of soaring electricity costs.”
About the Timmins Chamber of Commerce
With 750 members, the Timmins Chamber of Commerce is one of the largest accredited chambers of commerce with distinction in northeastern Ontario. As the “Voice of Business in Timmins” since 1949, our advocacy and policy initiatives focus on ensuring a positive business climate in the City of Timmins.
Manager of Policy, Research and Communications
Timmins Chamber of Commerce