Electricity Rates in Ontario – A Great Divide between North and South

Thunder Bay AirportTHUNDER BAY – News that electricity rates are set to go up another 45% in Ontario over the next five years as a result of the McGuinty Governments moves to have a “cleaner and greener Ontario” should be sending shivers across our economy here in Northwestern Ontario.

That message resonated far less than it might have with some in the Ontario Government saluting a move to put in place a hydro rate reduction place.

The ever increased costs of electricity in Ontario are going to prove the largest economic impediment to our future prosperity.

Some have discussed how Northwestern Ontario could benefit from secondary or tertiary processing of resources as mining becomes a new economic driver. Ontario’s power rates are already high enough that we are losing business.

The rates in both Manitoba and Quebec are lower. It is quite likely that Northwestern Ontario will see chromite dug out of the ground in our region and shipped to other places for processing. It is a potential lost economic boon to our region.

The reality too is that industry moving to co-generation is taking those companies further outside of the system leaving fewer rate-payers to pick up the costs of Premier McGuinty’s ever greener Ontario.

Finance Minister Duncan is attempting to spin the blame out over all of Ontario’s past governments. “For a long time, governments of all political stripes have neglected the electricity sector, and that’s why we have made the necessary investments to build a cleaner system and to ensure the lights go on and stay on. Ontarians are asking for some assistance with rising costs, especially their electricity costs, and every little bit helps during these lean times,” according to Duncan.

Northern Ontarians likely also remember when Dwight Duncan’s advice was simply to grab a bottle of red wine, a blanket and a good friend and thereby stay warm for the winter.

Minister of Northern Development, Mines and Forestry Michael Gravelle states, “I am very pleased that our Government has listened to the people of Ontario and responded with a 10 per cent decrease in electricity on their bills. This along with other significant measures will help Ontarians as we come out of these challenging economic times.”

The help from the McGuinty Government is a benefit for families in the North. However it is another short-term plan.

The problem for the McGuinty Government is simple. Increasingly people are starting to question the wisdom of investing billions of dollars in very expensive, and increasingly less reliable systems of power generation.

“Dalton McGuinty’s crass attempt to kill two birds with one stone by cutting Hydro bills by 10% and calling it the ‘Ontario Clean Energy Benefit’ makes it clear that his Liberal government is following the leaked Sussex Strategy document plan to ‘confuse’ the issue of cost of renewable energy projects in Ontario,” according to John Laforet, President of Wind Concerns Ontario.

The real issue here is that there is a “great divide” between the North and the South in Ontario.

Northwestern Ontario has seen our power generation capacity greatly exceed the demand. The downturn in the forestry sector has seen mill closures, and shutdowns. That has lead to excess capacity.

Likely what should happen in the North, is for that surplus capacity to be priced competitively to Manitoba, and become part of a business enhancement program to boost and diversify the Northwestern Ontario economy.

That is the kind of a goal that would have long-term benefits to both Northwestern Ontario and to Southern Ontario too.

It is a plan that so far none of the politicians are willing to touch.

Wonder why?

James Murray