Hydro costs bad for business: Newmarket, Aurora chambers of commerce

Yorkregion.com
July 15, 2015
By Chris Simon and Teresa Latchford

Local businesses will close without relief from rising energy costs, insists the head of the Newmarket Chamber of Commerce.

Debra Scott, president and CEO of the chamber, says the province and energy providers must deal with the effects of rising electricity costs on the business community.

Her statement comes after the release of a report by the Ontario Chamber of Commerce and 40 chambers and boards of trade, which includes five recommendations aimed at mitigating future hikes.

“The cost of electricity in Ontario is rising,” she said. “And that trend is set to continue over the next two decades, adding to the cost of doing business in the province. If something is not done now to mitigate these increases, businesses will leave the province, jobs will be lost, and our economy will suffer.”

The report is accompanied by public opinion research from Leger, which mentions soaring electricity prices have reached a crisis point for Ontario businesses and consumers. Research finds 81 per cent of Ontarians are concerned rising electricity prices will impact the health of the provincial economy and fear rising electricity prices will impact disposable income.

“The trend toward rising electricity prices is expected to continue,” Aurora Chamber of Commerce CEO Judy Marshall said. “Just as the manufacturing sector is beginning to make some positive gains, the future looks bleak without reliable and cost competitive energy. The government must make knowledgable decisions that will have a long-term impact on the increasing price of electricity.”

Among the report’s recommendations, the government should keep the Debt Retirement Charge on residential bills until it has been retired, spreading the burden of past government decisions across ratepayers, Scott said.

But that would be asking families to shoulder too much of the burden, Newmarket-Aurora MPP Chris Ballard said.

“(Rates) will be going up because we have to pay for the clean, reliable infrastructure we’ve invested billions of dollars in,” he said. “Ontario did not invest in its electrical infrastructure for many years; not much was done over the years before (the Liberals) came to power. It became more apparent to the government that was causing serious concerns with outages, brownouts and the possibility of system collapse.”

The charge was initially placed on consumer hydro bills in an effort to pay for necessary electricity generation and transmission infrastructure. However, it will be removed from residential electricity bills after Dec. 31.

Businesses can reduce costs in a number of ways, including installing LED lighting or using electric motors in equipment, Ballard said.

Energy prices are better in Ontario than most American states.

And there’s little indication businesses are seriously contemplating pulling out of Ontario and moving to other jurisdictions, he said.

“All across North America, energy rates are going up because all governments realize we have to invest in electrical infrastructure,” Ballard said, noting the province has created more than 500,000 jobs since the 2008 recession.

“Anything that hits our pocketbook, we don’t like to see increase. But this is something everyone in Ontario had to buy into.”

The chamber also calls for the government to improve the transparency around electricity pricing and system cost drivers. Publishing average electricity rates and disclosing the costs of important investments will make the government more accountable, Scott said.

Most Ontarians don’t fully understand the drivers that contribute to rising electricity bills, she said.

The report also notes the government should not import hydroelectric power from Québec to replace nuclear generation and cancelling feed-in tariff (FIT) contracts.

Ballard said the province is on the right energy path.

“While coal is the cheapest, it’s very expensive to burn, in terms of the health and environmental costs,” he said.

“It’s the cost to Ontarians, with regards to respiratory illnesses and deaths. We’re saving in human suffering.”