Electricity Price Decrease No Deal


Kathleen Wynne.

As predicted by this corner of The Square, Ontario premier, Kathleen Wynne, will temporarily reduce residential hydro bills without the federal government losing GST revenue. In fact, it will get more money while Ontarians, seeing lower bills in the run-up to the next provincial election, could see their jobs disappear.

Wynne is ignoring the plight of manufacturers. They will get no relief.

This could devastate the province’s auto industry and much of Windsor’s economy.

Her plan to extend the amortization on billions of borrowed money, which the province used to upgrade its electrical system, has a flaw.

The Windsor Star, on March 3, quoted Wynne as saying her scheme, and it is a scheme, will cost taxpayers over time, “… a bit more. That’s true. And it will take longer to pay off. That’s also true.”

In other words, any savings are short term.

Even now, utilities are lining up at the Ontario Energy Board looking for higher rates, including local power distributors EnWin and ELK. There is also a potential surcharge to refurbish Darlington’s nuclear station and the Board’s twice yearly increases.

There will be no let-up by those wanting higher hydro rates. Wynne will try to hold them off for a year.

That is the best she can do, because she refuses to address the source of the problem. These are costly solar and wind contracts, up to ten times the current selling price of hydro.

Expensive green energy is not going away, but much of the province’s industry could. Cost-conscious manufacturers could shutter their operations.

Mark Natais, the president of the Canadian Vehicle Manufacturers Association, says the Wynne plan will do, “… nothing to address a climate of investment uncertainty related to what has been our number one request to the Province of Ontario; the urgent need to address out of control Class A industrial electricity rates.”

These rates are now as much as two to three times higher in Ontario than in competing auto jurisdictions. The manufacturers are also concerned about the, “… Wynne government’s carbon pricing and cap and trade taxes.”

These added expenses are looming in the background, making the industry, “… uncompetitive with other jurisdictions vying for automotive investment.”

Wynne’s unconscionable actions are politically motivated. She knows the auto industry won’t leave immediately thus giving her a few years before workers are sent home. Enough time to win the next election.

If it all works.

It is a risk. Voters might see right through her flawed plan. Already, reported the Toronto Star, on March 3, there are whispers about Liberals sharpening their proverbial knifes to cut Wynne loose if her plan fails.

One person the paper listed as a potential successor is Windsor’s Sandra Pupatello.

Most likely over the next three or four months the Liberal Party will decide what to do to. If Wynne is out, the new leader will need enough time to bond with the electorate, something Wynne, judging by her approval rating, refuses to do.

About the Author

Robert Tuomi
After initially succeeding as a broadcast journalist and achieving senior level assignments, Robert branched out into marketing communications. As a senior executive, primarily in the high-tech industry, Robert created award-winning and comprehensive, multi-faceted initiatives to enhance sales and expand market awareness for some of the largest companies in their fields. Email Robert Tuomi