Electricity prices in Ontario aren’t as high as they’re made out to be, according to local business owners and policy experts.
Recent criticisms of hydro rates in Ontario have resurrected the ongoing debate about the effects of provincial energy policies.
At Ottawa City Hall on March 4, Progressive Conservative Leader Patrick Brown told attendees at the Mayor’s Breakfast Series that businesses would be driven out of Ontario because of high energy prices.
His statement is supported by Plamen Petkov, vice-president of the Ontario Board of the Canadian Federation of Independent Business.
“Increases in electricity rates over the last few years are a huge concern to middle and small businesses in the province,” Petkov says.
He says some businesses have indicated they are tempted to leave the province because of the increased cost. Petkov argues that other provinces are much more competitive.
“They talk about moving to the States, or moving to Quebec or anywhere else in the country.”However, energy experts disagree.
“The entire thing is rubbish, made up for political purposes,” says James Meadowcroft, a Carleton University professor who holds the Canada Research Chair in governance for sustainable development. “Ontario prices are not particularly high in relation to other North American jurisdictions,” says Meadowcroft.
His colleague at the university, Alexandra Mallett, has questioned any claim that connects energy policy in Ontario to businesses choosing to operate elsewhere.
I’d be curious to know what evidence there is that these high electricity prices have been driving businesses out of Ontario,” says Mallett.
She wonders if businesses looking to relocate are surveyed in order to properly understand the motivations of firms that are threatening to leave Ontario. A survey like this, she says, would need to be broken down by sector, such as automobile manufacturing or software. Mallett points to comments made by high profile investors and business analysts, including Warren Buffet and Sandra Pupatello, who say that businesses are motivated by many things when looking to keep production costs down.
While energy levels are important, they say it’s often other factors, including wages, unions and tax incentives that lure production to other provinces or countries.
Mallett also raises the issues of attribution, meaning it’s difficult to say with certainty that a policy will lead to a particular outcome.
“Sometimes correlation can get equated to causality on either side of the debate,” says Mallett.
Centretown-based owner of Aziz & Company, Sheena Zain, doesn’t consider hydro prices to be a major contributor to her business costs.
“I can’t say that I have seen my hydro bills go up,” says Zain. “I sit on the board of directors for the Bank Street BIA. Nobody there is talking about their hydro bills exploding so badly they are actually giving up.”
Zain explains that her electricity costs have actually come down as a result of a province-wide retrofit initiative by Hydro One to replace her older, less efficient lights.
“I know for a fact that my hydro bills have dropped about $60 a month,” says Zain.
She explains that all the work was done without prompting and was free, although she says the costs for the initiative does get passed on to the taxpayer.
Zain says it’s a good example of effective energy policy. She says that the provincial government’s retrofitting program cost about $100 million, whereas building new power plants would have cost closer to $1 billion.
Ultimately, Zain says she has no problem spending a little extra on her bills if it helps the move to energy efficiency.
“What am I going to do, make the environment pay? That’s ridiculous,” she says.