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Ontario electricity costs cut 74,000 manufacturing jobs since 2008

Fraser Institute study says 1.8 jobs lost to every one gained from green energy.


October 18, 2017
by PLANT STAFF

TORONTO — Ontario’s rising electricity prices have cost the province an estimated 74,881 manufacturing jobs since the 2008 recession, finds a study by the Fraser Institute.

The policy think-tank says the province experienced the most “substantial decline” in manufacturing output and employment, compared to other provinces and US states.

The study finds from 2008 to 2015, manufacturing jobs fell from 805,170 to 688,735, and it estimates about 64% of the decline – 74,881 jobs – are attributable to the province’s higher electricity prices.

“Electricity is a major cost for the manufacturing sector, so it’s not surprising that Ontario’s skyrocketing electricity prices have led to tens of thousands of job losses in the province,” said Ross McKitrick, economics professor at the University of Guelph, a Fraser Institute senior fellow and co-author of Rising Electricity Costs and Declining Employment in Ontario’s Manufacturing Sector.

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The study says even if the province’s estimates of job creation in renewable energy are taken at face value, this implies a loss of about 1.8 manufacturing jobs for every new job created in the green energy sector, many of which are temporary positions.

It also found prices for small industrial users (one megawatt and monthly consumption of up to 400 megawatt hours) increased 48% in the Toronto area and 50% in Ottawa between 2010 and 2016 – more than three times the average rate of increase in the rest of Canada.

In 2016, those businesses in the Toronto area averaged 16.27 cents per kilowatt hour (kWh), nearly double what comparable-sized firms paid in Montreal (9.11 cents) and Vancouver (9.49 cents), and nearly three times what they paid in Calgary (6.53 cents).

Large industrial power users, many granted reductions, also paid higher rates compared to large power users in Quebec, Alberta and BC.

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