Ottawa, Ontario — Ontario has announced its plan to subsidize a portion of electricity rates for medium and large commercial and industrial businesses
According to the Ford government, the current cost of hydro for automakers and their suppliers are making the province uncompetitive with other jurisdictions.
Starting Jan. 1, 2021, Ontario’s plan could see industrial businesses save 14 percent and commercial business save 16 percent on their average bill, the government said.
General Motors Canada applauded the subsidy.
The Ontario budget released last Thursday states an automotive parts manufacturer that uses 2.43 million kilowatt-hours of electricity each year would reap about $382,000 in annual savings.
“Those savings will not only make Ontario more competitive but can be reinvested by businesses to hire more employees, expand operations and grow the economy,” the budget reads.
Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, which represents the interests of the Detroit Three in Canada, said the budget “addresses several longstanding competitiveness challenges.”
“Rising electricity costs and the tax burden have been key competitiveness challenges facing the auto industry for many years,” he said in a statement. “Reducing the costs facing auto manufacturers helps position the industry for success.”
General Motors Canada President Scott Bell says the relief will put Ontario’s automotive industry in a good position for the future.
“One of the key competitive negatives for manufacturing in Canada is the high Ontario cost of electricity … these are costs that our American factories don’t face,” he said.
The Ford government blames the former Liberal government and its Green Energy Act for the spike in rates over the years.
The 2020 budget release Thursday reads: “Since 2008, the year before the Green Energy Act was established, the total cost of Ontario’s electricity system, including for the generation and delivery of power to consumers, has increased significantly causing electricity prices in Ontario to rise as a result.”
“The price of electricity for industrial employers increased by 37 per cent from 2008 to 2019.”