Hydro rates killing jobs – by Wayne Snider, The Daily Press (February 28, 2011)

Wayne Snider is the city editor for The Daily Press, the city of Timmins newspaper. Contact the writer at news@thedailypress.ca.

“An independent Northern Ontario electricity authority would allow us to create
jobs in Northern Ontario, contribute to the economy of the North and at the end
of the day, it would be good for all of Ontario.” (Former NDP leader Howard Hampton)

OPINION: Northern municipal leaders seek provincial solution to industrial sized problem

Northern Ontario municipal representatives will deliver their wish list to the leaders of the three mainstream political parties this week during the Ontario Good Roads Convention.

It would be shocking if hydro rates were not on that list, given the fact that rising costs of the utility have played a major role in gutting industry across the North.

Hydro costs were one of the key contributors leading Xstrata Copper to close its smelting operations at the Kidd Creek Metallurgical Site. Instead, ore concentrate is now shipped to Quebec, where electricity is much cheaper. (With the move, the province also lost one of its largest customers in terms of power sales.)

Saw and paper mills have also been hit hard by soaring hydro costs. In Iroquois Falls, there is an atmosphere of dread created by the pending sale of AbitibiBowater’s hydro electric dams. The fear being that once the cheap source of power dries up, the company will walk away from the community.

One of the major players in the Ring of Fire project, Cliffs Natural Resources Inc., has publicly stated that hydro costs in Ontario are too prohibitive to make processing of the ore in-province attractive.

“We’ve identified a few places in Northern Ontario where (a production facility) would be theoretically viable, but at the current provincial power rates, there isn’t a place where it’s feasible,” said Bill Boor, president of ferroalloys for Cliffs.

Timmins is one of the locations on the “theoretically viable” list.

This is the biggest mineral discovery of the past century. It is probably about five years away from real production. But yet, the players are already saying Ontario has priced itself out of the industry — which means either another province or foreign nation will reap the benefits of value-added jobs from a Northern resource.

And this is even with initiatives like the Northern Industrial Electricity Rage Program in place. Under the the program, large industrial facilities, those using more than 50,000 megawatt hours of electricity annually, get a rebate. This, however, is only a temporary measure. The resource sector needs long-term, affordable hydro in the North.

“Specialty electricity rates — which often naturally occur in the hydraulic power generation zones of Northern Ontario — would provide real incentives for further investment, as they do in New York State,” said Brian Nicks, director of forestry for EACOM Timber Corporation, during an address to the province’s Standing Committee on Finance and Economic Affairs.

So what can we expect in terms of promises when it comes to hydro prices in the North?

Progressive Conservative Leader Tim Hudak also vowed to “pare down” the number of public bureaucrats in the energy sector, such as the Ontario Power Authority “which began as a transitional agency with 15 employees” and has ballooned to 300 people, many of whom are earning more than $100,000 per year.

“Energy prices are one of the chief drivers in any kind of business and sadly it’s going to mean the difference for some businesses between keeping the doors open or shutting off the lights and laying off employees and shutting the doors for good if we stay on the path that we’re on.”

Former NDP leader Howard Hampton is pushing an independent power utility for Northern Ontario.

“I appreciate that Toronto has its own energy challenges, but they should handle their own energy challenges and let Northern Ontario handle our own energy challenges,” he said. “We generate some of the cleanest and greenest electricity on the planet from falling water and we get some of the lowest costs on the planet.

“An independent Northern Ontario electricity authority would allow us to create jobs in Northern Ontario, contribute to the economy of the North and at the end of the day, it would be good for all of Ontario.”

For the rest of this column, please go to the Timmins Daily Press website: http://www.timminspress.com/ArticleDisplay.aspx?e=2998670