Electricity rates a disadvantage for Canadian industry: report

Canada’s giant auto parts manufacturer Magna International Inc. currently operates forty-six plants in Ontario, but it has no plans to open any new plants in Canada, according to CEO Don Walker. Even though the 10 per cent decline in the Canadian dollar relative to the US dollar has made the company more competitive, Magna is concerned about the cost of industrial electricity in Ontario. The company recently reported sales of $8.96 billion in the quarter, compared with $8.3 billion in the same quarter of last year.

coal-energy-power-generation-hydroelectricity-Ontario-Fraser-Institute-rates-industry-EDIWeekly
Fraser Institute report says coal-fired power generation should be encouraged “where competitive with other resources and technologies.”

Walker’s remarks, made after the company’s annual general meeting in Toronto, coincide with the release of a study by the Fraser Institute, Paying More for Power. The study examines rates charged to residential, commercial and industrial customers for electricity in more than one hundred Canadian and American cities. The study found that rates for Canadian customers are up to 30 per cent higher than for Americans. The impact of taxes on consumers’ electric bills is also considered, and in Canadian cities it was found to be higher, on average, than in American cities.

The study blames Canadian governments for not taking greater advantage of inexpensive natural gas-fired capacity. Ontario, which has shifted away from coal-fired generation, which is cheap but more polluting, is singled out. The provinces with the cheapest electricity rates are those with the greatest amount of hydro-electricity: Quebec, Manitoba and British Columbia.

“These higher electricity rates put Canadian businesses at a competitive disadvantage and deter future economic development,” said Kenneth Green, study co-author and Fraser Institute senior director of energy and natural resources. “This is particularly troubling for a province such as Ontario, which has a significant manufacturing sector, and Alberta, which relies on resource extraction.”

The report recommends that more hydro-electric facilities should be developed, along with more investment in natural gas generation and even in coal-fired generation.

Did you miss this?

Other Popular Stories

  • Economy grew fastest in north, west in 2012: Statistics Canada
  • Eleventh hour intervention by Marchionne secured Fiat Chrysler deal
  • Consumer spending drives strong GDP growth in second quarter
  • Within 10 years, almost 50 percent of retail jobs may disappear to automation
  • Chrysler Pacifica Hybrid, first electric minivan, rolls out in Windsor
  • The challenges of 3D printing or manufacturing in space — without gravity to help it all "stick"
  • Magna to acquire British auto body firm Stadco
  • Petronas to spend $16 billion to export Western Canadian LNG
  • Federal government urged to speak up for nuclear at Paris climate talks
  • Propellant leak during emergency abort sets back Boeing's spacecraft development for NASA
  • Keystone: will it all come down to emissions?
  • As the Tesla Model 3 enters production, oil companies revise estimates of EVs on the road upwards to 530 million by 2040
  • Breaking news: Kinder Morgan to cancel its Utica Marcellus Texas Pipeline project
  • More R&D, innovation not free trade deals needed to boost Canada's exports: economist
  • Siemens gives Western U engineering huge PLM software grant
  • Israeli aluminum-air electric car battery to be tested in Montreal
  • Bombardier's Learjet 85 completes first flight
  • Irving Shipbuilding wins $2.3 billion icebreaker contract with navy
  • Gardening in Space a Challenge for NASA
  • Recovery continues as NA car sales head for year 2000 levels
Scroll to Top