Durham Economic Prosperity Committee

CMEMade in Ontario Energy & Jobs

CME Report

Submitted by: Ian Howcroft, Vice President, Canadian Manufacturers & Exporters (CME) Ontario

Oct. 23, 2014—It’s no secret Ontario’s manufacturing sector has been impacted by the turmoil of the global economy.

Rising input costs, not the least of which is the rising cost of electricity, and the volatility of the Canadian dollar, have made competition vastly more intense. Despite the myth that manufacturing is a sector in decline, it is still one of the largest contributors to Canada’s economy.

For Ontario to create jobs and economic growth, we need to sustain and expand our manufacturing base, which is critical to communities in every region of the province.

In early October, two of Ontario’s power agencies released a joint report looking at the opportunities for cooperation with Manitoba and Quebec. This was an issue that received plenty of media attention when Canada’s Premiers met at the Council of Federation this past summer, and some special interest groups stated imports from Quebec could meet a large portion of Ontario’s energy needs.

As the report outlines, it’s not quite that simple.

There is a focused opportunity, as outlined in the report, for a strengthened strategic relationship with Quebec and Ontario using existing infrastructure to balance the system needs, as both provinces have supply shortfalls during different times of the year. The Premiers of Quebec and Ontario should be commended for advancing this opportunity, which is also a signal of greater inter-provincial cooperation on energy issues. Currently, there is a strong linkage between the two provinces where electricity is moved between both jurisdictions on an annual basis.

These targeted opportunities should be advanced, but they also need to be put in perspective so we can build on what is working in our electricity system and not lose some of the advantages we have developed, which are important to jobs and the strength of our overall economy.

Stemming from the review of Ontario’s Long-Term Energy Plan in 2013, we believe there are a wide range of opportunities to manage the cost of electricity, including reducing bureaucracy, better integrating the system by looking to further consolidation in areas like the distribution system and focusing on proven, low-cost, stable sources such as nuclear. Like any complex issue, there are no simple answers. We need a thoughtful, comprehensive approach that looks at the realities of our electricity system.

Progressing with nuclear refurbishment programs at Bruce Power and Darlington will secure our nuclear baseload for decades. With rates paid for nuclear today at 30 per cent below the average price of electricity in Ontario, nuclear refurbishment will ensure price stability for decades to come from sites with existing transmission infrastructure. The investments required to support this program will also provide a boost to our economy and create good jobs, particularly in the area of manufacturing. Based on a study we released last year, it’s estimated, this program will secure 25,000 jobs annually during the renewal period.

By taking a comprehensive look at our energy challenges, we can ensure we pursue the balance of options to meet the needs of system reliability, price stability, affordable pricing, energy security and economic spinoffs from our electricity sector.

To maintain system reliability and the stability of electricity pricing now and in the future, Ontario will continue to rely on our existing hydro assets and baseload nuclear, which, combined, will meet over 70 per cent of the province’s energy needs. These sources are the most affordable sources of electricity in Ontario today, and will continue to be for decades to come. Let’s get on with the job at hand. Our jobs depend on it.

For more information about CME, contact Ian Howcroft at policy@cme-mec.ca or visit www.cme-mec.ca.

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