Ontario electricity rates higher than in other jurisdictions

London Economics International (LEI) has released a report highlighting the need to reduce industrial electricity prices in Ontario to preserve the manufacturing sector’s competitiveness. Commissioned by Canadian Manufacturers & Exporters (CME), but completed independently, the report found that when compared to jurisdictions with similar manufacturing industries, Ontario’s electricity prices can be up to 75 per cent more expensive.

“The report found that when compared to four U.S. states that produce competing goods, Ontario’s electricity prices are much higher,” said Dennis Darby, president/CEO of CME. “This puts Ontario manufacturers at a significant competitive disadvantage and discourages investments. The disparity was particularly prevalent for Class B electricity consumers, small and medium-sized manufacturers, who have seen an 86 per cent increase in prices from 2007 to 2018. Class A consumers, usually big industrials in heavy-usage sectors like steel and auto, fare a little bit better; however, the prices still miss the mark.”

Manufacturing is vital to Ontario’s economy and to the prosperity of all Ontarians. The numbers speak for themselves: The sector directly accounts for more than 12 per cent of provincial GDP, generates more than $300 billion in annual output, and accounts for more than 80 per cent of Ontario’s exports.

“Manufacturers in Ontario identify high electricity costs as a key impediment to their competitiveness,” said Darby. “We encourage the government to consider the data put forward by LEI and take steps to focus on creating more manufacturing jobs, growing the sector, and scaling up businesses by lowering electricity prices.”