THUNDER BAY – Editorial – The move in Ontario to be a leader in “green energy” is likely in the short to mid-term continue to drag down Ontario’s economy. In the long term, it is honestly hard to say what impact the Green Energy Act of 2009 will have on Ontario. The cost of subsidies for solar and wind energy have companies seeking out places where they can make the most money, and that means for consumers and taxpayers, higher costs. Progressive Conservative leader Tim Hudak states that the Liberal’s green energy programs according to the Auditor General cost families $4.4 billion more than it should have”.
Speaking in the Ontario Legislature, Premier Dalton McGuinty stated, “Our clean energy plan is more than just an economic plan; it’s a statement of our values. Through that plan, we are saying we value clean air, we value the health and well-being of our families, we value the tens of thousands of jobs that that plan is creating and we value the fact that together we’re laying a foundation for future prosperity for our children and grandchildren so they can work in the renewable energy sector”.
The McGuinty plan is not an economic decision, but rather a “statement of values”. That means that the Ontario Liberals have put in place a new direction, not only for the short-term, or the mid-term but are representing a fundamental change for Ontario’s economy. Where Ontario has been the engine of Canada’s economy leading in the production of manufactured goods, our province is in the midst of a shift to leading in the production of green energy.
That may sound futuristic and positive, but based on the results elsewhere, being a leader in the green energy field isn’t a sound economic plan.
The Premier was not in the Ontario Legislature the day after the Auditor General brought down his scathing report that hammered the cost of this “statement of values” decision on Ontario’s economy. Instead the Premier was out boosting another of his green energy schemes. The Minister of Energy, speaking in the Legislature said, “The Premier is in Windsor–Essex today at the CS Wind plant: 400 indirect jobs, 300 direct jobs. Those are futures for families. You know, those jobs feed families, they feed communities and they support the economy of the province of Ontario”.
Perhaps lost on the McGuinty government is the mounting evidence, pointed out to them by the Auditor General that each “green energy” job actually impacts the economy by costing far more jobs than are created. The Auditor General stated, “Recent public announcements stated that the Green Energy and Green Economy Act, 2009 was expected to support over 50,000 jobs, about 40,000 of which would be related to renewable energy. However, about 30,000, or 75%, of these jobs were expected to be construction jobs lasting only from one to three years. We also noted that studies in other jurisdictions have shown that for each job created through renewable energy programs, about two to four jobs are often lost in other sectors of the economy because of higher electricity prices”.
It is highly unlikely that the overall economics of such a plan would be what Ontario’s economy really needs. If the full number of new jobs, 50,000 were created, as many as 200,000 jobs could be lost. When you consider the impact on our more traditional economy of losing that many jobs, the costs are staggering.
Much of the evidence points to facts that Ontario’s plan needs a lot more work to make it really work. Take the growth of solar and wind energy projects in Northwestern Ontario, many of the projects are producing energy that can’t be shipped to where it is needed. Ontario’s electricity grid will need a major upgrade before that can happen. Shipping higher cost electricity west to Manitoba isn’t a likely scenario, Manitoba has surplus hydro electricity capacity. In fact sources have revealed to NNL that five years ago, Manitoba offered Ontario access to their far less expensive already green electricity, but the Minister in Manitoba did not get a response.
Using a “statement of values” as economic policy is something that likely would work well during a period of major economic growth. Right now, in Ontario our province is in “have not” status within Canada. Moodys has place Ontario on a “debt watch” over concerns of our rising provincial deficit.
Heading into 2012, Ontario faces some serious challenges. As we seek to pay down debt, the demand for government services, in particular healthcare continues to grow. The McGuinty Liberals are stating that the cost of not going “green” on our energy is going to impact the health of Ontarians to the tune of $4 billion. However the costs of going “green” are $4.4 billion. In otherwords to save $4 billion, the government is planning to spend $4.4 billion.
It is likely today few people remember how John Diefenbaker pounded the federal Liberal government over “What’s a million dollars?” a statement attributed to Port Arthur MP C.D. Howe. Today when you start thinking that a billion dollars is today’s million dollars, you have to wonder what it is with governments and their seemingly insatiable hunger to spend. In Ontario, the cure prescribed by Premier Dalton McGuinty appears worse than the disease, and that does not factor in the impact of potential lost jobs, and therefore further reductions in revenues that Ontario is likely to face in a slowing economy.
Look out Ontario, the economic mess is not going to be pretty. A “statement of values” is an expensive way of running an economy in an increasingly competitive economic situation.
James Murray
Chief Content Officer