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Further Rate Reductions Needed for Manufacturers to Protect Jobs

Published by Marie Morden on March 02, 2017

TORONTO (March 2, 2017) - Canadian Manufacturers & Exporters (CME) is pleased to see efforts made to improve the affordability of electricity in Ontario and welcomes the expanded rate relief to include additional manufacturers. However, the changes need to go much further to address the concerns of the majority of manufacturers in Ontario.

"Electricity rates are a top priority for CME members and a real constraint on growth in manufacturing," stated CME Vice President, Ontario Ian Howcroft. "A focus on reduced electricity rates for the manufacturing sector will support job growth and economic development and ultimately reduce the overall cost burden on all electricity ratepayers."

Two critical areas that remain a concern are; those that are below the new 500-kilowatt threshold for ICI and above the RPP rate rebate. The second is for operations that are not able to shift to benefit from the ICI.

CME members report that their Ontario rates are two to three times the rates that they are paying in competing jurisdictions. While some progress is being made, reforms need to go much further to improve rate competitiveness for manufacturers.

"The measures announced today, while directionally correct, really only scratch the surface. More work is needed to ensure Ontario manufacturers can compete on a North American basis," noted Howcroft.

Measures for Industrials & Manufacturers:

  • Expanding Industrial Concern program to 500 kilowatts of average peak demand - up to 34% reduction if you can shift during peak times
  • Targeting eligibility to energy intensive industries with NAICS codes 31-33 (manufacturing)
  • Small manufacturers that are not large enough to qualify for ICI would be eligible from funding social programs through provincial revenues
  • Targeted outreach to assist ICI participants to maximize the benefit
  • Everyone will see a reduction of approximately $2.60 per megawatt hour from shift to tax base and refinancing
  • Reductions will be achieved primarily by shifting some social costs to the tax base and refinancing the debt currently housed in the GA (and stretching payments over 30 years)

"While we applaud these efforts to reduce rates for customers including manufacturers, we are concerned that we are further entrenching a high-cost system that discourages production (the ICI program)," Howcroft added. "We need to pivot quickly to a system that better rewards manufacturing production for economic growth."

About CME
Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and thrive around the world. In 2016, CME released Industrie 2030 - a roadmap for doubling Canadian manufacturing activity by 2030. Our focus is to ensure the sector is dynamic, profitable, productive, innovative and growing. We aim to do this by strengthening the labour force, accelerating the adoption of advanced technology, supporting product commercialization, expanding marketplaces and, most importantly, ensuring a globally-competitive business environment. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada's exports.

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For more information, contact:
Marie Morden
Canadian Manufacturers & Exporters
Tel: (613) 355-8819
marie.morden@cme-mec.ca

 

 

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