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Cost for green initiatives could kill Ontario companies

TORONTO – Dalton McGuinty constantly extols the virtues of so-called green energy.

One North Bay company, however, is sounding the alarm that the costs of this expensive program are forcing companies to lay off staff – and will eventually force many of them to leave the province.

John Spencer is an executive with Fabrene Inc., a company that makes industrial fabrics.

The Liberal government’s green energy plan has added $1 million a year to his hydro bill – an amount he says will eventually force his company out of this province.

There’s a line on corporate energy bills called the “Global Adjustment.” It’s that line that pays for renewable energy projects.

Spencer’s seen the GA soar over the past few years – from 5% of his bill to 42%.

In his most recent report, provincial auditor general Jim McCarter warned by 2014, the Global Adjustment is expected to be six cents per kilowatt hour – nearly two-thirds of the total electricity charge

The GA is expected to increase tenfold province-wide, from about $700 million in 2006 to $8.1 billion in 2014, when the last of the province’s coal-fired plants is phased out.

Almost one-third of this $8.1 billion is attributable to costly green energy contracts.

That will sound the death knell for his company in this province, Spencer said.

“My company won’t make it that far.”

The cost of hydro itself is competitive, he said. It’s the GA – and the $1 million it’s adding to his bill that’s killing jobs.

Electricity is now his third biggest cost – after raw materials and labour.

He has to explain that non-competitive rate to plants in the U.S., South America, China and Europe.

“It’s a very bleak outlook,” he says.

“It’s a runaway freight train. We’ve got to stop it in its tracks or we’re going to kill a great majority of small and medium sized companies,” Pearson said.

Ironically, at least 42 of the largest companies in the province are exempt from the GA.

The McGuinty government quietly gave Imperial Oil, most large mining companies, Suncor and other large consumers of electricity a break from it in 2010.

As well, this province has an excess of energy, which is being sold off cheap to neighbouring jurisdictions – the very people Pearson has to compete with.

“You’re taking extra money out of my pocket and essentially giving it to my competitors,” he said.

Nipissing MPP and Tory energy critic Vic Fedeli, says it’s not just Pearson’s company that’s suffering.

“He’s the point on the end of the spear and he’s trying to get other manufacturers to take a second look at their hydro bills,” Fedeli said.

Pearson says his beef isn’t against green energy. He says it’s a “proper and noble cause.

“But you just can’t execute it by killing all the businesses along the way.”

Closing coal-fired plants was a costly mistake.

Destroying the countryside with thousands of wind turbines that are owned by off-shore companies was an even bigger one.

The government saw the writing on the wall when mining giant Xstrata shut its smelter in Timmins and moved the operation 200 km west – to Quebec – where hydro is cheap.

That’s why they gave Xstrata a break on the GA.

Now they have to level the playing field for small and medium sized businesses.

That leaves just one big question.

Who’ll pay for McGuinty’s Green Energy Plan if business is exempt?

Ooops. Guess that would be me.