Local firms seek power price relief
Some companies heading across border because of cheaper hydro
The fourth generation of Stoyshins has been increasingly pitching in at family-owned Essex Linen Supply Ltd., as a way for the business to cope with escalating hydro and other utility prices.
“We can’t move to Ohio, all our business is here,” said Chase Stoyshin, 22, who’s otherwise a full-time student taking finance at St. Clair College. The company started by his great-grandfather, Don, in his Windsor basement in 1965, uses a lot of energy and the electricity bill alone has shot up 53 per cent in the last five years.
When Ontario began adding cap-and-trade charges to electricity bills in January, it meant family members such as Chase had to step up their involvement. “It’s something that comes right off our bottom line,” he said of any new costs in a competitive industry.
Windsor-Essex Regional Chamber of Commerce CEO and president Matt Marchand said the cost of power in Ontario is his membership’s No. 1 concern. Some local greenhouse operators have been voting with their feet, announcing new multimillion-dollar facilities across the border in Michigan and Ohio, while other business investors are shying away from local startup or expansion plans.
It means lost local economic opportunity and foregone jobs, said Marchand. The automotive and agricultural sectors are the local region’s top two economic drivers, and manufacturing and greenhouse operations “require a lot of energy,” he said.
“We’re becoming a very highcost jurisdiction, and our cost structures are becoming out of line with our competing jurisdictions,” said Marchand, adding the latter is represented by the U.S. Midwest, in particular Michigan and Ohio.
The message from Marchand and other business representatives to senior government officials on a trip earlier this week to Queen’s Park is that Ontario, with lots of hydro and nuclear and no coal power generation, already boasts one of the cleanest electric grids in the industrialized world. But with no apparent interest by the new Trump administration in green energy expansion south of the border, he said, implementing carbon pricing here only means “we’re competing against ourselves.”
Worse, those Ontario companies setting up shop in Ohio are plugging into a coal-generated power supply that Trump has pledged to expand and that will add to air pollution on this side of the border.
“We’d like to see them hit the pause button,” said Stoyshin.
On Thursday, Premier Kathleen Wynne, who had previously described high hydro rates as her government’s “mistake,” did just that, promising to reduce electricity rates now and then pay for it by passing on extra costs to future generations.
In addition to the elimination in January of Ontario’s eight per cent tax portion on hydro bills, the average consumer was promised another 17 per cent reduction on their electricity costs by the summer.
“It’s certainly a step in the right direction — our hope is that this will also apply to business,” said Marchand.
That remains unclear. A spokesman for Ontario’s energy minister told the Star Thursday night that it was “difficult to confirm” which businesses might be eligible for the energy rate reduction and by how much. The focus of the announcement, he added, was on reducing electricity bills for families, farms and small- to medium-sized businesses by an average of 25 per cent.
The spokesman said any hydro customer who started receiving the eight per cent savings in January would be eligible for the new 17 per cent rate reduction as well. Essex Linen Supply, with 30-40 employees, did not get any such January reduction, said Stoyshin.
“I feel for them,” local MPP Percy Hatfield (NDP — Windsor-Tecumseh) said of Essex Linen. For many Ontarians, the reductions announced Thursday “help a bit, but I don’t think enough,” he said, adding the relief comes years late and only on the eve of an election and only after his NDP bombarded the government with hardship “real-life stories from the people in our ridings.”
Marchand said Ontario has to have a competitive cost structure for its economy or it will lose out on the employers who pay into the province’s health care, education and infrastructure. New charges like the province’s cap-and-trade carbon tax begun in January are “an incentive to leave Ontario,” he said, particularly for higher energy users.
Chase Stoyshin’s father, Lance, said Essex Linen invested heavily in energy-efficient equipment in 2000 when natural gas prices were “just starting to go to the moon.” But the giant tunnel washer, industrial irons and three huge three-million-BTU commercial dryers require a lot of energy to run, and he estimates annual electricity costs alone have gone up by $16,000 in the last five years.
When the bills go up, Chase said that, more often, “the family has to jump in ... working longer hours and after-hours to get things done.”
Marchand said Ontario “can’t solve the world’s emissions problems on its own,” and that the business community is pushing the government to at least wait and see what happens south of the border.
“Incentivizing companies to leave for Ohio where they plug into coal doesn’t seem to make environmental sense ... most of our air comes from the U.S.,” he said.
“The government needs to listen to small business — we’re the middle-class the government’s always preaching about,” said Chase.