Hampton outlines incentives for industry to save jobs

Steve Arnold
The Hamilton Spectator
August 10, 2007

NDP Leader Howard Hampton has promised to cut electricity costs for Ontario’s large industries — if they promise to keep jobs in the province.

Speaking yesterday in Hamilton, with Stelco’s rusting mills in the background, Hampton unveiled a policy he said will save manufacturing jobs by trimming the cost of power 15 per cent from $65 per megawatt hour to $55 for five years.

In exchange, companies will be required to sign “Community Benefit Agreements” committing them to maintain jobs with their electricity savings and to invest in energy efficiency.

“We’re here to address the fact that Ontario has lost 175,000 good-paying manufacturing jobs in the last four years,” he said. “Dalton McGuinty has spent the last four years ignoring that job loss and the pain it is causing communities and working families.”

Hampton tied those lost jobs to the soaring cost of electricity since 2002 when a single public entity, Ontario Hydro, was replaced with four separate profit-driven agencies.

“We will consolidate all of that into one agency and we’ll restore some sanity and efficiency to the system,” he said. “This is about ensuring fairness for working people and ensuring working communities benefit from our hydro policies.”

Hampton heaped special scorn on the executives of the new agencies for hefty salaries and bonuses.

“We pay for this by cutting these million-dollar salaries, $500,000 benefit packages and luxury car allowances,” he said.

“Hydro One and Ontario Power Generation have no business rewarding executives or reaping windfall profits when skyrocketing electricity rates are destroying jobs and hurting families.”

The NDP’s call to reduce power costs have found a willing audience among business groups such as the Association of Major Power Consumers of Ontario.

“This is an idea that would be welcomed by industry, but as with all the things like this, the devil’s in the details,” said AMPCO president Adam White. “I really don’t think electricity system restructuring has worked out the way we thought it would. It was supposed to deliver lower prices and it hasn’t.”

AMPCO documented that failure in a 2006 report that concluded hydro costs for industrial users rose 30 per cent between 2001 and 2005 and warned, “These price increases are likely to result in greater declines in economic output in Ontario than in competing jurisdictions.”

Tom Adams of Energy Probe said cutting salaries would not save enough money to lower industrial rates and would almost definitely lead to higher bills for homeowners.

“If you add up all the executive salaries across the entire power system, it adds up to a very, very tiny amount on your overall power bill. Executive salaries are way less than 1 per cent,” Adams said.

“If rates are going to go down for one class of customers, they’ll have to go up for another class of customers.”

Steve Erwin, press secretary for Energy Minister Dwight Duncan, said those profits benefit ratepayers by paying off existing debt and building hydro projects. He said the impact of executive salaries has a “minuscule” effect on Ontario’s wholesale rates, which are in line with other jurisdictions like New York, Pennsylvania and Michigan.

With files from Canadian Press

This entry was posted in Energy Probe News, Reforming Ontario's Local Electrical Distribution Sector, Utility Reform. Bookmark the permalink.

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