Green-energy costs trim manufacturing output in Ontario

Nov. 6, 2017
Green energy, the official antidote for global warming, is curing Ontario of factory work.

Green energy, the official antidote for global warming, is curing Ontario of factory work.

The province began phasing out coal-fired generation of electrical power in 2005 and enacted a green-energy law in 2009.

During 2005-15, says a report published by the Fraser Institute, manufacturing output fell by 18% and employment by 28%.

Between 2010 and 2016, notes the study by Ross McKitrick and Elmira Aliakbari, electricity costs for small industrial consumers in Ottawa rose by 50% and in Toronto by 48%. Meanwhile, the average cost in the rest of Canada increased by 15%.

The pattern was similar for large industrial users.

Manufacturing and employment slump for reasons other than electricity rates, of course- a recession beginning in 2008, for example.

But Ontario hasn't recovered nearly to the extents other provinces have.

"We estimate that about two thirds of the lost manufacturing jobs from 2008 to 2015 in Ontario's manufacturing sector were likely attributable to rising electricity prices," McKitrick and Aliakbari write. "Taking the provincial government's green energy job creation claims at face value, we nonetheless estimate that Ontario lost between 1.8 and 3.6 permanent manufacturing jobs for every permanent new job created under the green-energy initiative since 2008."

Ontario, traditionally Canada's manufacturing leader, accomplished all this with a feed-in tariff that guarantees above-market prices for electricity from renewable energy. It eliminated most coal-fired generation by 2014.

The deliberate replacement of affordable energy with costly forms had predictable results. "Ontario now has the highest electricity costs across all Canadian provinces and among the highest costs in North America," write the study authors.

Ontario, where manufacturing accounts for 13% of economic output and 11% of employment, must have citizens who think resisting climate change warrants these economic strains. But probably not many of them belong to the group of 75,000 Ontarians estimated to have lost factory jobs since 2008.

Indeed, a sure way to lower GHG emissions is to make people quit working. Ontario is showing the world how to do it. (From the subscription area of www.ogj.com,