The Problem With Rising Electricity Costs in Ontario's Manufacturing Sector



Immediately below are statistics that demonstrates the big problem faced by Ontario's manufacturing
sector, and the potential ramifications on the whole of the Canadian economy. The statistics in
question were pulled from a relatively recent White Paper published by Ross McKitrick and Elmira
Aliakbari of the Fraser Institute, entitled "Rising Electricity Costs and Declining Employment in
  • Ontario accounted for almost half of the manufacturing activity in Canada
  • Ontario's manufacturing sector accounts for almost 40% of national exports       
  • Electricity is a major input cost for Ontario manufacturers
  • A competitive manufacturing sector does not allow passing on energy costs to customers
  • Ontario cities have been experiencing faster rate increases than any other city in North America
  • Industrial electricity rites in Ontario rose by 16% between 2013 and 2015
  • Ontario industrial customers pay the highest electricity costs among all major Canadian cities
  • Ontario industrial customers face some of the highest costs in all of North America
  • 1 out of 20 businesses in Ontario expect to close in the next 3-5 years due to electricity costs
  • 2/3 of lost manufacturing jobs from 2008 to 2015 are attributable to rising electricity prices
  • 40% of industries and businesses were found to have cancelled or delayed investment decisions
  • Electricity costs for small industrial consumers in Toronto rose by 48%
  • Toronto faced the highest all-in electricity costs among of all major cities at 16.3¢ per KW/h
  • Calgary and Vancouver paid only 6.5¢ and 9.5¢ per kWh
  • Average cost of electricity in the rest of Canada rose by only 15%
  • The increase in electricity costs for Montreal was 0nly 11%
  • Consumers in Edmonton and Calgary enjoyed a decrease of almost 1%
  • Large consumers Toronto saw a spike in overall electricity costs of 53%
  • Average increase in electricity costs in other Canadian cities for similar consumers was 14%
  • Large Ontario consumers paid 3x more than consumers in Montreal and Calgary (6¢ and 5.1¢)
  • Montreal, Edmonton, and Calgary observed a small increase of 10%, 7%, and 5% respectively
  • Even after a rate reduction, large industrial (Class A) consumers in Ontario in 2015 were 62%, 42% and 19% higher than rates in Quebec, Alberta and British Columbia
  • Toronto ranked 3rd after New York and Boston in terms of electricity costs
  • Between 2010 and 2016, electricity costs faced by large consumers in Toronto rose by 46%
  • Portland and Seattle’s electricity costs for large-demand consumers were 71% and 62% lower than those in Toronto
  • From 2008 to 2015, electricity costs for industrial Class B customers rose from 7.7¢ to 12.3¢ per KWh (a 60% price increase)
  • Class A customers paid only 8.6¢ per KWh in 2015, an increase of only 11% from 2008

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