TORONTO (November 26, 2019) — London Economics International (LEI) released a report today highlighting the need to reduce industrial electricity prices in Ontario to preserve the manufacturing sector’s competitiveness, a key economic driver in the province. Commissioned by CME, but completed independently, the report found that when compared to jurisdictions with similar manufacturing industries, Ontario’s electricity prices can be up to 75% more expensive.
“The report found that when compared to four US states that produce competing goods, Ontario’s electricity prices are much higher,” said Dennis Darby, President & CEO of Canadian Manufacturers & Exporters. “This puts Ontario manufacturers at a significant competitive disadvantage and, discourages investments.”
“The disparity was particularly prevalent for Class B electricity consumers, small- and medium-sized manufacturers, who have seen an 86% increase in prices from 2007 to 2018,” added Darby. “Class A consumers, usually big industrials in heavy-usage sectors like steel and auto, fair a little bit better, however, the prices still miss the mark.”
Manufacturing is vital to Ontario’s economy and to the prosperity of all Ontarians. The numbers speak for themselves: the sector directly accounts for more than 12 per cent of provincial GDP, generates more than $300 billion in annual output, and accounts for more than 80 per cent of Ontario’s exports.
“Manufacturers in Ontario identify high electricity costs as a key impediment to their competitiveness,” said Darby. “We encourage the government to consider the data put forward by LEI and take steps to focus on creating more manufacturing jobs, growing the sector, and scaling up businesses by lowering electricity prices.”
Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and, compete around the world. Our focus is to ensure manufacturers are recognized as engines for growth in the economy, with Canada acknowledged as both a global leader and innovator in advanced manufacturing and a global leader in exporting. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.
ABOUT LONDON ECONOMICS INTERNATIONAL
London Economics International LLC (“LEI”) is a global economic, financial, and strategic advisory professional services firm specializing in energy, water, and infrastructure. The firm combines detailed understanding of specific network and commodity industries, such as electricity generation and distribution, with sophisticated analysis and a suite of proprietary quantitative models to produce reliable and comprehensible results.
The firm also has in-depth expertise in many economic and financial issues related to the power, gas, and water sectors, such as asset valuation, procurement, regulatory economics, and market design and analysis. LEI has done extensive work with electricity markets in North America, Europe, Asia, and the Middle East, and has a comprehensive understanding of the issues faced by utilities and regulators alike.
FOR MORE INFORMATION
Director of Communications & Branding
Canadian Manufacturers & Exporters