Despite overwhelming evidence that governments do badly when they try to remove the freedom from free enterprise, Wynne and McGuinty ploughed ahead with their green energy vision.
This article, which quotes CPI’s research, first appeared in the National Post.
When former premier Dalton McGuinty visited the new Siemens Canada plant in Tillsonburg in 2011, he brushed aside protesters and boasted that the plant was part of the Liberal alternative energy plan that would “put us at the forefront in North America.”
The plant made windmill blades. Windmills were the future. Clean energy was what McGuinty’s two-year-old Green Energy Act was all about. It would free the province of old, dirty manufacturing and introduce new, cutting-edge jobs that would make Ontario the envy of the world.
Just six years later the plant is closing. Management says big changes in the wind industry make it no longer viable. The cutting edge plant that was to help lead Ontario into the Valhalla of a clean energy future can’t survive in a market that wants bigger blades.
McGuinty has long since faded into retirement. He chose to step down rather than endure further questioning about an earlier energy fiasco. There was no sign of his successor, Kathleen Wynne, outside the factory, Tuesday, as newly-jobless workers sought an explanation for the closure. “There was quite a bit of anger in there because they shut the place down the other night and never really told anybody about it,” one complained to The London Free Press. “It was bang, everything was locked down.”
Wynne has been busy attending a meeting of the National Governors Association in the U.S., arguing against radical changes to the NAFTA free trade accord. NAFTA is critical to Ontario, particularly given the flow of manufacturing plants leaving the province over high costs, increasing regulation and expensive electricity. At the same time that the Liberals announced a subsidized cut in power prices, they introduced a carbon tax that negates the savings and adds to the difficulties of small industries trying to keep afloat. Wynne also plans to impose a $15 minimum wage on employers, as well as a package of new labour laws, despite predictions companies will be forced to cut staff to absorb the higher costs.
Does anyone remember the last time anything positive emerged from Ontario’s electricity industry, battered and bruised from 13 years of Liberal government manhandling? Hydro rates so punitive the Liberals have applied layer on layer of subsidies, borrowing the money or pushing debt onto future generations to do so. An estimated $45 billion extra in future costs so the government can reduce consumer bills now, as it campaigns for re-election. Billions lost selling power at a loss to the U.S., which will now be made easier by approval of a power line under Lake Erie.
Wynne’s government has been steadily retreating from a green energy deal with Samsung, even while proclaiming its continued devotion to McGuinty’s green vision. In 2013, it cut its planned purchase of electricity from Samsung projects by $3.7 billion, more than a third of the original agreement. In return, Samsung cut its planned investment by $2 billion.
In September, the Liberals ended plans for any new projects, admitting the power wasn’t needed. They had little choice after a report by the Independent Electricity System Operator indicated the province had enough power to last a decade. Characteristically, Energy Minister Glenn Thibeault hailed it as evidence of the government’s fiscal prudence, rather than proof of a colossal failure. “By putting our finger on the pause button it allows me to save $3.8 billion for ratepayers, and that’s pretty significant in terms of helping ratepayers right across the province,” he proclaimed.
Siemens Wind Power chief executive David Hickey was careful not to blame the Liberal change in plans for the Tillsonburg closing, but plenty of others were happy to. Companies like Siemens come for the subsidies, and when the subsidies disappear, so do they, said independent industry analyst Tom Adams. Ontario has poured so much into its green energy dream the market is saturated, he said. Hickey said the market is shifting west: Alberta and Saskatchewan are “the key opportunities of the future.”
Liberal energy strategy was always predicated on the belief that politicians could dictate to the market and control the outcome. Despite overwhelming evidence that governments do badly when they try to remove the freedom from free enterprise, Wynne and McGuinty ploughed ahead in their determination to impose their vision on Canada’s biggest province and most important economy. The result has been a catalogue of disasters. The $2 billion smart meter program that proved a bust at reducing demand; the gas plant construction projects halted in mid-campaign to protect a few Liberal seats; the doubling of consumer electricity bills; the army of windmills marching across vast expanses of rural Ontario, defacing the landscape while producing pricey, unneeded power.
In September, the Consumer Policy Institute calculated that Ontario had paid $6.3 billion to ship electricity outside of the province, while Ontario’s auditor general says hydro customers paid $37 billion more than necessary from 2006 to 2014 due to a catchall “adjustment” charge to cover the costs of past boondoggles. Having brought about the disaster, the Liberals have little choice but to insist that some day, down the road sometime, Ontarians will be grateful for the far-sighted policies they maintain will eventually pay off.
Maybe. And maybe Wynne and her energy minister can put their heads together and devise a way to declare the plant closing in Tillsonburg a blessing in disguise. How about this: without jobs, those 340 employees and their families will have to cut back their budgets, use less electricity, keep the car in the garage. Yet another victory for the Wynne Liberals’ far-sighted crusade to reduce energy consumption in Ontario, no matter what the costs to Ontarians.