Thursday, November 25, 2010

Power hikes will zap jobs

There seems to be no end to the creative ways Ontario's Liberal government can find to shoot itself in the foot.

The latest: Not only are hydro rates going to double again over the next 20 years -- after nearly doubling over the past seven -- you're going to like it, the province announced Tuesday as it unveiled its long-term energy plans.

The higher rates are needed to pay for the $87 billion they're going to shovel into nuclear power generation and "green" energy from solar and wind generation.

The Liberals say the investment will create 50,000 new jobs, many of them temporary, many of them in Windsor.

They were mum on how many permanent manufacturing jobs will likely disappear due to the higher cost of producing steel and building cars in Ontario.

Bizarrely, they seemed to rub consumers' noses in the coming pain. Not only are you going to like the next round of hikes, you are even "willing to fight" for the right to pay higher rates, Energy Minister Brad Duguid said in a sound clip that will probably come back to haunt the party in the election next fall.

Who told them Ontarians are willing to "fight" for higher hydro rates? Probably a bunch of well-heeled and high-minded activists plucked off the streets of downtown Toronto for focus groups they tested the message on.

Anybody in Windsor or London or Cambridge or the other high unemployment cities could have told them it was a bad idea to essentially taunt consumers about the rate pain to come.
But it is doubtful this tone-deaf government would have listened or even understood the nature of the public mood even if they had heard.

I've always been of the mind that it's a good idea to pay top public officials well, to get good help in government.

But this is one of the downsides of paying a cabinet minister $165,851.04 per year, not including expenses or the cost of the chauffeured limo.

It probably isn't a big deal to the $165K club to hear the family hydro bill is going to double. So they don't think the rest of us will mind, either. Wrong.

It's a safe bet that Duguid and the rest of the Dalton McGuinty government are about to find out just how depressing that spectre is to the Ontario outside the sycophantic bubble surrounding Queen's Park.

Three groups are going to go nuts on them in the weeks to come, starting with the one million or more citizens who live in households crippled by unemployment.

Next will be the millions more living from paycheque to paycheque.

And finally, they're probably going to hear an angry word or two about the rate hikes from the still-bruised survivors of the manufacturing industries. So says Pete Mateja, co-director of the Office of Automotive and Vehicle Research at the University of Windsor.

"It's bad enough right now with the exchange rate -manufacturers are getting hammered," Mateja, a veteran of the automotive and steel industries, said Wednesday.

"Anybody in steel or aluminum or plastic injection moulding -anything with a furnace or a press running -is going to hurt" from higher hydro rates, says Mateja. "It's going to be really tough for them to compete."

Ontario's steel industry could be devastated by the hikes, along with auto parts producers which consume energy, says Mateja, who was once a vice-president of Algoma Steel in Sault Ste. Marie.
"It's just staggering what even a small increase of one per cent does to their bottom lines," he said. "It's just another thing that's going to make us less competitive. It's going to have an impact on jobs" -both existing jobs, and the new ones we hope to create. "If you were looking to invest in North America, would you come to Ontario now?"

What's left of our shrinking middle class is going to hurt more, too. You may have heard some of the moaning in recent weeks about summer hydro bills topping $500 per month for the first time, either because of the cost of air conditioning or running a swimming pool.

You know what's going to happen to those luxuries once the bills hit $1,000 -not to mention the burgeoning electric car industry. Why buy one if gasoline is cheaper?

The better question is why the McGuinty government thinks voters want to create a relative handful of green jobs if the cost of doing so is losing their own.

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