Vehicle Manufacturers' Association Unimpressed With Hydro Savings

The Canadian Vehicle Manufacturers' Association feels the provincial government's move to give Ontarians some hydro relief doesn't do much for automakers.

Association president Mark Nantais says electricity costs can be two to three times higher than in competing jurisdictions.

He sees the move to add $1.4-billion in debt to reduce bills by about 17% on average just "kicks the can down the road" and does little to address the climate of investment uncertainty.

Nantais includes Ontario's new cap and trade program — part of the government's action on climate change — as one of the pressures driving up power and other costs for manufacturers.

He can't predict what the escalating costs would mean for the futures of companies like Chrysler and Ford in Windsor, but says it needs to be addressed.

"Clearly, electricity costs are a pretty significant item here and while that may in itself may not be the deciding factor, it's these multiple factors that are ultimately going to play into the decision for future investment," says Nantais.

As companies make decisions for ten years into the future, Nantais says the government needs to address hydro costs for industry sooner rather than later. He says it's one of the top issues for companies.

"It's right up there when you've got hydro bills that are literally in the tens of millions of dollars," says Nantais. "Some of the steps, people suggest, they may provide some relief; the cost of carbon is really estimated to cut into what people are saying is that $3 saving per megawatt."

Nantais says industry isn't looking for a handout in dealing with high power bills.

"I don't think this involves grants at all," says Nantais. "This is about restructuring the rate structure. This is about making future decisions and making sure the cap and trade program for instance does not add to the cost of electricity. In fact, it was suggested already by the government that that would not be the case, but that does not seem to be true."

Nantais says the government can't neglect auto manufacturing which he says leads to 124,000 jobs in Ontario and adds millions of dollars to the provincial economy each year.