Troy Shantz
The additional cost of Ontario’s cap-and-trade system is “overwhelming” many local businesses already struggling with soaring hydro rates, says the Sarnia Lambton Chamber of Commerce.
“I have met with businesses that have expressed that the cost of hydro for them is a tipping point,” said president Shirley de Silva.
The local Chamber - which represents more 750 businesses - was part of a coalition that lobbied the Ontario government to delay the introduction of cap-and-trade for a year.
de Silva said they asked for stability in electricity prices so businesses can plan for the future, and called on the government to obtain an independent economic analysis and long-term forecast.
“The full impact of cap and trade is still really unknown. The situation could be hugely more complicated than what politicians make it out to be,” she said.
“Companies haven’t had time to digest that they’re dealing with the burden and frustration of (higher) electricity (costs). They’re just adding this to it and the whole thing is becoming overwhelming for small businesses.”
Consumers began to feel the impact of cap and trade on Jan. 1 when it added about four cents to the cost of litre of gasoline and a dollar per gigajoule of natural gas.
An Auditor General’s report estimates residential electricity bills could rise another 23% by 2020.
Given the uncertainty, one-third of all small businesses say they may delay or cancel new investment, according to a recent Ontario Chamber survey.
The impact of cap and trade on the Chemical Valley is also a worry for local officials.
Industries and businesses that emit more than 25,000 tonnes of greenhouse gases annually must participate in the program and will be required to purchase credits to offset their emissions.
The cost of each credit is still unknown, but Union Gas and Enbridge conducted a joint study last year based on an estimate of $18 per tonne.
At that price, corporations may look to move their local operations to less expensive jurisdictions in the U.S., a local union leader warned last year.
de Silva said although cap and trade is already here the chamber doesn’t believe it’s too late advocate for change.
The Ontario Retirement Pension Plan also appeared to be a done deal before the government finally reversed itself, she noted.
“If you think change doesn’t happen, this is a case where it did.”