Green legislation will hike energy costs: report

TORONTO - Ontario residents could see their electricity bills go up by hundreds of dollars a year once the province's Green Energy Act takes effect, according to a new report released Monday.

Higher energy costs brought on by the legislation could see household bills rise by $280 to $780 a year on average between 2010 and 2025, said the independent study commissioned by the Opposition Conservatives.

That doesn't include the impact of tax harmonization, which will tack on another eight per cent to home heating costs when Ontario merges its sales tax with the federal GST next year.

The government insists its green energy bill will attract investment in renewable energy to Ontario by streamlining project approvals, mandating more efficient appliances, and providing low-interest loans to homeowners who wish to build their own small-scale wind or solar projects.

But their claims that the legislation will create more than 50,000 jobs over three years is unsubstantiated, according to the report by London Economics International.

The bill doesn't provide details on how the jobs will be created, but Energy and Infrastructure Minister George Smitherman has said the plan will boost work in construction, trucking and engineering.

The number seems "quite high" given that Ontario's auto industry employed 38,000 people last year, said Benjamin Grunfeld, a senior consultant at the advisory firm specializing in energy, water and infrastructure.

"As electricity prices in the province increase, the province becomes less competitive relative to its neighbours, and you run the risk of actually losing jobs," he said.

The full study won't be available until later this month, but its initial findings left the Conservatives fuming in the legislature.

"We've already seen over 300,000 manufacturing jobs leave this province under your watch," Tory critic John Yakabuski told Smitherman.

"You're driving a stake further into the economic heart of this province and bringing Ontario further into the abyss of have-not status by scaring investment and new business away."

Smitherman insisted any additional costs to consumers will be minimal and accused the Opposition of harbouring a secret agenda to keep Ontario's polluting coal-fired plants open.

"But perhaps they believe in carbon capture, where they're going to take the smokestacks and turn them upside down," he fired back.

Outside the legislature, Smitherman dismissed the report's cost projections as flawed and based on "wild fluctuations."

Residents can expect their electricity bills to increase about one per cent per year, and they can reduce their costs through conservation efforts aimed at reducing energy consumption, he said.

Government officials could not be immediately reached for comment on how Smitherman arrived at that figure.

"Our strategy isn't just about more renewables on the one hand," Smitherman said.

"It's also about investing with people in their homes and businesses and institutions, to be able to go about their lives and to use less electricity, which is a big, big thrust of it."

London Economics said its cost projections were based on "verifiable third-party sources," Ontario Power Authority data and "reasonable estimates" of the amount of renewable energy that could be fed into the grid.

The report concluded that Ontario should explore more "cost-effective" ways to reduce its greenhouse gas emissions.

Other approaches, such as the cap-and-trade system in the U.S. northeast and British Columbia's carbon tax, make "better use of market forces" and provide environmental benefits at a potentially lower cost, it said.