Picking winners and losers is not the role of government

By DAN PELTON  Orangeville Citizen

Dufferin-Caledon MPP Sylvia Jones says the Ontario government’s recent $7 billion deal with a South Korean consortium to bolster the province’s green technology industry will have dire consequences for electricity consumers.

Premier Dalton McGuinty signed an agreement with Samsung C and T and the Korea Electric Power Corporation that will see $7 billion invested in Ontario to create 16,000 new jobs over six years.

Samsung will build wind and solar farms across Ontario that will generate 2,500 megawatts of power, and will also build four plants to manufacture components for green energy projects, creating the 16,000 jobs in the process. Most of those will be temporary, but 1,440 permanent manufacturing and related jobs are promised.

“If looking at your current winter hydro bill fills you with dread, then you may not want to hear what the government has in store for you,” Ms. Jones warned in a press release. “The sad truth is, hydro is about to get a whole lot more expensive.”

Ms. Jones pointed out that the province has signed a contract “agreeing to pay a foreign multi-national a premium price for the large renewable energy projects – 13.5 cents per kilowatt hour for wind and 44.3 cents for solar. That compares to five cents per kilowatt hour for existing Ontario energy production.”

According to daily tallies released by the Independent Electricity System Operator (IESO), the body responsible for the day-to-day operation of Ontario’s electrical system, wind power now accounts for approximately one per cent of the province’s daily consumption.

On Tuesday, for example, the peak output for wind power was 203 megawatts, compared to 11,296 for nuclear and 5,000 for Hydro. Ms. Jones is among number of politicians and business people who are angry at what they see as government dealing exclusively with a foreign company and leaving the Ontario green energy industry out of the mix.

“I have a philosophical problem with signing a single source untendered contract,” said Ms. Jones. “The McGuinty Liberals are clearly favouring one foreign multi-national over struggling Ontario businesses. Ontario businesses that have green energy technology will now need to partner with Samsung if they want to participate in these renewable energy projects.”

The government has argued that the agreement with the South Koreans gives Ontario the opportunity to take a substantial leap in the alternative energy sector.

While there is capacity in the province to build the towers for a wind turbine, the rest of the equipment is imported.

Premier McGuinty envisions green technologies as being a major export to the U.S. market, much like cars currently are. “What we want to do is take the green energy economy in Ontario to a higher level,” he told the Canadian Press. “It can’t just be about Ontario it´s got to be about making technology for the U.S.”

Progressive Conservative leader Tim Hudak called the Samsung agreement the “mother of all untendered contracts,” an allegation Premier McGuinty said was “nonsensical,” noting that when Toyota wanted to build a new plant in Ontario, the government didn’t insist that it bring Ford and General Motors into the deal as well.

“Picking winners and losers is not the role of government,” countered Ms. Jones. “The government’s track record is abysmal dating back to the famous Suncor deal. We should focus instead on targeting taxes that would make Ontario desirable for investment for all companies. Ontario based companies should be given an opportunity to become leaders in green technology.

“So, the Liberals have signed a very expensive single source contract that I believe will cost each of us a great deal in the future. All of this from the guy who promised solemnly that he would freeze electricity rates and not raise taxes.”

The “famous Suncor deal” she referred to was the decision in 1981 of former premier William Davis to purchase a 25 per cent share of Suncor Corporation for $625 million to give his government a “window” on the oil industry. In 1985, David Peterson’s Liberal minority government wrote off the investment.

2 thoughts on “Picking winners and losers is not the role of government

  1. McGuinty won’t even listen to his own cabinet so we can’t expect anyone outside his closed “circle of friends” to have any effect on his decision making…………his “head down………..forging ahead against all odds” manner of bullying the Province into a very dark and miserable place to do business is on full throttle and won’t stop until he is thrown out of office!

  2. What appears to be lost in the Provincial Oppositions’ argument is that for Ontarians this is simply just a very bad deal, whether it be with Samsung or had it been with a consortium of Canadian companies. The loser here is not the Ont. green energy industry, it is the consumer and the taxpayer.

Comments are closed.