Canadian Manufacturing

Canadian industry paying more for power than U.S. counterparts: study

Small industrial firms in Canada paying 30 per cent more for power, according to Fraser Institute

CALGARY—Small industrial businesses in Canada pay almost a third more for electricity compared to their counterparts in the United States, a new study claims.

Published by the Fraser Institute, the study examined electricity rates for residential, commercial and Industrial customers in 119 Canadian and American cities, and found that small industrial firms are paying 30 per cent more for power here.

Canadian commercial customers pay 19 per cent more for power, while residential customers pay 1.5 per cent more, the study claims.

“These higher electricity rates put Canadian businesses at a competitive disadvantage and deter future economic development,” Kenneth Green, study co-author and Fraser Institute senior director of energy and natural resources, said in a release.

“This is particularly troubling for a province such as Ontario, which has a significant manufacturing sector, and Alberta, which relies on resource extraction.”

The study blames the shift away from coal-fired electricity generation and “a failure to fully embrace” natural gas-fired plants, particularly in gas-rich provinces like Alberta and Saskatchewan.

“The shift away from inexpensive coal-fired generation capacity in Ontario, and the failure of resource-rich provinces Alberta and Saskatchewan and gas-poor provinces such as Ontario to fully embrace natural gas-fired capacity, is penalizing commercial and industrial electricity consumers,” Green said.

The study suggests further development of hydro-electric facilities, investment in natural gas generation capacity, more clarity in regulations around air pollution and greenhouse gas (GHG) emissions, and taking another look at subsidies for renewable energy projects to combat the higher prices in Canada.

“Although the environment should be a key consideration in investment decisions about generation capacity, policy makers should not place unnecessary burdens on taxpayers and electricity consumers by propping up expensive electric-generation alternatives,” Green said.

Of the 119 cities examined, 12 were Canadian.

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