Daulton McGuinty was on CBC’s The House today and asking for a fair deal from the feds on green energy support. He argued that if the feds were getting in on the NL-NS Muskrat Falls project, they should be helping Ontario – the province that has the highest commitment to green energy (in the Premier’s view).
The host asked him to comment on Ignatieff’s musings about significantly expanding hydro-power in Northern Quebec and Labrador and using that clean power to completely replace all coal and gas fired generation in Ontario, Quebec and Atlantic Canada.
Daulton bristled at this and stated “we have our own plan”.
The truth is that green power in Ontario was only ever partially about carbon reduction and ‘green’ energy. I believe the main driver was that Ontario wanted to build green energy as an economic development driver for the economy.
People that look at these things will say that hydro power coming out of northern Quebec and Labrador – if scaled – will be 40% – 50% cheaper than the solar, wind, gas, etc. electricity mix that Ontario has going now.
But, as I have discussed numerous times, McGuinty is willing accept the 40% premium in cost (not on gas but certainly on wind/solar) as a trade off to create tens of thousands of green jobs in Ontario and hundreds of millions in tax revenue. I heard one Ontario cabinet minister saying this would be Ontario’s next auto industry.
In many ways it is a fascinating example of industrial policy. If Ontario added a point to the HST and said that money was going directly as a subsidy to build a new industry, the public would likely be outraged but blending this premium into rates and wrapping it in a green blanket has so far been accepted by most Ontarioians. Most households in Ontario are less exposed to the cost of electricity because of the wide use of natural gas (as compared to a place like New Brunswick) but the cost of building the green energy sector in Ontario will eventually cost the province billions over cheaper energy source (including clean hydro) but it will also generate billions in economic activity that otherwise wouldn’t have been there (over 20-30 years).
This fact is the main reason why I have been somewhat reluctant to support wind and tidal energy in New Brunswick. Because here, like most other sectors, we just end up buying the technology and systems produced elsewhere so we pay the higher costs and don’t get the economic development benefits. In that scenario, I would much rather have done a deal with Hydro-Quebec to bring down lower cost hydro power – but then again there is no need to re-flog that beast – we flogged it to death already.