"Manufacturers are pleased the government listened to Canadian Manufacturers & Exporters (CME) member recommendations and is taking action to reduce Ontario electricity bills immediately," said Dennis Darby, President & CEO of CME.
"The majority of manufacturers have identified cash flow as their top concern during the crisis, "added Darby. "The GA system would have caused a nearly $2 billion cost surge to Ontario manufacturers this year. This new initiative by the government is on top of the billions in support already provided to help manufacturers weather this unprecedented storm. All these measures are a great start in helping businesses of all sizes stay afloat during the crisis and, keeping Ontarians employed."
"We call on the Ontario government to continue to consider the impact of electricity costs on the manufacturing sector, even after the COVID-19 crisis is resolved," stated Darby. "High prices are putting Ontario manufacturers at a significant competitive disadvantage and, discourages investments." A recent report from London Economics International (LEI) found that when compared to jurisdictions with similar manufacturing industries, Ontario's electricity prices can be up to 75% more expensive.
To provide companies with temporary immediate relief on their electricity bills, the Ontario government is deferring a portion of Global Adjustment (GA) charges for industrial and commercial electricity consumers that do not participate in the Regulated Price Plan (RPP), starting from April 2020. The GA rate for smaller industrial and commercial consumers (i.e., Class B) has been set at $115 per megawatt-hour, which is roughly in line with the March 2020 value. Large industrial and commercial consumers (i.e., Class A) will receive the same percentage reduction in GA charges as Class B consumers.
The Ontario government intends to keep this relief in place through the end of June 2020, subject to necessary extensions and approvals to implement this initiative.
Industrial and commercial electricity consumers will automatically see this relief reflected on their bills. Consumers who have already received their April bill should see an adjustment on a future bill.
The government intends to bring forward subsequent amendments that would, if approved, recover the deferred GA charges (excluding interest) from industrial and commercial electricity consumers over a 12-month period beginning in January 2021.