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Remortgaging Ontario’s hydro system: short-term relief for longer-term cost

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Toronto, March 2, 2017 – Today’s Ontario government hydro announcement will provide some immediate and much-needed short-term relief to Ontario’s small businesses, but the Canadian Federation of Independent Business (CFIB) is concerned that this "resolution" of the hydro crisis is being passed on to the next generation of small business owners and residences.

"By refinancing the province’s hydro assets from 20 to 30 years, we’re just kicking the can further down the road," said Plamen Petkov, CFIB’s vice president. "Immediate relief is important, given how out of control hydro costs have become, but we should not lose sight of the longer-term implications of the costs of this plan. What happens when interest rates start going up?"

Some relief was also announced for manufacturers through the expansion of the Industrial Conservation Initiative (ICI), as well as a reduction in distribution charges for rural customers. However, the government was silent on addressing time-of-use pricing. In a recent survey of Ontario small business owners, 86 per cent said that they have been unable to shift their electricity consumption from on-peak to either mid-peak or off-peak hours to manage electricity costs.

"Time-of-use pricing penalizes small businesses just for being open during regular business hours," said Julie Kwiecinski, CFIB’s director of provincial affairs for Ontario. "Making a pizza at 4 a.m. to serve at noon because hydro is cheaper is not a viable business option."

"We are also concerned that this plan will initially shift hydro costs from the ratepayer to the taxpayer," added Kwiecinski. "Small business owners are taxpayers, too. Lowering hydro bills while increasing pressure on the government’s coffers might lead to higher taxes in the future."

CFIB is continuing to encourage the Ontario government to also immediately remove the Debt Retirement Charge from commercial hydro bills, and require the Global Adjustment fee to be visible and explained on all bills to inform Ontarians of exactly where their hydro payments are going.

For further information, please contact Ryan Mallough at [email protected], or 416-222- 8022.

CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members, including 42,000 in Ontario, representing about 500,000 employees.