Thunder Bay·Up North

Ontario gives northern industry permanent relief from energy costs

A program that reduces energy costs for northern industries — like mining and forestry — will carry on indefinitely, the Ontario government says.

The Northern Industrial Electricity Rate Program will carry on indefinitely, province says

The energy-guzzling Paper Machine Five, or PM5, at Resolute Forest Products' Thunder Bay pulp mill. The province has made permanent a program to provide northern industries with relief from their energy costs. (Heather Kitching/CBC)
A program that reduces energy costs for northern industries — like mining and forestry — will carry on indefinitely, the Ontario government says.
Ontario minister of northern development and mines Michael Gravelle announced Tuesday that the Province would make permanent its funding of the Northern Ontario Electricity Rate Program. (Heather Kitching/CBC)
Speaking at a news conference at Resolute Forest Products' Thunder Bay pulp mill on Tuesday, Northern Development and Mines Minister Michael Gravelle told reporters that Ontario would commit up to $120 million a year permanently to the Northern Industrial Electricity Rate Program, which was to expire in March of 2016.

First introduced in 2010, the program is a benefit to companies such as Resolute, Goldcorp, AV Terrace Bay, and North American Palladium, Gravelle said.

"It positions them to certainly be able to maintain operations but also potentially expand and create more jobs," he added.

The program can help cut up to 25 per cent from energy costs incurred by qualifying businesses.

Significantly reduces costs

"It reduces our costs significantly on our site," said Goldcorp's Musselwhite mine general manager Bill Gascon. 

"Our second highest cost on our site in production is energy — behind labour — so it's huge for us. We're a very energy intensive industry."

Resolute Forest Products president and CEO Richard Garneau said the province's permanent support for the Northern Industrial Electricity Rate Program means more business and more jobs for northwestern Ontario. (Heather Kitching/CBC)
Without the program, Resolute's business in northwestern Ontario would not be competitive, and that would cost the region jobs, said the company's president and CEO Richard Garneau. He noted that power accounts for more than a third of Resolute's total manufacturing costs.

"The program puts Ontario on a footing where we can compete with other jurisdictions, not only in Canada, but in the U.S. and also elsewhere in the world, where we market our newsprint," Garneau told CBC. 

"It means jobs. It means business. It means better planning. It means that they're going to be able to finance school and university and college."

The guaranteed funding, he said, also means the company is in a better position to plan for the future.

"When you don't know how long it's going to last," he added, "you're just cautious."

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