Ontario, dear Ontario, where are we heading? (Part 3)

Perhaps we should look to the past to give us some direction for the future. How was it that Ontario became the engine of the country until the current derailment? Since the end of the 2nd World War there was one major driver of job creation in this Province and that was ample and affordable electricity.Ontario’s economy started a major boom cycle with the availability of an affordable and stable supply of electricity. Drawn to this resource came businesses that needed this power to manufacture their goods. With the expansion of manufacturing came jobs, not just directly in the manufacturing sector but also in the spin-off support and service sectors. So historically it was manufacturing that resulted in the expansion of Ontario’s service sector: banking, legal, accounting, investments, entertainment, restaurants, etc.

Unfortunately the current Liberal government felt that manufacturing was no longer required and should be replaced by growth of the service sector. To some degree this was the right thing to do because, mainly due to globalization, we the consumers had access to cheaper products from other parts of the world. We then chose to support that supply chain as opposed to paying more for locally produced goods.

Where the current government failed in this regard is that it lumped all manufacturing together and failed to recognize that there were opportunities for many “old” manufacturers to re-invent themselves so that they could compete in the “new” supply chain. The opportunities existed for those manufacturers who could adjust to be able to supply products or services to the new emerging  customer base. Unfortunately the current government chose to put pressure on all manufacturing by penalizing them with high costs associated with Hydro, WSIB, EHT, and operating costs in general.

Is it too late to turn this trend around? Perhaps not but the one critical missing piece of the road to renewed prosperity is inexpensive and stable supply of electricity, just like how we got going in the first place. The big users of electricity are leaving or simply closing down so there is ample supply of power at this time, but the cost of this power is rapidly rising. Current and projected rising electricity costs will cause more of the larger users to pull up stakes, further punishing those businesses that remain by forcing them to make up for the lost revenue. And it won’t be just the remaining manufacturers that will be dumped on, higher costs will be passed on to consumers and the same service sector that the Liberals are trying to support.

The Liberal plan to create jobs will not work unless power rates are controlled and affordable.