Published On: Thu, Sep 22nd, 2016

Ontario Businesses Look for Solutions to Rising Energy Prices

Following months of media reports outlining the increasing number of Ontarians who were unable to pay their growing energy bills, the Wynne government has announced a solution, sort of.

Facing a surging backlash from homeowners and business owners across the province, the provincial liberals announced as part of their mid-September throne speech the introduction of an energy rebate. The rebate, which will reduce bills by 8 percent, essentially eradicates the 8 percent HST charge.  

For Ontarians living in rural areas and the remote northern part of the province where energy prices have increased by as much as 60 percent over the last 18 months, the energy crisis has become a hot button issue.

photo via wikimedia

photo via wikimedia

It’s reported that in Bruce County alone more than 200 residents have had to apply for emergency energy aid programs just this year in order to keep their lights on. For these residents, the government has promised to take an additional 20 percent off their bills.  

The rebate programs, which are expected to be in place by January 2017, immediately garnered a negative response from critics who called it too little, too late. Another group was quick to point out that while the rebates sound great on paper, they will do little to reduce the cost of bills now and will have no impact in the New Year when a new fixed rate energy policy rolls out.

As of January, the Ontario Energy Board is moving from a variable distribution rate to a fixed rate and is also phasing out a usage rate. Critics believe the new policy will further drive those in rural and remote Ontario into debt because the new policy depends on how much energy residents use and where they live.

“There’s a major equity and policy implication that we think needs a political response as well as a regulatory response,” said Theresa McClenaghan of the Low-Income Energy Network. “We have to pay attention when we have inequitable impacts of policy decisions happening.”

The new fixed rate policy also does not factor in any electricity rate increases, which are usually announced in November and May of each year. According to The Ontario Energy, as much as 60 percent of customers will not see a significant change as a result of the move to fixed rates.

The energy issue in Ontario has become so dire, it is estimated that 1 out of every 20 businesses in the province may be forced to shut their doors over the next 5 years.  

“Businesses can’t grow, make improvements or investments or even hire new workers because of the increasing rates, which are among the highest in the country and expected to continue to rise over the next 20 years,” notes a 2015 report released by the Ontario Chamber of Commerce.

If Ontario lost one out of every 20 businesses in such a short period of time, it would drastically affect the already delicate provincial economy.

On a brighter note, over the past decade, energy management companies have formed to provide services that allow businesses to better manage energy costs.  Companies like Ontario’s Active Business Services provide energy assessments that pinpoint where a business’ energy costs can be cut and better managed. In addition, companies like Active Business Services provide knowledge resources, giving business owners a better grasp on how to navigate increasingly fluctuating energy costs.

In the years to come, energy management companies will become more popular as Ontarians get creative in combatting continually rising energy costs.

Author: Jane Crafton

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