There’s a real problem, a real issue, with hydro rates in Ontario

Mr. Howard Hampton: Recently, Cliffs Natural Resources, the mining company interested in developing the chromite deposits in the Ring of Fire region 500 kilometres north of Thunder Bay, released their study dealing with some of the mining issues, the transportation issues and the smelter refinery issues. What got people’s attention was Cliffs’s opinion that a smelter refinery located in Ontario would be unlikely because Ontario’s hydro electricity rates are too high. Since then, the McGuinty Liberals have issued press release after press release in an attempt to discredit Cliffs Natural Resources’ comments.

Here is the history: Last year, Xstrata closed their copper refinery in Timmins. They’re going to continue to take the ore out of the ground in Timmins, but now they’re going to ship it to Quebec to have it smelted there, and about 2,000 good jobs are going to follow. Why did they do that? Because they’re paying $70 million a year for electricity in Ontario and they can pay only $35 million in Quebec.

Four and a half years ago, what was then Inco closed their copper refinery in Sudbury. Today, they still take the ore out of the ground in Sudbury, but they ship it to Quebec to smelt it there at half the cost. That’s exactly what is happening with Cliffs Natural Resources. If they move to Manitoba or Quebec, they’ll pay half the cost of refining the metal.

There’s a real problem, a real issue, with hydro rates in Ontario.

-Hansard Transcript, February 23rd, 2011 

Additional quotes from a story at netnewsledger.com;

“According to the Manitoba Hydro website a company like Cliffs Resources would pay a monthly hydro bill of about $5.3Million (or $63M/year) if they located their smelter-refinery in Ontario. The same refinery located in Manitoba would pay a hydro bill of $ $2.1M/month (or $26M/year) if they located their smelter in Manitoba. The Quebec figures are $2.8Million/month ($33.5M/year).

“The real travesty in all of this is the fact that in Northern Ontario we generate some of the cleanest and greenest electricity (mostly from falling water) at some of the lowest costs on the planet, yet we are not allowed to use that electricity at an affordable price to create jobs in Northern Ontario because of the McGuinty Liberals ‘made in Toronto for Toronto’ electricity policy,” Hampton concluded.