Ontario Tories try to cut through “green” fog

TORONTO, ONTARIO - "Who's right?" Opposition Leader Bob Runciman asked with a shrug and rhetorical flourish.

Well, that – when it comes to arguments over the costs and employment potential of the Ontario government's proposed Green Energy Act – is the multi-billion-dollar question.

But say this for Runciman and his Progressive Conservative opposition: They've done a public service by commissioning a report that sought to add some rigorous analysis to a debate the government apparently prefers be conducted in a dizzying rush and a giddy fog of feel-good green rhetoric.

Energy Minister George Smitherman says his legislation, already through second reading and public hearings and certain to be passed into law this spring, will result in energy cost increases of only 1 per cent annually for most households, while creating 50,000 new jobs over the next three years.

Having little success determining how those estimates were arrived at, the PC opposition paid $20,000 for a report by London Economics International LLC on the potential cost of the legislation.

Runciman said no political direction was given to the firm.

He was frank enough with reporters yesterday to admit that, had it produced only glowing endorsement for the initiative, "we may not have released it."

Instead, however, the analysis suggested that under the new legislation the rise in energy costs will be more significant than advertised and that the job creation figures appear based more on high hopes than hard data.

"Little analysis is publicly available regarding (the legislation's) costs," said economist Neil Bush, who produced the report.

"We didn't find any analysis – or very little analysis – of current costing of the Green Energy Act, despite the fact that this piece of legislation is going to significantly change the way in which the province procures and uses electricity."

His study was based on information from verifiable third-party sources, Ontario Power Authority data, and what was called "reasonable" estimates of potential take-up of the new regime.

It analyzed five key elements: generation costs, interconnection costs, implementation of a so-called smart grid, conservation and demand-management initiatives, and establishment of a Renewable Energy Facilitation Office.

The aggregate costs will be between $18 billion and $46 billion, Bush concluded, rising annually from 2010 through 2025.

The average annual increase per household will range from $247 to $631, and under high-end scenarios could near $1,200 a year. (That doesn't include the proposed 8 per cent increase through a planned harmonization of provincial and federal sales tax next year.)

Bush said his study took the goal of environmental protection as a given and looked only at the costs of the Ontario legislation.

"We believe that lower-cost options to achieve a similar level of emission reductions can exist," he said. As to the forecast creation of 50,000 jobs, Bush said "we find that to be unsubstantiated."

The government has generated such enthusiasm for the legislation – a recent poll suggested it is supported by 87 per cent of respondents – that it's difficult to seek scrutiny of its cost implications without being portrayed as an antediluvian coal-burner and recycling refusenik.

Nevertheless, Runciman said the opposition has a duty to hold the government to account, even if vastly overmatched by its "large army of bureaucrats with access to tax dollars."

"I'm proud that we've done this," he said. "This is not just a couple of politicians knocking heads in the Legislature, (yelling) "I'm right! You're wrong! We've actually gone to the experts (and) hopefully are helping the people of Ontario with respect to the real implications of this legislation."

The question of who's right still stands, he said.

"We'll let you be the judges."