Thursday, May 15, 2014

Hudak falsehood: 300,000 jobs killed by rising hydro rates

Tim Hudak’s “Million Jobs” revolution is founded on a lot of flaky ideology and misinformation.

Part is his claim that rising electricity rates in Ontario killed 300,000 manufacturing jobs.

He put out a chart that attempts to forge the correlation:

What economists say

But according to economists, it was actually the soaring loonie that caused the loss of the 300,000 jobs.

According to neo-con economist Stephen Gordon — who says the ‘Dutch Disease’ is not so bad because lost jobs were replaced in other sectors of the economy — the rising dollar killed the jobs:

The Canadian dollar depreciated by 20 per cent in 1993-2000, and it appreciated by 60 per cent during 2002-2008. The effect on manufacturing employment was consistent with what you would expect: an increase of about 300,000 jobs during the 1990s, and a decrease of a roughly similar amount in the 2000’s.

Here’s the chart with Gordon’s information:

Phony job creation

Hudak says Ontario has the highest electricity rate for industry in North America. Which isn’t actually true.

His plan is to create 40,000 jobs by lowing electricity rates for industry. Obviously this won’t work considering the overvalued dollar is what actually killed the jobs.

Privatization scheme

Hudak plans on selling off Hydro One and Ontario Power Generation. Like the 407 fiasco, Ontarians will likely end up getting gouged. Privatizing monopolies never ends well for consumers.

California is one example of an electricity privatization nightmare. There home users pay 23¢ kWhr (compared to our 12¢) while corporations are subsidized paying 9¢ (compared to our 10¢.)


If elected, Hudak will immediately hike residential rates 10% by cancelling the Ontario Clean Energy Benefit.

His plan to privatize Hydro One and Ontario Power Generation could send rates soaring. It’s highly unlikely average Ontarians will see their rates go down.

If Hudak subsidizes industry rates on the backs of residential users, this will cause personal rates to soar. But it certainly won’t create 40,000 jobs.

1 comment:

  1. For exports the cost of electricity effects a small percentage of the cost, but the dollar effects almost 100% of the cost.

    If 10% of the cost of a manufacture comes from hydro a 20% increase in hydro means he would have to increase his price by 2% to make up for it.

    If the dollar goes up by 20%, he would have to increase his price by 20% to make up for it.


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