Ottawa businesses pay just slightly less than the Canadian average for power, says a recent report by the Fraser Institute.
By Jacob Serebrin
But the Vancouver-based think tank says that overall, Canadian businesses are being held back because they pay higher rates than their U.S. counterparts.
“These higher electricity rates put Canadian businesses at a competitive disadvantage and deter future economic development,” Kenneth Green, who co-authored the study and is the Fraser Institute’s senior director of energy and natural resources, said in a news release.
On average, commercial electricity customers in Canada pay 19 per cent more than those in the U.S., excluding Hawaii, while small industrial customers pay 30 per cent more, the study says.
Here in Ottawa, commercial businesses that consume 10,000 kilowatt hours of electricity per month pay 12.26 cents per kWh, slightly below the average of 12.27 cents per kWh in major Canadian cities but higher than the average of 11.55 cents per kWh among 119 North American cities.
According to the study, 76 cities in North America have cheaper commercial electricity rates than Ottawa, including four in Canada – Winnipeg, Montreal, Vancouver and Regina.
Small industrial customers in Ottawa – those who use an average of 400,000 kWh – are paying 10.59 cents per kWh, below the Canadian average of 10.97 cents per kWh.
That places Ottawa 95th among North American cities and sixth in Canada. For the 119 cities in the U.S. and Canada surveyed, the average cost of electricity for small industry was 8.92 cents per kWh.
“The shift away from inexpensive coal-fired generation capacity in Ontario, and the failure of resource-rich provinces Alberta and Saskatchewan and gas-poor provinces such as Ontario to fully embrace natural gas-fired capacity, is penalizing commercial and industrial electricity consumers,” Mr. Green said. “This is particularly troubling for a province such as Ontario, which has a significant manufacturing sector, and Alberta, which relies on resource extraction.”
Tulsa, Ariz., had the lowest electricity costs for business customers at 6.23 cents per kWh for commercial clients and 4.01 cents per kWh for small industrial customers.
In Canada, Winnipeg had the lowest rates at 7.48 cents per kWh for commercial and 5.76 cents per kWh for small industrial customers.