Nuclear Refurbishment a Smart Investment for Ontario’s EconomyJanuary 11, 2016
The following is an opinion-editorial from Allan O’Dette, President & CEO of the Ontario Chamber of Commerce.
Ontario’s economy is turning the corner. Many experts project that Ontario will lead Canada in economic growth in 2016. Yet challenges remain. Our businesses face increasingly fierce global competition for investment, markets, and talent.
To continue on the path of economic growth, Ontario will need to capitalize on each and every major opportunity, while exploring new ways of differentiating ourselves from competitor jurisdictions. The planned nuclear plant refurbishments at Darlington and Kincardine present such an opportunity.
Nuclear refurbishments in Ontario are already having a sizeable impact. Bruce Power will invest $13 billion to refurbish its station on Lake Huron. An economic impact analysis conducted by a coalition of organizations including the Canadian Manufacturers & Exporters found that the investment and operation program at Bruce Power will provide Ontario with an annual contribution of 18,000 jobs and $4 billion in economic benefit through direct and indirect spending on engineering, specialized equipment, materials, and labour income.
Meanwhile, according to a report by the Conference Board of Canada, the $12.8 billion refurbishment of the Ontario Power Generation Darlington site is set to boost household income by a total of $8.5 billion, create an additional 8,800 refurbishment-related jobs annually, and boost Ontario’s GDP by a total of $14.9 billion during the project’s lifespan.
Of particular interest to the Ontario Chamber of Commerce are the supply chain jobs generated across the province as a result of nuclear investment. For example, while Cambridge is more than 150 kilometres from Darlington, three businesses in the Cambridge area will be playing a vital role in the project. Aecon Group Inc., ATS Automation Tooling Systems Inc., and BWXT Canada Ltd. will provide support and expertise in engineering, project manufacturing, design, and component manufacturing for the refurbishment.
Cambridge is not dissimilar from dozens of communities across Ontario whose small businesses play an important role in the nuclear supply chain. Meanwhile, large firms like SNC-Lavalin and Aecon Group Inc. generate economic activity in multiple areas of the province through the supply chain.
Not only are the benefits of nuclear refurbishment spread across Ontario, they are also largely captured within the province. In fact, 96 percent of the Darlington project’s direct expenditures will take place in Ontario. Capturing this spending within the province ensures that the associated multiplier effect benefits Ontario communities, through increased consumer spending and activity in sectors like real estate and retail, and related industries.
Further, as Ontario continues to build its nuclear capacity, so too does it enhance the ability our businesses to export nuclear technology and expertise around the world.
Beyond economic development, continued investment in nuclear generation assets are critical for the province’s energy system. Earlier this year, the Ontario Chamber of Commerce released the report, Empowering Ontario: Constraining the Costs and Staying Competitive in the Electricity Market, which uncovered the driving factors behind electricity costs in Ontario.
The report finds that Ontario’s relatively high price of electricity is undermining its businesses’ ability to grow and hire new workers. We conclude that investing in nuclear generation as baseload power for the province is the best way to ensure stable and affordable energy over the long-term.
As taxpayers and businesspeople, there exists a temptation to balk at the seemingly high price tag for nuclear refurbishments. But Ontario’s business community sees the value of such investments- not only in supporting direct and indirect job creation, but also in building a reliable energy system. Evidence suggests that nuclear is the least expensive form of electricity generation next to hydroelectricity.
For its part, and from the perspective of taxpayer accountability, the Government of Ontario still has an important role to play. As such, we are encouraged that the provincial government has committed to working with nuclear operators to ensure that refurbishments stay on schedule.
Finally, many jurisdictions including Ontario are now recognizing the important role that nuclear power plays in meeting their climate change commitments. Unlike fossil fuels, nuclear energy production generates zero greenhouse gas emissions and plays a key role in making Ontario one of the lowest GHG emitting electricity jurisdiction in the world.
Investing in nuclear refurbishment projects to support affordable and reliable baseload energy will provide a welcome boost to Ontario’s economy and increase the reliability of our energy system.