Ontario greenhouses contribute over $2 billion to the provincial economy, but rising costs due to cap and trade, and rising electricity prices are forcing some out of the business

Ontario greenhouses contribute over $2 billion to the provincial economy, but rising costs due to cap and trade, and rising electricity prices are forcing some out of the business
Photo Credit: Jonathan Pinto/CBC

Ontario cap and trade,energy costs : slow death of an industry

The concept was heralded with much fanfare. Ontario would join Quebec and California in an emmissions cap and trade programme.

The idea is to reduce greenhouse gases by penalizing those polluting industries and benefit those which reduce their emmissions.

Caught in the middle are Ontario’s greenhouse producers, those who heat with natural gas.

But recent increases in electricity charges (Hydro) in the province are also hitting other growers as well.

According to the Agricultural Adaptation Council, there are about 3,200 acres of food crops and flowers under production in Ontario, employing about 20,000 workers, and contributes some $2.3 billion to the provincial economy.

That may change, and not for the better.

A group of family-owned greenhouse operators gathered in Leamington Ontario to discuss their situation related to new *cap and trade* policies. They say it has doubled their heating bills which could force many out of the business.
A group of family-owned greenhouse operators gathered in Leamington Ontario to discuss their situation related to new *cap and trade* policies. They say it has doubled their natural gas heating bills which could force many out of the business. © Meg Roberts/CBC)

On January 1st, the provinces new cap and trade policy came into effect and greenhouse operators took an immediate hit.

One producer of cucumbers says his December bill was about $19,000, but the January bill was well over $41,000.

Jamie Diniro owns a cucumber greenhouse and says his bill has more than doubled since January. he also says the new bills are unclear as to what they’re paying for.
Jamie Diniro owns a cucumber greenhouse and says his bill has more than doubled since January. He also says the new bills are unclear as to what they’re paying for. © Meg Roberts -CBC

Gerry Mastronardi grows tomatoes in a 16 acre operation in south-western Ontario says most of the small operations in the area are family owned and have been handed down from generation to generation.

He says the new tax is killing their business, adding that he recently told his son to start looking at other careers as there was no future, in the business which he says might not survive.

He estimates his annual bill of around $120,000 for natural gas heating will double to $240,000.

Several greenhouse operations can’t apply for the cap and trade programme because they are either too small, or too energy efficient, and so get nailed with huge bills.

There are over 13,000 acres of greenhouse production, but some operators are considering moving out, possibly to the US because of Ontario’s energy costs.
There are over 13,000 acres of greenhouse production, but some operators are considering moving out, possibly to the US because of Ontario’s energy costs. © Migrant Dreams Film

Quoted in the Windsor Star, he says,”“The only way I can get in (the program) is if I open up my steam valves and shoot everything off into the atmosphere and burn the fuel up but come on, that’s ridiculous”.

He adds, “It doesn’t make any sense. That’s why we’re up in arms here.”

Mucci Farms in Kingsville has been operating for 45 years in Ontario, but is now expanding into Ohio, USA. Where electricy rates are now a third of those in Ontario.
It’s not just cap and trade on natural gas that’s hurting growers. Mucci Farms in Kingsville has been operating for 45 years in Ontario, but is now expanding into Ohio, USA.,where electricity rates are now a third of those in Ontario. © Mucci Farms.

“We have significant concerns about availability and cost of food”

Justine Taylor of the Ontario  Greenhouse Vegetable Growers says that their members are reporting a doubling of bills.  She says the average OGVG member operates 14 acres of greenhouses and estimates costs would be an additional $86,000 annually.

She adds however that when the federal carbon pricing programme comes into effect in 2022, costs will have risen to $240,000.

Quoted in the Chatham Daily News, she say, “We have significant concerns about how this is going to impact the availability and the cost of local food”.

Rapid increases in Hydro electricity rates in the province are also being blamed on businesses thinking of a move from the province, possibly to nearby US states.
Rapid increases in Hydro electricity rates in the province are also being blamed on a variety of businesses thinking of a move from the province, possibly to nearby US states. © Chris Seto, CBC

She agrees with concerns expressed by some growers that operations may close in Ontario, while others might move to other jurisdictions without the cap and trade, possibly even to Michigan

Mastronardi and several othe greenhouse operators are asking to meet with Ontario Premier Kathleen Wynne to discuss the issue which they say is killing the business.  “That is the bottom line, we just cannot justify this, we cannot afford this”, he says.

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