Editorial Sales tax on power is a no-no

As though an electrical power rate increase announced late last year of about 5.2 per cent to direct power users weren’t enough, it is now being proposed that a sales tax be added to the cost of power supplied by Ontario Hydro.

Both, of course, would add a very considerable burden to the province’s mining industry, which is already one of the biggest of Ontario’s hydro power users, having spent more than $200 million for that energy in 1985, the last year for which such figures are available. In fact the two biggest single direct hydro customers in Ontario, Inco and Falconbridge at Sudbury, were alone expected last year to have had a total power bill of around $110 million.

The idea of a sales tax being imposed on top of a rate increase which is itself ahead of the general inflation rate is, of course, a definitely unacceptable one to the industry, and the Ontario Mining Association plans to make that clear in a letter soon to be dispatched to the Ontario Energy Board.

Down the road, indeed, there is the threat of still another energy cost burden hitting the mining industry in Ontario. It would be as a result of Hydro’s latest announcement that it may have to spend up to $5.5 billion on emission control equipment at coal-fired generating plants in the province. It must do that, Hydro says, to meet provincial guidelines on cutting of acid rain emissions by half by 1994. Spending on that scale means Hydro could add another three to four per cent to the power bill of industrial users.

Meantime the two big miners at Sudbury, Inco and Falconbridge, are themselves having to spend millions to meet emission standards by that same year, again under government fiat. A few percentage points increase in power rates can mean literally millions more in cost to these two companies alone. The cost arising from environmental control may have to be and is being borne, but such cost-heavy items as a sales tax on power shouldn’t come anywhere near the statute books.