McGuinty says $7B Samsung deal to make Ontario leader in green technology

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TORONTO - A $7-billion investment in Ontario by Samsung and state-owned Korean Power Electric Corp. will help the province become a leader in manufacturing green energy technologies that it can export to the United States and elsewhere, Premier Dalton McGuinty said Thursday.
"It's important to understand that building the green economy, green energy jobs and putting in place the Green Energy Act is not for the faint of heart," said McGuinty. "It's going to take bold steps."
Samsung will build wind and solar farms across Ontario that will generate 2,500 megawatts of power, and will also build four plants to manufacture components for green energy projects, creating about 16,000 jobs in the process. Most of those will be temporary, but 1,440 permanent manufacturing and related jobs will be created.
"We're trying to lay the foundation here for new economic growth in Ontario ... to build the capacity here to deliver renewable technology to the U.S. market," McGuinty told reporters after signing the deal, which he described as the largest of its kind in the world.
Critics said Ontario was giving Samsung big advantages over Canadian-based wind and solar producers, including special access to crowded transmission lines and incentives that they said amount to a huge taxpayer subsidy of a foreign multinational.
"This sweetheart deal is a bad deal for Ontario families," said Progressive Conservative Leader Tim Hudak.
"For every job that Dalton McGuinty claims will be created at a Samsung site, the taxpayer is on the hook for $303,000."
The New Democrats wondered why Ontario felt it needed to partner with a state-owned energy company from Korea when government-owned Ontario Power Generation is capable of taking on similar, large-scale projects.
"This government has put its faith in a publicly owned Korean electrical utility when in fact it could have done that with a publicly owned Ontario facility, OPG," said NDP energy critic Peter Tabuns.
The Association of Power Producers of Ontario said its members feel like they were "thrown under a bus" by the Liberal government in favour of the South Korean consortium led by Samsung and were "appalled" at the lack of an open and transparent process.
Samsung will be paid "slightly more" than the 13.5 cents per kilowatt hour feed-in-tariff rate given to other wind power producers, which critics warn will add even more to rising electricity bills.
Direct Energy, which sells electricity to homeowners and small businesses who don't buy power from their local utility, said the Samsung deal will send everyone's bills skyrocketing because of the so-called 'global adjustment' the province uses for pricing.
"Our customers see it as a separate line on their bill, with a year over year increase that's over 300 per cent for some businesses," said Direct Energy vice-president Hillary Marshall.
"Ontarians are going to get a shock over the coming months and years as they see their monthly electricity bills rise due to the government's global adjustment mechanism that pays the tab for deals like this one."
Samsung was allowed to jump the queue ahead of everyone else with just a promise to build manufacturing plants in the future, said Tabuns.
"If they don't deliver on the promise, they still will have jumped the queue," he said. "I think that's a big problem for those who are interested in investing in Ontario."
The Green Party of Ontario said provincial businesses were losing out because of the transmission capacity being set aside for Samsung, "allowing a single company to jump the line and undermine community power initiatives."
McGuinty insisted there were no players in Ontario, Canada or the world who could bring as much to the table as Samsung, and said the smaller green energy producers would be able to build on, and take advantage of, the work Samsung does in the province.
"If there are other companies out there who have in mind to put in place this kind of manufacturing infrastructure that enables us to go beyond meeting our own demand, our own needs in Ontario, to reach into the American market, we're all ears," he said.
Just as Ontario's economy once relied heavily on exporting cars south of the border, the Liberal government wants to do the same with green energy technology, said McGuinty.
"What we want to do is take the green energy economy in Ontario to a higher level," he said. "It can't just be about Ontario; it's got to be about making technology for the U.S."
Hudak called the Samsung agreement the "mother of all untendered contracts," which McGuinty said was "nonsensical," noting that when Toyota wanted to build a new plant in Ontario, the government didn't insist that it bring Ford and General Motors into the deal as well.

Organizations: Samsung, Korean Power Electric, Green Energy Ontario Power Generation Direct Energy Association of Power Producers of Ontario Toyota Ford General Motors

Geographic location: Ontario, United States, TORONTO Korea Canada

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