By Mary Moszynski
Business leaders were swift to react with anger to NB Power’s application to increase rates by almost 10 per cent, warning such a large hike could cripple businesses and lead to job losses.
David Plante of the Canadian Manufacturers and Exporters said he was shocked following the utility’s announcement of its long-awaited rate hike request.
“An increase of this order of magnitude is going to have a devastating impact on the competitiveness of the New Brunswick manufacturers and it’s going to threaten the viability of a number of operations,” he said.
“A number of these operations, particularly in the forestry sector, are already in crisis-mode.”
NB Power is seeking a 9.6 per cent rate increase for this year.
The increase, if approved by the Energy and Utilities Board, would give NB Power an additional $112 million this year.
Businesses are already facing pressures such as higher taxes, a strong dollar and increased costs, said Plante.
Plante criticized the provincial government for not taking steps to prevent rate shock and phase-in rate increases.
“We would have thought that a more responsible approach would have been to phase-in any justified rate increases over a longer period of time,” he said.
“Make no mistake, this is going to have a devastating impact on manufacturers. We’ve already seen closures of some sawmills throughout the province.”
Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, said the rate increase application couldn’t have come at a worse time for New Brunswickers.
The Liberal government introduced across-the-board tax increases in its first budget earlier this year.
Meanwhile NB Liquor recently raised prices while homeowners have been grappling with increased property taxes.
The utility cited higher fuel costs and the former Tory government’s decision to cap last year’s rate increase as the two major reasons for the requested rate hike.
However Cirtwill said the province is sending a negative message to potential investors.
“We made mistakes in the past and you’re going to continue to pay for them in the future,” Cirtwill said of the utility’s outlook.
Mark Arsenault, president of the New Brunswick Forest Products Association, said it’s difficult to quantify how many jobs will be affected.
However he said the forest industry is already facing some hardships.
“Companies have to absorb that and you’ve got companies right now that are on the line, that have been doing some real serious soul-searching as to how they’re going to survive and how they’re going to stay alive.”
Similarly, Andreea Bourgeois, director of provincial affairs for the Canadian Federation of Independent Business, said small business owners are being asked to dig even deeper into their pockets.
“For everyone except a mathematician this is a double-digit rate increase.”
Many businesses, especially those in the tourism industry, have already printed their brochures and materials and will be unable to pass any rate increase along to their customers, she sad.
“We have the government in one of the back pockets asking for more tax increases, then the municipalities asking for property taxes,” she said.
“NB Liquor is in one of the front pockets looking for all other kinds of issues and then you have NB Power in all of the other pockets that are left. How deep do they think small business pockets are?”