Did you know that people in New York City are paying less for electricity than people in Ontario? Maybe you did smarty-pants. But did you know that some of that electricity that gets supplied to New York City is made in Ontario? Even if you knew this too, the real question is – does that make any sense?
Many manufacturers are attempting lean manufacturing in order to keep input costs down to be more competitive, especially after the disastrous economic decline a few years ago. But when the cost of electricity is out of control, and manufacturers are paying thousands more than they did even last year, keeping costs low is a next to impossible feat.
The most major contributor to the soaring electricity prices is the fall of American energy costs. With low cost options such as natural gas, American energy competition keeps jumping forward as we’ve remained stagnant.
Gary Goodyear, the federal Minister of State for Federal Development Ontario, addressed the 47th Annual International Academy for Production Engineering conference on Manufacturing Systems held at the University of Windsor. Here he discussed that older types of manufacturing are being out-competed by countries that have low labour costs. When our input costs, electricity being a huge factor, are too high, efforts trying to compete in the sector are faced with enormous hurdles. This is why he believes that Canadian manufacturing will be – and needs to –move in a new direction, “We see the future in additive manufacturing, higher quality and higher knowledge-based companies.”
Goodyear added that the auto industry is an example of the type of manufacturing that the federal government is ready to target their investments, especially if co-operation between the different levels of government and the private sector continue to run smoothly.