Ontario's governing Liberals are ratcheting up their campaign for the fall election, making the creation of jobs in the green energy sector the cornerstone of their bid for a third consecutive term.
A multibillion-dollar deal with South Korean industrial giant Samsung Group is at the centre of the Liberals' ambitious goal to transform the province into a green energy powerhouse. But the same deal the Liberals are presenting to voters as evidence of their ability to create jobs is being attacked by their opponents for secrecy and "sweetheart" terms. The Progressive Conservatives have vowed to kill it if elected.
On Wednesday, after spending the past 1.5 years refusing to divulge details about the deal, the McGuinty government released the Samsung contract, as well as revisions that include financial concessions and a commitment to create new jobs sooner than planned.
The government's effort to salvage the troubled deal is the clearest signal yet that its ability to fashion itself as a champion of green energy will become a divisive debating point during the campaign for the Oct. 6 election.
Premier Dalton McGuinty will tour a plant on Thursday in Toronto, where he will tout the green energy jobs he says his government is creating. It will be the first of many such stops as he highlights stark choices facing voters over the province's economic future.
"There's no question the stakes for Ontario families are very high," Energy Minister Brad Duguid said in an interview. "[Progressive Conservative Leader Tim]Hudak's placing at risk thousands of clean energy jobs and billions of dollars of investment in our economy."
The $7-billion agreement with Samsung, initially signed in January, 2010, and revised last Friday, is a key plank in the government's push to create North America's first green-energy manufacturing sector.
The government is hoping to generate 50,000 new jobs by luring investors with the promise of generous long-term contracts that include a guaranteed revenue stream. The Samsung deal alone is supposed to produce 16,000 direct and indirect jobs. But Mr. McGuinty has come under fire for luring the company to the province with incentive payments over and above the revenue his government pays green-energy companies.
Under the revised deal, Samsung's incentive payments will be slashed to $110-million from $437-million in return for an extra year to get its renewable energy projects up and running. The company is also promising to have the three plants it is building come on stream by the end of this year. The new, lower incentive will add 36 cents a year to consumers' electricity bills over the 25-year life of the contract.
The changes did nothing to blunt criticism from opposition members, who complained that Samsung is getting preferential access to the province's transmission grid.
"It's still a sweetheart deal," Tory MPP Jim Wilson said. "Today doesn't change the fact that they've given a foreign company exclusive access to a great big part of the publicly funded grid, which is the real gold mine here."
Ontario's renewable energy industry is still in its infancy. The government has said $20-billion worth of investment commitments have been attracted to the province as a result of its green energy policies, but a lot of political uncertainty remains ahead of the provincial election. The nascent industry is feeling the repercussions. Some players are hesitant to make further investments before the vote.
"The political uncertainty has absolutely frozen a portion of the market," said Paolo Maccario, chief operating officer of Silfab Ontario, an Italy-based company that opened a solar-panel factory in Mississauga in April.
Despite some "blows and bruises," Mr. Maccario believes Ontario remains an attractive and credible destination for investment in renewable energy.
Marin Katusa, chief energy investment strategist at Casey Research, an investor research service, noted that producing wind and solar energy would not be economical without government subsidies, especially when compared with the cost of developing coal or natural gas.