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Ontario Energy Minister Brad Duguid holds a news conference at Durham College in Whitby on April 8, 2010. (Fred Lum/Fred Lum/The Globe and Mail)
Ontario Energy Minister Brad Duguid holds a news conference at Durham College in Whitby on April 8, 2010. (Fred Lum/Fred Lum/The Globe and Mail)

As oil prices soar, Ontario responds with $3-billion green plan Add to ...

The McGuinty government's latest renewable-energy announcement is about much more than awarding $3-billion worth of contracts to a couple of dozen wind and solar companies.

It signals that Canada's onetime economic engine is hitching its fortunes to becoming a global, clean-energy powerhouse and comes in the wake of mounting questions about the government's commitment to renewable power and whether it will turn into a job-creation machine.

In contrast to resource-rich Alberta, which is counting on riding higher commodity prices back to prosperity, Ontario is pinning its hopes on the renewable-energy sector to create 50,000 new jobs. The policy, initially unveiled in 2009 as the Green Energy Act but now rebranded as Clean Energy, follows huge job losses in the province's manufacturing heartland.

The McGuinty government is turning to renewable energy to help reverse those job losses and to wean the province off fossil fuels. But there is plenty of skepticism among opposition members that the government can live up to its job-creation promises.

Soaring oil prices, caused by unrest in the Middle East, are creating new urgency for Canada's most populous province to reinvent itself. Ontario is already facing a record deficit for this fiscal year, pegged at $18.7-billion. But it is now bracing for a further decline in revenues. As prices at the pump go up, said Finance Minister Dwight Duncan, consumers fill up the gas tank less often. "This is a grave threat to the economy," he said.

Energy Minister Brad Duguid reinforced that the government is moving full speed ahead on renewable energy by unveiling enough wind and solar projects to light up more than 200,000 homes in the province.

"We're creating thousands of jobs," Mr. Duguid said on Thursday. "We're attracting billions of dollars of investment and we're building a cleaner, brighter future for our kids."

It is a message aimed at putting to rest any doubts about the government's ambition to put Ontario at the forefront of the global clean-energy economy. The government is luring clean-energy investors with the promise of generous long-term contracts that include a guaranteed revenue stream. But the jury is still out on whether renewable-energy jobs can offset the massive losses in manufacturing during the global economic recession.

The government has faced criticism from opposition members as well as industry players about recent policy reversals. It halted the development of offshore wind turbines this month for further study after being caught off guard by the vehemence of opposition in lakeside communities. In the hopes of making the issue go away during an election year, the government ruled out offshore entirely.

As well, companies seeking contracts for small solar projects recently were stalled because there is not enough capacity for them to connect to the electricity grid. Roughly 20,000 farmers were awarded contracts to place solar panels on their property. But the government informed about 1,000 of them this month the province currently lacks the transmission capacity to proceed with their projects.

On Thursday, Progressive Conservative Leader Tim Hudak called for a moratorium on all industrial wind farm projects to allow communities to have their say. He also questioned the government's assertion that the contracts awarded Thursday would create 7,000 direct and indirect jobs.

"We've heard these claims before," Mr. Hudak told reporters. "I think these jobs are fantasy. We saw a spectacular backtrack by Premier [Dalton]McGuinty on a similar bunch of solar and wind projects."

As to why the government changed the name of the policy to clean energy from green energy, Mr. Duguid said that's what everyone else around the world calls it.

"I think we need to be hip with the lingo worldwide," he said.

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