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Tuesday, May 17, 2011

McKitrick: Ontario's Green Energy Act a failure

via the Financial Post:

The pledge by Ontario PC leader Tim Hudak to roll back key provisions of the Ontario Green Energy Act is a courageous move and deserves to be applauded. It will likely spark intense debates as we head into the upcoming election. It is hard to say whether public opinion will be on his side, but the facts certainly are.

The Green Energy Act (GEA) was proposed as both an environmental policy and a job-creation policy. It is misguided on both scores.

With regards to job creation, there is nothing special about subsidizing electricity generation. It’s just as harmful as subsidizing anything else. We have long and lamentable experience in Canada with failed job creation schemes based on subsidies to money-losing industries. From Sprung cucumbers to Bricklin sports cars, governments have regularly learned and relearned, at taxpayer expense, the immutable rule that if a business plan depends on subsidies, the jobs it creates are not sustainable, and if the business is profitable on its own, it doesn’t need subsidies.

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