Ontario's Green Energy Act - 6 years later

Six years after Ontario's groundbreaking Green Energy Act (GEA) was introduced in 2009, it remains one of the most contentious and polarizing pieces of legislation ever brought in by the current Liberal administration. But a cool, objective analysis reveals that it was a bold and insightful law, forward-thinking and essential for the province's situation at the time (and even today).
The GEA was designed to smooth Ontario's transition from traditional manufacturing (mainly in the automotive industry), which had been largely decimated by the early 21st Century, to the future of manufacturing, the green energy industry. It did this by subsidizing wind, solar and other clean technologies, and by forcing the industry to use a significant element of local components and services.
Much has happened in the intervening years, and green energy and clean tech in general has established itself as a major and growing force in the world economy. The GEA rules requiring green energy developers to buy local no longer apply, after complaints from Japan and the European Union led to a World Trade Organization ruling in 2012 that the rules were against international trade law.
But the Act did indeed kick-start a local clean manufacturing sector, as several of the companies profiled in a recent Globe and Mail article attest, and the buy-local aspect (even if short-lived) was key to that. Even if many of the companies are actually foreign-owned, they are at least employing local labour and building local expertise. In the process, Ontario has positioned itself reasonably well within the new paradigm, again largely thanks to the provisions of the GEA, and is now exporting significant quantities to the United States, which (unlike Canada) is actively encouraging renewable energy.
But the Act also has its share of detractors and critics, and its effects have not been wholly beneficial (very little legislation can boast that). The main criticism levelled at the GEA is that it has single-handedly caused a large increase in electricity prices in the province, to the extent that the policy has actually driven manufacturing out of the province. A little perspective and objectivity is needed here. Electricity prices have indeed increased significantly in recent years, but in actual fact very little of this is directly attributable to the GEA. A much greater impact on electricity prices has arisen from the independent decision to close down Ontario's coal-fired power stations (surely a good decision in itself), continued reinvestment in expensive nuclear and gas plants (not such an unalloyed good), and necessary investments in the reliability, upgrading and transmission of electricity production.
Only time will tell if the green industry the GEA has encouraged in Ontario will survive in an increasingly competitive global economy. But, even without the local content rules, many companies are still flourishing, largely feeding off the huge demand from south of the border. However, Canada's market share of the world's clean tech market amounts to only about $12 billion out of an estimated $1 trillion worldwide, and it is gradually losing even that market share as countries such as the USA, China and Europe ramp up their production capabilities.
It would be a real shame if Ontario and Canada fritter away what advantages they have in the field based on the statistical cherry-picking of a few partisan economists (the right-wing think-tank The Fraser Institute and the provincial Progressive Conservatives being among the most strident, along with the University of Guelph academic Ross McKitrick, who also just happens to be a member of The Fraser Institute). The Ontario Conservatives have even vowed to repeal the Act if they ever achieve power, although thankfully the chances of that remain slim.
Even if the cost of clean electricity is higher than that of dirty electricity, it is still the right path to follow (although, in the absence of artificial subsidies for fossil fuels and nuclear power, and with continued investment and economies of scale in clean tech, that is not necessarily the case anyway). What is important is the "real" or "full" cost of the power we consume, complete with environmental externalities and taking into account all future liabilities involved. And, if we don't like the cost of something, then common sense dictates that we should use less of it.