John Ivison reports on a recent photo op by Premier Dalton McGuinty:
The solar energy company touted this week by Ontario Premier Dalton McGuinty as a flagship of the province’s clean energy economy has halted production because of slow demand.
Mr. McGuinty was flanked by Eclipsall Energy Corp.’s workforce when he visited its Scarborough solar panel plant Tuesday, but there was no mention that the production line is temporarily shut down. When my colleague Tamsin McMahon visited the plant she found the reception desk was empty, the cafeteria was closed and only a handful of employees milling around inside the sparsely furnished building.
Leo Mednik, Eclipsall’s chief financial officer, said the production line halt is because the company has already completed its current order book. “It’s no secret that the market is slow and there have been delays. That’s part of it — part of it is logistics. Our production team went through our purchased inventory a lot quicker than expected,” he said.
Not only is the plant not working to capacity: it’s only working at all because of government subsidies:
The Liberal government’s efforts have created jobs — though the 20,000 number touted by Mr. McGuinty seems highly questionable, far less the 50,000 he says will be created by the end of next year. In addition, they are hardly high wage, high skilled jobs the Premier claims (Eclipsall pays 20% over minimum wage to its workers, who assemble glass and solar cells imported from Asia, thereby qualifying for the Liberal Green Energy Act’s 60% domestic content rule).
The question is: how sustainable are these jobs? Mr. Mednik admitted that if the domestic content rule was removed, Eclipsall and other Ontario manufacturers would not be able to survive. “Frankly, it would be very difficult for any start-up to compete” against cheaper Chinese producers, he said.
He said it is a question of when, rather than if, the 60% threshold is removed. Both the European Union and Japan have taken the FIT program to the World Trade Organization and want the local content requirements removed. They claim this Buy Ontario provision is a prohibited subsidy. The FIT program might also soon become subject to a NAFTA dispute case, after American renewable company Mesa Power Group said it would file a complaint.
