The Importance of Manitoba Hydro in the Manitoba Economy

 by Errol Black

In recent weeks, questions have been raised about Manitoba Hydro’s role in the Manitoba economy. 

The Chambers of Commerce, for example, have proposed that Manitoba exploit the potential of Manitoba Hydro to become a “world-leader in the clean energy sector [based] on the development of wind, solar, geo-thermal, hydro…and other clean energy opportunities.” 

In fact, the evidence indicates that Manitoba Hydro is already a leader in the clean energy sector. According to the most recent published data (Wikipedia, “Electricity sector in Canada,” August 25, 2011), 98 per cent of the energy produced by Hydro came from clean energy sources, namely, water, 97.7 per cent and wind, 0.9 per cent. In relation to the rest of Canada, Manitoba produced 6.0 per cent of the total energy, 10.0 per cent of the total energy from water, and 11.0 per cent of the energy from wind and tides.

At the same time, Manitoba Hydro has a long-term plan to increase clean energy production while at the same time supporting conservation measures – through its Power Smart program — that promote efficient use of energy in the province.

Questions have also been raised about the use of the surpluses generated by Hydro. Currently, the benefits of surpluses accrue to rate payers in the form of the comparatively low rates on their hydro bills. For example, for residential users of 2,000 kWh per month the bill in Winnipeg is $139.25, the lowest among surveyed cities. In comparison, the monthly rates in Regina and Saskatoon are $231.46, in Calgary, $191.76, and in Edmonton, $188.86.

It has been suggested that we should raise rates so that a dividend could be paid directly to the Manitoba government. The curious thing about these proposals is that they come from the very same people who argue that taxes are too high in Manitoba relative to other provinces. Moreover, the people who propose these ideas never discuss the distributional impact of raising Hydro rates.

Manitoba governments (of every description) have used comparisons of taxes and personal costs (which includes hydro costs) to show that Manitoba citizens in most income groups are better off than their counterparts in most other provinces.

This short blog presents only a few of the benefits Manitoba Hydro, as a Crown Corporation, provides all Manitobans. This sort of evidence-based discussion enables us to rationally consider Hydro’s role in our future.

Errol Black is the chair of CCPA Manitoba