Ontario’s Liberal government may be promising that the removal of its eight-per-cent slice of the harmonized sales tax on hydro bills will bring relief to businesses, but one manufacturer says the move won’t help and that high electricity costs are driving businesses away from the province.
Jonathon Azzopardi, president of Maidstone, Ont.-based tool and mold maker Laval International, told BNN in an interview that the HST reduction announced in Monday’s throne speech is nothing but “smoke and mirrors.”
“We claim that tax back anyway,” Azzopardi said. “We're not paying that tax, so them removing that from our bill actually doesn't help us in any way.”
“I hate to call it, but it's a bit of 'smoke and mirrors' there because it really doesn't help us … [it] just saves us a step which really wasn't a big deal to begin with anyway."
Azzopardi said current electricity costs amount to about five per cent of their cost of goods sold and that it’s weighing heavily on his business. He warns the high energy costs could be causing larger manufacturers to carry out expansion plans.
“Energy has replaced labour as one of their No. 1 concerns for where they're going to locate or expand business, so it's pretty serious,” Azzopardi said.
As for whether he’s moving out of the province, he said Laval will be “looking for options.”
“I've spoken to companies like Magna and, per penny, the fluctuation in electricity costs is $6 million to their bottom line and that’s one of our main customers,” he said. “So it’s not that we’re moving out, it’s that our potential clients of the future, our clients today are moving out and it's going to be a hard effect. It's going to trickle down to us. “