Friday, 4 November 2011

Did Hudak's green energy policy cost him the Ontario election?

Clearsky Advisors
October 12, 2011

The purpose of this article is not to pass judgment on the election outcome, but to contribute to a discussion about the role green energy policy played in the outcome of the Ontario election. Were their respective positions on green energy either positive or negative for the election results of the two main parties in Ontario, the governing Liberals and the opposing Progressive Conservative party (PC)?
Let’s consider McGuinty first – the man behind the Green Energy Act:
Recent reporting suggests that Carol Mitchell and possibly John Wilkinson – both ministers in McGuinty’s previous cabinet – lost their seats because of the Liberal party’s policy on renewable energy. An article in the Globe and Mail also mentions Leona Dombrowski as suffering the same fate in addition to the two aforementioned candidates. The same article goes on to say that because of those three losses, McGuinty lost his majority, which, given that he is now only one seat short of majority, is an accurate statement. But, does that also mean that we can attribute McGuinty’s loss of majority to the Liberal’s green energy policy?
Let’s consider the following facts:
  • The Liberals lost 19 seats in this election
  • Three of the losses have been attributed to the green energy policy
  • That leaves 16 other lost seats, each of which could have given McGuinty a majority, if only one of those Liberal candidates had won their riding
In other words, there are many reasons why McGuinty lost his majority, and green energy policy may be one of them – but in a year with strong conservative winds blowing across Ontario, it surely is not the only and perhaps not the most important reason. Conversely, there is evidence that McGuinty’s green energy policies may have helped him greatly in some parts of the province even if it didn’t in others.  Moreover, evidence also suggests that Hudak’s aggressive stance against green energy policies may have hurt, more than it aided his cause.
It is worth noting that in none of the three ridings mentioned by the Globe and Mail as costing McGuinty his majority can the voting be characterized as landslide victories for the PC party and their particular stance on renewable energy:
  • In Perth-Wellington, the PCs made a gain of 1,981 votes, just slightly more than the “green friendly” NDP’s gain of 1,674 votes. Given that John Wilkinson lost his seat by only 630 votes, one might just as well attribute his loss to the “orange wave” as to the Conservative’s opposition to the current green energy policy. With both the Liberals and NDP supporting a progressive green energy policy, the popular vote in Perth-Wellington was clearly in favour of a green energy policy.
  • In Huron-Bruce, the shift from Liberal to the PC party was more pronounced as the PCs gained 5,560 votes compared to the 2007 election and beat the incumbent Liberal candidate by 4,463 votes. However, the majority of the popular vote still favoured parties with a progressive green energy policy.
  • In Prince Edward – Hastings the PC party gained 3,909 votes versus the Liberals’ loss of 5,294 votes. Even so, if this election was indeed a vote on a progressive green energy policy, it is still the case that a clear majority of the votes in the riding went to parties with progressive green energy policies on their programs.
Looking at the examples above, it is clear that it wasn’t green energy policy that contributed to McGuinty’s loss of a majority; a more likely reason is a continuation of the voting trends seen in the federal election both towards NDP and towards the conservative party in rural Ontario; another is the general wear and tear of having been in power for two terms. However, as long as the popular majority in all of these ridings is clearly in favour of progressive green energy policies it is hard to pin McGuinty’s loss of majority to the introduction of the Green Energy Act.
But what about Hudak: Did he lose this election because of his negative stance towards green energy?
We can’t know for certain, but two pieces of evidence suggests that the PC party would benefit from a more pragmatic approach to green energy in the future:
  1. The PC party did not gain a single seat in 11 ridings with significant new green energy manufacturing facilities, suggesting that green energy policy might actually have saved McGuinty from an overall loss. PC did win Haldimand-Norfolk, the location for one of the much-publicized Samsung facilities in Tillsonburg, but that was a strong PC riding in 2007 as well. The table below lists the ridings with the associated manufacturing facilities and election outcomes referred to here.
  2. Tim Hudak announced on May 10th that he would end the “expensive and unsustainable Feed-in Tariff (FIT) program and [McGuinty’s] sweetheart Samsung deal”. Prior to that, polls had pegged the PC support at around 40-41%, whereas the Liberals were at 34%. For Hudak, that was the high point in terms of support – his announcement to end current green energy policies did not appear to attract any new voters to PC. Instead, his support started withering away and on election day the PCs ended up with 35.4%  of the popular vote (a loss of 5% since May) and the Liberals with 37.6% (a gain of 3.6%) for a swing of 8.6% since the May announcement. As a result, Hudak failed to make any inroads where he needed it the most – suburban ridings in the GTA.
While the PCs’ loss of support can’t be solely attributed to Hudak’s aggressive stance on green energy policy, it is clear that he made no gains by taking such a negative position.
Green Manufacturing Ridings and Election Results
RidingManufacturer2011 Winner (2007)
Sault St MarieHelieneLiberal (Lib)
PeterboroughSunRiseLiberal (Lib)
Scarborough-AgincourtSamcoLiberal (Lib)
Markham-UnionvilleEclipsallLiberal (Lib)
Don Valley WestCelesticaLiberal (Lib)
VaughanSunEdison (Flextronics)Liberal (Lib)
OakvilleSilfabLiberal (Lib)
GuelphCanadian SolarLiberal (Lib)
WellandOntario Solar ManufacturerNDP (NDP)
Windsor – TecumsehSiliken, Unconquered SunLiberal (Lib)
Windsor – WestOya Solar, GreenSun RisingLiberal (Lib)
(it should be noted that in addition to the above list of companies there are many more manufacturing facilities benefiting from domestic demand for solar and wind equipment; such as existing machine and tooling shops, suppliers of electrical components etc., but we have left those out because those companies existed before the Green Energy Act was introduced which makes it harder to attribute any effects to it’s introduction than is the case for the listed companies )
In brief, these are our main conclusions on the Ontario provincial election:
  • There are many reasons why McGuinty lost a majority. While green energy policy might have contributed, the reality is likely more complex.
  • It is probable that the Liberal’s green energy policy actually prevented an outright loss for McGuinty by shoring up support in most ridings benefitting from green energy manufacturing facilities and in suburban ridings.
  • It is impossible to conclude that Hudak lost the election because of his negative stance on the current green energy policy, but he certainly made insufficient gains because of that position.
  • Given that the majority of the electorate supports a party with a progressive green energy policy, any party that is looking to win in Ontario in the future would be wise to enter an election with a positive program for green energy expansion in order to attract voters.
  • As Ontario’s renewable energy industry is breathing a collective sigh of relief, they should not feel beholden to McGuinty’s government: Without the private investment and efforts of the solar and wind entrepreneurs to create businesses and jobs in Ontario, McGuinty may not have returned to Queen’s Park. Furthermore, the industry should be aware that any political party that is looking to get elected in Ontario in the future must incorporate a progressive green energy policy in their program.

For a link to the Clearsky article, click here.

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