• Stephen Lecce, MPP

Ontario Building A Stronger Northern Industrial Sector

SAULT STE. MARIE – The Ontario government is strengthening Northern Ontario’s industrial sector by reducing electricity costs through the new Northern Energy Advantage Program (NEAP) so businesses can invest more money in hiring and training workers, and making transformational changes to their operations.


“Under previous governments, energy costs chased good jobs and investment out of Northern Ontario” said Premier Doug Ford. “We are fixing their mistakes and providing companies with the predictable energy costs they need to bring back the jobs and opportunities that the people of Northern Ontario deserve. With these economic conditions in place, Ontario will be unstoppable.’

Large industrial operations in the mining, forestry, and manufacturing sectors in Northern Ontario are energy-intensive, with electricity costs representing a significant proportion of overall costs. The expanded NEAP program will help eligible companies in these sectors better manage electricity costs and create and sustain good jobs in Northern Ontario to maintain global competitiveness. By lowering energy rates for industrial customers in the North – the Ontario government is creating a stronger business climate to attract investment from global markets. This initiative builds on Ontario’s new strategic priorities that have unlocked endless opportunities for international businesses, including critical minerals development, battery assembly and electric vehicle manufacturing.

The government is increasing its investment from $120 million per year to over $176 million by 2025-26. The new program, formerly the Northern Industrial Electricity Rate program, is expanded to allow more businesses to qualify for funding and the $20 million cap for current participants is removed. To encourage businesses to make transformative investments to their operations, such as transitioning to clean technologies, the government has also introduced a new investor class stream that will provide time-limited enhanced energy cost benefits to participants.

“Our government is building an integrated supply chain from exploration to electric vehicles – connecting the Northern and southern Ontario economies for the first time,” said Greg Rickford, Minister of Northern Development, Mines, Natural Resources and Forestry. “We have expanded NEAP eligibility so critical minerals and battery materials projects can benefit from the program. With the release of our government’s Critical Minerals Strategy, the new and improved NEAP program could not have come at a better time.”

Algoma Steel is the first company to benefit from the new investor class stream and was provided the energy cost certainty necessary to confidently plan to build an electric arc furnace in Sault Ste Marie – positioning Algoma as a world leader in the production of green, low-emission steel. Enhanced NEAP funding will also allow for the participation of more northern operations coming into production in the future. The new NEAP program will ensure that the government is prepared to support new critical minerals projects and processing capabilities by providing predictable, low energy costs.

“For several generations, our city has relied on Algoma Steel. As our largest employer, Algoma’s success is directly tied to the success of Sault Ste. Marie. Similarly, hard times at Algoma result in hard times for our city, and we have seen our fair share of hard times over the last several decades,” said Ross Romano, MPP for Sault Ste. Marie. “Today’s announcement is about the future of Algoma Steel and the future of our community. It ensures that Algoma Steel will never again suffer the instability of the past. Today’s announcement is about protecting Sault Ste. Marie and our future generation of children, workers and families so that they can build a brighter life for themselves and keep them ‘Home to Stay’.”

“Our government is supporting Northern Ontario’s industrial sectors by reducing energy costs, providing the stability businesses need to support good-paying jobs” said Todd Smith, Minister of Energy. “Today’s announcement reflects our commitment to help key economic sectors like forestry, mining and manufacturing maintain competitiveness and support new investments in the North.”


Quick Facts

  • Ontario is increasing its investment from the current $120 million per year to over $176 million by 2025-26, through the NEAP program, to assist Northern Ontario’s largest industrial electricity users reduce their energy costs.

  • NEAP rebates will now be based on the three-year average eligible electricity consumption between 2017-2020, rather than 2013-2016 consumption levels to better reflect current consumption patterns.

  • Currently, there are 21 Northern Ontario industrial companies representing 28 facilities participating in the program.

  • Under the updated program, participating companies will receive rebates of $20 per megawatt-hour, with individual rebates capped at 2017-2020 average annual electricity consumption levels.

  • Existing participants in good standing will be extended for a five-year term to March 31, 2027, ensuring facilities can continue to count on program benefits.


Quotes

"The expansion and enhancements made to the Northern Energy Advantage Program provide Algoma Steel, and other companies, the clarity and certainty needed to undertake transformative change. The program will enable long-term business investments that support the transition toward net-zero and will benefit businesses across Northern Ontario, Ontario and Canada, for years to come."

- Michael McQuade President and Chief Executive Officer, Algoma Steel Inc

"Not only does the NEAP (formerly NIER) program provide a significant reduction in our operating costs, contributing to extended operational life, it provides awareness and supports improvements for energy reduction initiatives. Many projects would not have been executed at this operation if it were not for NEAP."

- Evolution Mining "Impala Canada applauds the Ministry of Northern Development, Mines, Natural Resources and Forestry for its development of the Northern Energy Advantage Program. This initiative, a continuation and enhancement of the Northern Industrial Electricity Rate program, will help Northern Ontario businesses transition to clean energy and technologies, and improve our collective competitiveness in a global landscape."

- Impala Canada "We are part of a global company, but we are steadfast in our commitment to Northern Ontario – maintaining jobs, investing as required in our operations and continuing to seek out efficiencies in our operations that sustainably drive down costs. However, the price of power is a key contributor to our success in this regard. The enhancements made to the “new” Northern Energy Advantage Program (NEAP) demonstrate the Ontario government’s understanding of the importance of reliable, sustainable and cost-competitive energy to our success and its commitment to working together to transform the future."

- Vale Canada "GreenFirst Forest Products is pleased to participate in the Northern Energy Advantage Program (NEAP). This program will continue to assist facilities like our GreenFirst Forest Products Paper Mill in Kapuskasing to sustain jobs and maintain global competitiveness. Under the requirements set out in the program, GreenFirst Forest Products has developed an energy management plan to further reduce energy usage."

- GreenFirst Forest Products "Ontario’s electricity system is complex, and its volatility hinders investment. Lake Shore Gold, a subsidiary of Pan American Silver (LSG), pursued admittance into the Northern Energy Advantage Program (NEAP). LSG realized the need to develop a sound energy management program in order to comply with the regulations and guidelines of NEAP. This required the team to develop a holistic and sustainable energy management system from its infancy. LSG established objectives and targets through an Energy and Greenhouse Gas Management Plan for reducing energy costs and environmental impacts throughout the operations. NEAP funding, in conjunction with the implementation of the Mining Association of Canada’s Towards Sustainable Mining protocols, has assisted in facilitating energy conservation initiatives, develop awareness programs and devise strategies to meet and at times exceed energy legislation and emissions regulations. Finally, NEAP provided much needed financial relief from rising electricity costs, which allows our resources to maintain competitiveness with neighboring jurisdictions."

- Pan American Silver (Lake Shore Gold) "The NEAP (formerly NIER) program has supported the Macassa mine complex by providing funding which has supported various energy improvement and efficiency programs, such as new lighting, increased efficient dewatering systems and underground mobile battery powered equipment. The overall impact of these programs has assisted the site in reducing our energy intensity and reducing our greenhouse gas emissions. This program has contributed to Macassa’s ongoing improvements and at this point, Macassa is one of the least carbon intensive operations in the world."

- Agnico Eagle Mines Limited (Kirkland Lake Gold) "The Northern Energy Advantage Program will continue to assist Glencore in recognizing our efforts to manage electricity consumption and improve energy efficiency at our Sudbury Integrated Nickel Operations. The enhancements made to the program will help to further offset the capital investment required for conservation initiatives and will help to lower our operating costs."

- Glencore "We welcome and appreciate this announcement as the NEAP (formerly NIER) is an effective tool that supports our ongoing efforts to ensure our operations in Ontario remain competitive."

- Domtar Inc. "Resolute’s pulp and paper operations in Northwestern Ontario have participated in the NEAP (formerly NIER) program since its inception. This initiative recognizes our efforts and those of other industrial consumers to improve energy efficiency and conservation, while contributing to the economic prosperity of the region. As a company committed to sustainable growth, the new NEAP program will support ongoing efforts to reduce our GHG emissions and improve our overall economic and environmental footprint."

- Resolute Forest Products "We are pleased to see the renewal of the NEAP (formerly NIER) program. The program is valuable for large industrial electricity users in the north, like Tenaris, to address global competitiveness imbalances in electricity prices that result from our northern location and aligns well with our focus on continuously improving our energy efficiency. Tenaris commends the continuation of this program."

- Tenaris Algoma Tubes Inc.

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