The report highlights the need to mitigate against forecasted rate increases that are more than double the current rates, the CFIB said.
“While there has been no shortage of public attention given to the Muskrat Falls project, often lost in the discussion is the effect projected rate increases will have on (small-and medium-sized enterprises,” Vaughn Hammond, director of provincial affairs for Newfoundland and Labrador, said in a news release.
“The government has stated it intends to mitigate against these rate increases, which will clearly be needed to avoid harm to the provincial economy.”
The CFIB says the Muskrat Falls project should not be exempt from oversight by the Board of Commissioners of Public Utilities (PUB), noting the public calls for an audit of Nalcor and a public inquiry, despite existing oversight such as the government oversight committee. According to the CFIB, the PUB is the best way to ensure transparency and accountability, as it has the power to audit public utilities in the province and can compel evidence at a hearing or inquiry.
“The PUB is an independent, apolitical forum where Newfoundlanders and Labradorians, as a public, can have their say on electricity rates in the province,” Hammond said. “It is time for the government to allow the PUB to meet its mandate and provide the necessary oversight for the Muskrat Falls project.”
To reach its conclusions, the CFIB surveyed its members and got copies of power bills from more than 100 of its members for 2016.
All approved rates for 2017 were applied to consumption and demand at 2016 levels. Estimates were then analyzed using data on the total number of small and medium-size businesses. It was assumed all applicable electricity rates in 2017 were doubled, as is the scenario for the Muskrat Falls project by 2020.
Some 85 per cent of businesses surveyed said they cannot reduce their consumption rate easily.
The CFIB is also calling on government to eliminate the Harmonized Sales Tax applied to electricity for residents.