Increase in electricity prices |  Companies in shock

Increase in electricity prices | Companies in shock

While they expected the rate increase to be capped at 3% for all Hydro-Québec customers as promised by the government, businesses, SMEs and large corporations must take advantage of a record rise in the cost of electricity, the highest in at least 15 years. . And they are in shock.


Of 1Ahem By April 2023, businesses and small businesses will see their electricity bill increase by 6.4%, while the preferential rate that applies to large companies (Tarifa L) will increase by 4.2%, according to figures provided by the Ministry. of Economy. The increase in the residential rate will only be limited to 3%.

“A 6.4% increase, added to all other cost increases, will make life very difficult for small businesses,” laments François Vincent, vice president for Quebec for the Canadian Federation of Independent Business.


PHOTO MARCO CAMPANOZZI, PRESS ARCHIVE

François Vincent, Vice President for Quebec of the Canadian Federation of Independent Business

The CFIB estimates that the bill for SMEs will rise by 250 million, twice as much as if the increase had been limited to 3%. It will particularly harm retailers and restaurants, and all the SMEs that have been most affected by the pandemic, specifies François Vincent.

The big companies, for their part, are getting a terrible scare, says their spokeswoman Jocelyn Allard, president of the Association of Industrial Electricity Consumers.

For many of these companies, electricity represents 50% or more of their production costs. They had included in their budget planning a price increase of less than 3%, not 4.2%.

When your electricity bill is 50 million a year, a difference of 2% is not small.

Jocelyn Allard, President of the Association of Industrial Electric Consumers

The government’s decision to limit Hydro-Quebec’s rate increase to 3% for residential customers only isn’t even good news for consumers, Option consumers believe.

“Companies will include the increase in the cost of electricity in the price of their products, explains Sylvie de Bellefeuille, legal and budget adviser for the organization. Inevitably, people will pay more. »

According to her, the government’s decision is “nonsense” because it will not protect consumers against rising prices, on the contrary, it will contribute to inflation.

“We don’t understand”, adds François Vincent, from the CFIB. “The government announces an anti-inflation shield for the population, but not for companies. It is sure to have an impact on prices,” he says.

Almost three quarters of the Quebec companies in the CFIB indicated in a survey that they would transfer the increase in their costs to the price of their products and services, recalls François Vincent. “For others, I am thinking, for example, of small bookstores, it will be even more difficult. »

The predictability?

In a bill that died on the agenda before the National Assembly suspended before the elections, the outgoing government announced that all categories of electricity rates would be limited to a 3% increase.

The bill that has just been reintroduced when parliamentary work resumes now only affects residential rates, hence the nasty surprise for businesses.

The responsibility for setting electricity rates was removed from the Régie de l’énergie in 2019, as Bill 34, passed under the government’s gag order, decreed that rates would henceforth increase at the rate of inflation of Quebec, which is currently 6.4%.

This new method of setting electricity rates, unanimously criticized by companies, consumers and energy specialists, had the advantage, according to the government, of offering more “predictability” in the cost of electricity, especially for companies that need to plan their decisions. for the long term.

The least we can say is that “predictability has taken over”, laments the spokesperson for industrial consumers, for whom the increase scheduled for 1Ahem next April is double what they expected.

The increase in commercial rates also has nothing to do with the needs of Hydro-Québec, on which the Régie de l’énergie’s rate decision was based prior to Bill 34. “Given the financial situation of “Hydro -Quebec, which is making record profits this year, rates capped at 3%, is still too much, in our opinion”, observes the spokesperson for Option consommateurs.

By betting that the inflation rate is immutable, the government “lacked vision, according to Sylvie De Bellefeuille. Unfortunately, all we can say today is: we told you so.”

More information

  • 5.3%
    The last significant rise in electricity prices, dating from 2006

    Hydro-Quebec


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